How is the property’s square meter value determined?

The price of a square meter of real estate varies from 400 euros to three and more thousand euros. How does such a price difference occur? Does it just depend on where the property is located? Experts agree that the prestige of a place matters, but a certain place can have extra expenses for a variety of reasons. When starting the construction of a house, the builder must initially define who will be its potential buyer and what his purchasing power is. It will depend on the construction site, project and choice of materials, technical and finishing solutions and other nuances that make up the material value of real estate. We understand that each group of buyers has its own preferences and financial capabilities. For example, real estate on Alberta Street is chosen by wealthy people with special requirements, so the apartments there are larger and the finishing materials are more expensive. On the other hand, in residential areas, the buyers are mostly young families who, when they start living together, need economical housing. Here is an example – in Purvciem, Ieriķu street 18, we are planning to build a new house, where the price of the apartment will be around 2000 euros per m2. But in the project in Jūrmala, Rīgas street 51, it will cost 2,800 euros per m2. Both houses will be of high quality, with all the necessary certificates, but the construction costs in both projects are completely different. Everything depends on the intended goal. The house can be built more expensively or cheaper, and in both cases it is possible to do it qualitatively. In one project, panoramic and triple-glazed double-glazed windows are installed, and in the other – standard ones, because there the heat loss is significantly lower and double-glazed double-glazed windows are sufficient. In Jūrmala, we install a separate gas heating boiler, but in Purvciem, we connect the house to city communications. In construction, as in other fields, there are both economical and expensive solutions. A glazed facade is more expensive than a plastered one. The glass facade of the “Sunstone” project is significantly more expensive than the facade with stone wool and plaster. A ventilated facade costs 2.5 times more compared to a plastered one, but it provides a special quality of the environment indoors, and its maintenance is cheaper in the long term. It is easier to wash a ventilated facade, but the plaster needs to be renewed after several cleanings. The price of real estate is significantly influenced by geology – it is important where the building is built, what is the composition of the soil and the level of underground water. When building a 24-story house in the swamp or a five-story house in the sand, completely different construction technologies for the building frame must be used. 30-35% of the total expenses for the construction of the house should be provided for the frame. If the building is built in the city center, construction immediately becomes more complicated and expensive. “There is a perimeter building in the center of Riga. Building a house there is much more expensive than building in an open area,” says the specialist. In the center, construction is taking place alongside other buildings. In order not to harm them, the foundations must be strengthened. The frame of the building to be built must also be securely fixed, because the neighboring houses also affect the new construction. If the building frame needs to be strengthened more than usual, the cost of materials increases. In addition, disputes with neighbors may also arise. A simple example – if cracks are discovered in the adjacent building during construction, then the work is stopped for an expert examination.

The expertise on Stabu Street lasted for 3 months, and another month was needed for the resumption and completion of the work. “Although we found out in the expert examination that the cracks in the house next to it are already 50 years old and the foundations of the house were damaged during the Soviet era, the inspection itself, of course, “hit our pocket”, and the cosmetic repair in the neighbor’s house also cost us this much.” In addition, it is difficult to bring concrete, building materials, fittings, bring in and take out equipment from the yard of the house, which cannot be bypassed due to the perimeter construction. And if complicated, then also more expensive. Sidewalks and parking lots that are temporarily closed during construction work should also be taken into account. On Tallinn street 86, the fee for parking on the sidewalk was 700 euros, and on Stabu street – 100. We also closed several parking spaces, from which the city usually earns income, and these losses must also be covered by the builder. When planning construction works, such expenses are not foreseen, and then unexpectedly, questions related to the city’s underground communications arise – how far will the sewage, water pipe, heating, electricity have to be laid? Every extra meter costs money. See the full version of the article here