How much does a pipe renovation lower an apartment's price?
A pipe renovation (linjasaneeraus) is the largest single factor in the value of a Finnish housing company apartment. What it costs the shareholder per square metre, why "pipe renovation done" is not enough information, and which entries in a listing do not mean a renovation at all.
What a pipe renovation costs the shareholder
A pipe renovation (linjasaneeraus, colloquially putkiremontti) is the largest single factor in the value of a housing company apartment. When the housing company renews the water pipes, drains and the waterproofing of wet rooms, the bill goes to the shareholders as a charge or a company loan. The bill is so large that it shows in the apartment's sale price, whether the renovation has been done or is still ahead.
In AsuntoAnalyysi's model an upcoming pipe renovation is €1,000/m² of floor area. The figure is the shareholder's typical portion of the whole contract, not the housing company's total cost:
| Apartment size | Ahead | Just done |
|---|---|---|
| 40 m² | €40,000 | €14,000 |
| 60 m² | €60,000 | €21,000 |
| 80 m² | €80,000 | €28,000 |
| 100 m² | €100,000 | €35,000 |
The effect is asymmetric: a renovation that has just been done does not raise the price as much as an upcoming one lowers it. This is not an error; it is how the market behaves. Part of a completed renovation is paid back, but the buyer does not reimburse the whole contract. In return they get a home where living is not interrupted for months.
The figures in the table are contract prices, and they are also the maximum effect of the renovation on the estimate. The reference point is the area's average price, which already includes the area's typical backlog of repairs, so in cheap areas deducting the full contract price would count the same thing twice. The estimate scales the effect to the local level: €3,000/m² is the level at which the full contract price is the right market discount, and below it the effect is about 33% of the apartment's value. So the same 60 m² apartment gets €60,000 deducted for an upcoming pipe renovation in an expensive area, but €30,000 in an area where the level is €1,500/m². The renovation itself costs the same in both, and that cost appears in full in the table above and in the monthly cost of the analysis.
The range of contract prices, the cost of each part in euros and the bill as a monthly payment are in a separate article: Pipe renovation cost per square metre (in Finnish). This article answers a different question: what the renovation does to the value of the apartment.
Three different renovations under one name
"Pipe renovation done" is misleading in a listing, because it can mean three different things. The water pipes can be renewed without touching the drains, and a drain repaired by sleeving or coating does not renew the waterproofing of the bathrooms. The parts have different prices and different service lives:
| Part | Share | Cost | Service life |
|---|---|---|---|
| Water pipes | 22% | €220/m² | 50 yrs |
| Drains | 60% | €600/m² | 50 yrs sleeving 35 yrs coating 25 yrs |
| Bathroom waterproofing | 18% | €180/m² | 30 yrs |
Renewing the drain lines by opening up the structures is by far the most expensive part. Waterproofing, on the other hand, is a fairly fixed sum per bathroom, so its real price per m² is higher than the table in a small apartment and lower in a large one.
A completed pipe renovation does not last forever
The most common mistake when comparing apartments is to treat a completed renovation as binary: either it has been done or it has not. In practice, part of the 45-year service life is used up every year, and the value falls with it: a pipe renovation done 45 years ago no longer adds any value, and after that it turns negative, because the next round is ahead. This is how the value develops in a 60 m² apartment:
| Renovation done | Effect €/m² | In a 60 m² apartment |
|---|---|---|
| Just completed | +€350/m² | +€21,000 |
| 15 years ago | +€233/m² | +€14,000 |
| 30 years ago | +€117/m² | +€7,000 |
| 45 years ago (end of service life) | +€0/m² | +€0 |
| 55 years ago | −€667/m² | −€40,000 |
When you can get a good deal
The chart has two curves. Rational is the straight line described above: the value falls steadily over the service life. Market is what buyers actually do. Little extra is paid for a fresh renovation, and the price only drops sharply once the renovation is about 15 years away.
The gap between these two curves is, in practice, where bargains are found. On the left is a building whose pipe renovation was finished recently, and there the market pays less than the renovation is really worth. On the right, just before it falls due, the opposite is true: the price does not yet reflect a renovation that is coming within a few years.
In brief
- An upcoming pipe renovation is typically €1,000/m², or €60,000 in a 60 m² apartment.
- "Done" is not enough information: ask which part was done and in which year.
- A 45-year-old pipe renovation is already the start of the next one, not a selling point.
You can check the effect on your own property by pasting an Oikotie or Etuovi link into the search box on the front page: the analysis breaks the pipe renovation into its parts, estimates when each is next due and tells you what that means in euros. All the figures in this article come from the same model, and the reasoning behind them is on the method page (in Finnish).