New-Build or Renovate

I recently reported on the extreme new-build premiums currently being asked across Spain, with some of the highest in the prime Mediterranean regions where 75% of overseas buyers head for.  If you are planning to buy property in 2026, and new-build is something you are considering you’ll find the facts and figures and the reasons behind the current trends here. When you’re comparing a new-build property with a resale that needs work, you’re not just comparing homes — you’re making a strategic financial decision. And in today’s Spanish property market, that decision increasingly point in one direction.

Justifying the Premium

When you are making a comparison between a new-build and a resale that needs a little or a lot of work to make it right for you, the first step is to compare the price per square metre of both. In the current market the most likely result is new-build will be significantly higher. My recent research found premiums between 30% and 80%, depending on locations and type. Once you have the relevant per square metre prices ask the following questions:

• is the premium justified in this location?
• is the premium justified at this time?
• is the premium justified for this product?

If the answers are anything other than a clear and unequivocal “yes”, the premium is not justified. Then there are two options; concentrate your search on already renovated properties or get the builders in. The fact is, that in many prime areas, the gap between new-build prices and those for resales is no longer marginal, it is decisive. We need to look back several decades to understand why the current property market shows these huge discrepancies. There are clear reasons to question how sustainable this is in the longer term.

Looking at recent history, the 1995 - 2008 period brought a sustained construction boom across Spain which means stock built during this period is now between twenty and thirty years old. While is true that when the bubble burst, Spain was left with 1.5m unsold, often poor quality and poorly located properties, many homes built during this period were in prime locations and of high quality. It was the final surge of building that filled up the last remaining prime positions, producing a resale market today of properties in yesterday’s best locations. However, in general, the architectural style was still what is called ‘traditional’ today, with decorative features marking it out as a Spanish property and painted any colour except white! The minimalist, contemporary style so in demand today had yet to make its mark. 

The Construction Hiatus

After the 2008 meltdown, virtually no new-build property came to the market between 2010 and 2018, due to the almost complete collapse of Spain’s construction sector, which lost about 96% of capacity. Therefore, in 2026, we are looking at a resale pool of properties pre-dating 2008 from the construction boom period, or even older properties, dating from the initial development of Mediterranean regions and these could be as much as 60 years old.  The key point is this: the best plots were built on before 2008. Today, many of these locations are only accessible through resale. But it’s dated, buyers say, and I want a contemporary up-to-date property. What’s the solution? Get those builders in.

Renovating an existing property allows buyers to acquire:

• a better location
• a larger plot 
• a  larger property
• higher long-term value
• a fully personalised property 
• a lower cost per square metre than the new-build alternative

This is not theoretical. It is already happening in the market. One recent example illustrates the opportunity clearly. 

My clients purchased a 20-year-old villa in a 5* beachside location—exactly the kind of position that is now almost impossible to replicate with new-build development. Structurally, the property was sound. The issue was not quality, but presentation. Externally, it reflected the design trends of its time, including a now-dated colour palette. Internally, it no longer met modern expectations. Rather than compromise on location or overpay for a new-build, they chose to renovate. 

The exterior was updated with minimal structural change, retaining the Andalucían character of the property while modernising its appearance. The swimming pool was enlarged and repositioned to better suit the plot. And internally, the property was taken back to the brick and reconfigured to create a contemporary living environment. The result was a property that combined a prime, beachside location, the plot size and scale and proportions of an earlier build, and the finish of a modern home, all at a total cost significantly below that of a comparable new-build.

As with any building project, execution is critical. In this case:

• an experienced architect was introduced
• a proven construction team was selected
• previous clients were available to provide references 
• the buyers were able to visit a live project before committing 

No referral or introductory commissions were involved, ensuring full transparency on costs.  For the full story check out this Case Studies page on our website.

Are there risks involved in renovating? Of course there are but I always ask clients right at the start of a property search if they are up for doing some updating if the locations works for them but the age and style of the property doesn’t. If buyers hesitate  it’s usually due to concerns around time delays, budget overruns, constructor quality, and the challenges of managing a project remotely. But for buyers who approach it correctly — with planning, patience, and the right advice — the upside can significantly outweigh the risks. And it’s amazing what can be achieved via a video link if an urgent decision is required and the client is in Singapore or Scotland. 

Take Your Time

If the property is liveable don’t rush into structural changes. Live in it for a year, understand how it works through all the seasons. The best renovation decisions are informed by experience, not assumptions. Don’t rush anything, planning is everything. A year gives time to meet neighbours, who might themselves have done something similar. Take references. Do everything legally. If you are following a recommendation, always ask whether contractor quotes include referral commissions. It’s your money— and 10% hidden in a quote can be the difference between viable and excessive. 

In a market where new-build prices have moved well ahead of underlying value, renovation is no longer a niche strategy — it is a rational one. The question is not whether renovation carries risk. All property decisions do. The real question is this: are you prepared to overlook the best locations simply because they do not arrive in a finished state?

^{©Barbara Wood}