Renovation or New Construction – What Really Pays Off?

If you own an older property or plan to purchase one, you’ll sooner or later face a strategic decision: Should you renovate, or is a complete rebuild the better solution? The answer is rarely clear-cut. It depends on a variety of factors – such as the condition of the property, building regulations, environmental goals, and not least, financing.

Published on: April 15, 2025 | Reading time: approx. 5-10 minutes

Cost-effectiveness – What Does the Cost Comparison Say?

A key criterion is identifying the most economically viable solution. In general, renovation can be more affordable – but not always. Depending on the scope of work, the building’s age, and existing defects, costs can quickly add up. Technical renovations – such as work on the building envelope, heating, or piping – tend to be particularly expensive.

A new build, on the other hand, offers planning certainty: From the outset, modern building standards are implemented, and there are no hidden issues from the past. In the long term, it can also pay off – for example, through lower operating costs, reduced maintenance, and a higher resale value.

Typical Cost Considerations Compared:

• Renovation: Lower initial cost, but risk of unforeseen expenses
• New Build: Higher capital requirement, but potential for long-term savings

A well-thought-out mortgage comparison helps tailor financing to your specific project – including how much equity is required and whether subsidies or tax benefits can be used. Learn more about potential subsidies here.

Sustainability – Planning with Ecological Goals in Mind

Ecological aspects are becoming increasingly important in real estate planning. Renovation often conserves resources by reusing existing building structures. This reduces the use of grey energy – the energy required to produce and transport construction materials.

A new build, on the other hand, offers the chance to implement cutting-edge energy concepts: solar panels, heat pumps, Minergie standards, and sustainable materials. This can not only reduce your CO₂ footprint but also significantly cut future energy costs – an argument that is gaining importance for banks and financing partners as well.

Ecological Considerations:

• Renovation: Resource conservation, preservation of architecture
• New Build: Efficiency, modern technology, future-proof solutions

If sustainability is a priority, both options should be critically assessed – ideally with professional ecological and financial evaluations.

Legal Factors – What Is Permitted and What Isn’t?

Not every project can be implemented everywhere. Especially in rural areas, protected zones, or with listed buildings, a new build may face legal limitations. In such cases, renovation is often the only option – and even that may come with certain restrictions.

A clear advantage of renovation: The process is often quicker and involves less bureaucracy. The existing structure offers flexibility – and in some cases, attractive tax benefits.

Our tip: Clarify early on what is legally permitted – and how this affects your financing and possible mortgage models.

Renovation or New Construction – Plan Your Financing Right with HYPOHAUS

Whichever option you choose – financing should not be a stumbling block, but an integral part of your planning. At HYPOHAUS, we support you with our expertise. We analyze your project in detail, compare offers from various financing partners, and work with you to develop a viable mortgage solution tailored to your needs.

We provide personal, transparent, and collaborative advice. We assist you in choosing the right model – whether it’s a fixed-rate mortgage or a variable solution – and accompany you throughout the entire financing process. You can find an overview of HYPOHAUS services here.