Price per square metre: how to compare homes fairly

Two houses on the same street, 295,000 and 345,000 euros. Which one is priced better? Without the floor area, you cannot answer that question. The price per square metre is the first tool for seeing through asking prices, but it is also a tool you can use incorrectly. Here is how it works, and where it goes wrong.

Why the asking price is misleading

An asking price is the seller's opening bid, coloured by emotion, by what the neighbours asked and by the estate agent's strategy. Some agents price low to trigger a bidding war, others price high to leave room for negotiation. In Belgium, the actual sale price is on average a few percent below the asking price, but with large outliers in both directions.

The price per m² and the median

Divide the asking price by the liveable floor area and you get a comparable figure. On ikzoek.immo we show that figure for every property, alongside the median for the municipality (or for the province if the municipality has too little supply) for the same property type. If it says "8% below the median for Ghent", you immediately know where the property stands in the market.

We use the median rather than the average, because a couple of two-million-euro villas would skew an average considerably. The median is the price below which half of the properties fall and above which the other half fall. The property barometer shows that median per municipality and per type, based on current supply.

Five adjustments you need to make yourself

A deviation from the median is a signal, not a verdict. These factors explain legitimate differences:

1. The energy label. A home with an A label is structurally more expensive per m² than an F label in the same municipality. So compare within the same label, or use the renovation value calculator to express the gap in euros.
2. The plot. The price per liveable m² ignores the garden. A terraced house of 140 m² on a 120 m² plot and the same house on an 800 m² plot are not comparable properties. Calculate the land separately using the local land price.
3. The condition. Move-in ready, good condition, needs renovation: each step easily makes a difference of 10 to 20% per m². Add the renovation cost to the price before you compare.
4. How the floor area is measured. "Liveable floor area" is not standardised. One agent counts the garage and the attic, another does not. Ask for the EPC: it states the usable floor area according to a fixed method.
5. The location within the municipality. A median per municipality hides differences between the centre, a housing estate on the outskirts and a busy arterial road. Check the map for comparable properties in the same neighbourhood.

An example

At first glance, home B is cheaper per m². After adjusting for the renovation, it is still slightly below the median, but the difference is smaller. Whether it is the better buy then depends on the energy cost in the meantime and on how much space you actually need.

What the price per m² does not tell you

Natural light, layout, street noise, the neighbours, the school around the corner: no calculation captures that. Use the price per m² to decide which properties to visit and how far your offer may be from the asking price, not to make the decision for you.

How to use it when making an offer

If a property is listed 12% above the median without the label, condition or plot explaining that, you have an objective argument for offering less. If it is 10% below the median, there is probably a reason: check the label, the location, ongoing procedures or an easement. And if it has been online for four months already, the market agrees with you. Read more about negotiating in making an offer.