Relative location

In real estate appraisal, relative location refers to a property’s position within its immediate surroundings-that is, in relation to neighboring properties, the street, the direction of the compass, and distinctive land features. It complements the macro-location (location within the region or city) and the micro-location (quality of location within the neighborhood) with a third, highly nuanced level that often makes the decisive difference between properties of equal price. A good relative location can create significant value advantages even within an average micro-location.

Characteristics of the relative location and their evaluation

Several factors contribute to the relative location: The orientation (south, east, or west-facing) significantly influences sunlight exposure and thus heating costs, comfort, and energy balance. The plot position (corner lot vs. mid-block lot) affects buildability, noise pollution, and privacy. The location within the building (ground floor, upper floors, penthouse) affects brightness, noise, views, and the risk of burglary. Proximity to sources of disturbance-noisy streets, parking lots, commercial units on the ground floor-or to location advantages-quiet courtyards, gardens, water views-significantly shape the relative location. Appraisers take the relative location into account in the valuation as a premium or discount on the comparable value.

Seasonal factors also play a role in assessing the relative location: An apartment that is completely shaded by neighboring buildings in the summer has a poor relative location, even if the micro-location within the neighborhood is good. A west-facing garden property may offer ideal afternoon sun, while an east-facing property only gets sun in the morning. Anyone considering a property should view it at different times of the day and year or use sun exposure analyses.

Relative Location and Rental or Sale Prices

The influence of relative location on prices is measurable: A south-facing orientation can justify a 3-8% premium over a north-facing orientation for properties with otherwise identical characteristics. A quiet courtyard-facing side in an urban area often commands 5-15% higher rents and purchase prices than a noisy street-facing side. Penthouse apartments with panoramic views often command 20-40% higher prices per square meter than comparable ground-floor apartments. These differences must be taken into account when making purchase decisions and evaluating returns, as they significantly influence quality of life and future rentability.

In multi-family buildings, price differences between units are particularly evident. Developers typically publish premium lists showing how much more buyers pay for upper-floor locations, south-facing orientations, or garden access. These lists provide a direct indication of the market valuation of relative location and can be used as a reference for assessing existing apartments.

Strategically Optimizing Relative Location in New Construction and Renovation

In the context of new construction or extensive renovation, the relative location can be partially designed. A new layout can orient living rooms toward the south, bedrooms toward the east, and utility rooms toward the north. Roof gardens, loggias, and extensions can improve views and the quality of open spaces. Soundproofing measures can partially compensate for an unfavorable relative location on a main street-highly insulated glazing, sound-absorbing exterior wall constructions, or a clever floor plan design with buffer zones between the sleeping area and the street can significantly reduce noise levels and enhance the relative location.

Those who invest in existing properties while taking the relative location into account can disproportionately increase the value through targeted upgrades (new windows, facade, attic conversion). An apartment that suddenly gains a rooftop terrace with a panoramic view through the conversion of the attic benefits not only from the additional space but also from a fundamentally improved relative location.

Practical Tip for Property Owners in Nuremberg and Franconia

In Nuremberg’s older building stock, we frequently encounter significant differences in quality within the same building: The courtyard side (quiet, green) is significantly more attractive than the street side facing Kaiserstrasse or the Ring. When determining the price for your property for sale or evaluating a purchase offer, we recommend explicitly including the relative location in the assessment. We are well-acquainted with the noise and exposure conditions in Nuremberg’s various neighborhoods and can assess which apartments in the same building are actually more valuable.

Especially in neighborhoods like Gostenhof, Maxfeld, or St. Johannis, the relative location within a building can make the difference between a quick sale and a prolonged marketing process. A second-floor apartment facing the courtyard in Gostenhof is significantly more sought-after than a ground-floor apartment facing the street-even though both are in the same building. We help you accurately reflect this difference in pricing and marketing.

Frequently Asked Questions

How much does the building’s orientation affect property value?

Experience shows that south-facing apartments and properties in Germany command a premium of 3-8% over north-facing ones with otherwise identical characteristics. The effect is stronger in regions with long winters and for buildings where the outdoor area (balcony, garden, terrace) has high utility value. In the energy assessment (energy performance certificate), the south-facing orientation results in a more favorable heating energy balance, which further influences the value.

Is a corner lot better or worse than a lot in the middle of a block?

That depends on the specific case. A corner lot offers more natural light from two sides, often more design flexibility for the building, and better visibility. The disadvantages include a larger proportion of exterior walls (higher heating costs) and a loss of privacy due to two adjacent public pathways. In urban areas, corner lots are often in higher demand and more expensive; in rural areas, these factors play a lesser role.

How do I consider the relative location when buying a new-construction apartment off-plan?

When buying off-plan, the relative location is particularly difficult to assess, as the building does not yet exist. We recommend: Carefully check the floor plan and building model for orientation, analyze the surrounding development (shading from neighbors) in the floor plan, check the sound insulation of exterior walls and floor slabs, and, if possible, conduct a site visit to assess the noise and environmental conditions. A list of surcharges for better floors or orientations provides clues as to which units the developer considers more valuable.

Can a poor relative location permanently depress the value of a property?

Yes, and significantly so. Persistent noise pollution from a heavily trafficked street, poor sunlight due to permanently shading neighboring buildings, or an unpleasant neighborhood (e.g., restaurant noise, parking lot) are structural disadvantages that can hardly be compensated for by interior design or amenities. In such cases, the purchase price should be set accordingly low, as the poor relative location has a lasting impact on rent and resale value. A realistic assessment of these factors before purchasing protects against long-term disappointment.

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