Why do two units in the same project have different prices? One faces south with a view on an upper floor; the other faces north on the ground floor with a blocked outlook. Units with a view and on upper floors can be priced 10% to 30% higher than their equivalents. The concept that creates this difference is the premium.
But if the premium isn't set correctly, two dangerous outcomes arise: if the price is set too high, even advantageous units go unsold and inventory piles up. If the price is set too low, revenue from the project is left on the table. In both cases, the loser is the project owner.
In this guide, we address housing project premium work from the perspective of the project owner and sales manager. We explain step by step which factors should be evaluated, the scoring method, the base-price model and managing the premium with digital tools.
1. What Is a Premium? A Definition from the Project Owner's Perspective
A premium expresses the price difference that arises between units of similar quality in the same project. This difference stems from advantages such as the floor the unit is on, the façade direction, the view, sun exposure or position within the complex.
From the buyer's point of view, the premium expresses the extra amount they pay. But from the project owner's point of view, the premium carries a completely different meaning: it is a pricing exercise that, without changing total project revenue, prices units in proportion to their desirability.
In other words, the project's total revenue target is fixed. The premium work distributes this target by giving higher prices to advantageous units and lower prices to disadvantaged ones. That way each unit is priced at its true market value and sales speed is balanced.
Small-scale contractors do this intuitively: south façade and upper floors a bit more expensive, ground floor a bit cheaper. But in projects of 50+ units, this approach falls short. Pricing hundreds of units with dozens of different variables requires a systematic method.
2. 8 Core Factors in Setting the Premium
In premium work, each factor is assigned a weight score. The following 8 factors are the most commonly used evaluation criteria in housing projects in Turkey.
2.1. Floor Level
Upper floors are generally more valuable. As command of the view and privacy increase, so does the price. Penthouse units, with the advantage of a large terrace and open outlook, have the highest premium value in the project. However, upper floors can be a disadvantage in buildings without an elevator; the evaluation should be made according to the target-audience profile.
2.2. Façade Direction
Because Turkey is in the northern hemisphere, the south façade always gets more sun and is considered more valuable. The north façade is disadvantaged in terms of daylight. East and west façades are positioned at a mid value. The façade factor alone can affect the price by 5% to 15%.
2.3. View
Units with a sea, forest, park or city-skyline view capture a clear price advantage. Units facing an opposite building or an inner courtyard may fall below the reference price. The impact of the view factor varies from 5% to 20% depending on the project's location.
2.4. Position Within the Complex
Even in the same project, some blocks are in a more advantageous position. Blocks close to the main entrance, social facilities, the pool or green areas are preferred, while blocks close to the parking entrance, the garbage-collection point or a traffic road are valued lower.
2.5. Noise Status
Units close to a main street, highway or metro carry a noise disadvantage. Units on the inner façade, in a quiet position, earn a premium. This factor is especially decisive in city-center projects.
2.6. Proximity to Amenities
Units within walking distance of amenities such as the pool, gym, playground and walking paths gain extra value. However, units with a façade directly onto the pool or play area may be considered disadvantaged in terms of noise; this balance must be struck well.
2.7. Balcony and Terrace Area
A large balcony or terrace, especially in units with a view, significantly increases the premium value. Units without a balcony are scored lower even on the same floor. The net square meters of the terrace area should be evaluated as a separate item in the scoring.
2.8. Parking Position
A value difference arises between units with covered parking, open parking or no parking. Covered parking next to or beneath the unit carries the highest value, while open parking in a distant position gets the lowest score.
3. The Scoring Method: Step-by-Step Premium Calculation
The premium calculation process is based on the principle of scoring each unit's advantages against certain criteria and reflecting these scores in the total price.
Step 1: Determine the factors and their weights. Assign each factor a weight percentage based on the project's characteristics. For example, in a project with a view, the weight of the view factor may be 25%, while in a city center the noise factor may rise to 20%.
Step 2: Create a scoring scale for each factor. A scale of 1-5 or 1-10 is usually used. For example, for floor level, the ground floor may get 1 point and an upper floor 5 points.
Step 3: Score each unit one by one. All independent units in the project are scored against the defined factors. As a result, each unit gets a total weighted score.
Step 4: Set the lowest-scoring unit as the base price. The most disadvantaged unit is taken as the reference (coefficient: 1.00). All other units get a coefficient relative to this reference.
Step 5: Convert the coefficients into prices. Multiplying the base price by the coefficient gives each unit's m² sale price.
The most important point to watch in this process is: total revenue does not change. The premium work is not a tool for increasing revenue, but a tool for distributing it.
4. How to Build the Base-Price and Coefficient Model
The base price is the per-square-meter sale price of the lowest-value unit in the project. This price is usually determined by evaluating together the area's comparable sale values, the project's cost analysis and the assessment of a CMB-licensed valuation expert.
Steps to set the base price:
- Comparable analysis of the area: Collect the m² sale prices of similar-quality projects nearby. Determine the margin between the lowest and highest prices.
- Cost calculation: Divide the total project cost — including land cost, construction cost, financing expenses and profit margin — by the total sellable m². This gives you the break-even point.
- Expert valuation: The valuation expert determines the lower and upper price margin taking into account the demand dynamics in the area and the project's positioning.
Applying the coefficient: In a project with a base price of ₺100,000/m², a unit with a coefficient of 1.15 has a m² price of ₺115,000. If the highest-coefficient unit is 1.30, its m² price reaches ₺130,000. The difference between coefficients usually increases gradually in a range of 0.01 to 0.05.
It is recommended that the difference between the lowest and highest coefficient within the same project not exceed 30%, in order to preserve sales balance. Differences above this margin can lead to low-coefficient units going unsold.
5. 5 Common Mistakes in Premium Pricing
Mistake 1: Looking only at floor and façade
Many contractors reduce the premium to just the formula "top floor expensive, ground floor cheap." Ignoring factors such as noise, position within the complex, parking and proximity to amenities causes some units to be priced below or above their true value.
Mistake 2: Not knowing the target audience
Upper floors may be a disadvantage in an area with a large elderly population, while ground-floor units with a garden may earn a premium in a project targeting young professionals. The premium work should be done according to the target audience's preference patterns.
Mistake 3: Not updating after launch
Market conditions, interest rates and demand intensity change. Never updating the premium table set at launch causes unsold inventory to pile up. Periodic price revision according to sales speed is necessary.
Mistake 4: Using the premium as a revenue-increasing tool
The purpose of premium work is not to increase total revenue, but to distribute existing revenue fairly. If prices are inflated by adding a premium to all units, the project's alignment with the area's comparable prices breaks down and sales speed drops.
Mistake 5: Tracking in Excel but failing to reflect it in the field
The premium table is prepared, but if the team at the sales office can't access the current prices, all the work is wasted. For sales advisors to be able to see instantly which unit is at which price, a digital inventory-management system is essential.
6. Managing the Premium with Digital Tools
In projects with 50 or more units, running premium management on an Excel spreadsheet carries serious risks: version confusion, out-of-date prices and the sales team offering the customer the wrong information are chief among them.
The advantages digital inventory and premium-management tools provide:
- Live inventory view: Tracking sold, optioned and available units by block, floor and unit on a single screen. The sales advisor sees the current status instantly while talking with the customer.
- Pricing on the digital 3D model: Being able to see the premium coefficient, m² price and total amount by clicking on each unit on the interactive 3D model. Price information is conveyed simultaneously while making a visual presentation to the customer.
- Automatic price updates: Changes made in the premium table are instantly reflected on the screens of the entire sales team. Version confusion is eliminated.
- Payment-plan integration: Down-payment, installment and promissory-note plans are created automatically based on the unit price set by the premium. Manual calculation errors are prevented.
- Reporting and analysis: By seeing which premium segment's units sell faster, you can make price-revision decisions based on data.
Digital tools take the premium work out of being a one-time static table and turn it into a dynamic pricing system that can be continuously optimized.
7. Example Scenario: A Premium Table for a 120-Unit Project
Let's examine how premium work is applied in practice with a concrete example.
Project profile: A housing project in Istanbul with 3 blocks, 10 floors, and a total of 120 units. Area comparable m² price: ₺90,000–120,000. The project's target average m² price: ₺105,000.
Step 1 — Factor weights:
| Factor | Weight |
|---|---|
| Floor level | 20% |
| Façade direction | 20% |
| View | 25% |
| Position within the complex | 10% |
| Noise status | 10% |
| Balcony/terrace | 10% |
| Parking | 5% |
Step 2 — Scoring (1-5 scale):
| Criterion | 1 point | 3 points | 5 points |
|---|---|---|---|
| Floor | Ground | Floors 4-6 | Floors 9-10 |
| Façade | North | East/West | South |
| View | Blocked | Partially open | Full sea/forest |
| Position in complex | Next to parking entrance | Mid position | Facing pool/green area |
| Noise | Main-street side | Mid | Quiet inner façade |
| Balcony | No balcony | Standard balcony | Large terrace |
| Parking | None | Open | Covered |
Step 3 — Sample unit comparison:
- Unit A (Ground floor, north façade, blocked view): Weighted score: 1.85 → Coefficient: 1.00 → m² price: ₺90,000
- Unit B (5th floor, east façade, partial view): Weighted score: 3.10 → Coefficient: 1.12 → m² price: ₺100,800
- Unit C (10th floor, south façade, full sea view, large terrace): Weighted score: 4.70 → Coefficient: 1.28 → m² price: ₺115,200
In this model, the difference between the lowest and highest price is 28% and remains below the recommended 30% margin. When the weighted average of all 120 units hits the target of ₺105,000/m², the premium table is complete.
Critical note: This table is a living document after launch too. By analyzing sales speed in the first 3 months, you can lower the coefficients in segments that aren't in demand or revise prices in fast-selling segments.
Conclusion
When done correctly, housing project premium work both prevents inventory build-up by balancing sales speed and maximizes the project's revenue potential. To summarize the key points covered in this guide:
- The premium is not a revenue-increasing tool but a revenue-distributing tool — it doesn't change total revenue, it distributes it fairly.
- Floor and façade alone are not enough — at least 8 factors such as view, noise, position within the complex, balcony and parking should be evaluated.
- A systematic scoring method always delivers more consistent results than intuitive pricing.
- The premium table is not static — it requires periodic updates according to sales data.
- In projects of 50+ units, digital tools lower the error rate and let the sales team work with current information.
If you want to run premium management in an integrated way with a digital 3D model, live inventory tracking and automatic payment plans, get to know Evon. By managing your premium coefficients by block, floor and unit on a single platform, you can ensure your sales team always works with the right price.
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See for yourself how Evon can add value to your sales process.
Frequently Asked Questions
How large can the premium difference be?
A price difference of 10% to 30% can arise between the least and most advantageous units in the same project. In exceptional cases such as a sea view or penthouse, this ratio can go even higher.
Who calculates the premium?
In large projects, CMB-licensed valuation experts, and in small projects, experienced sales managers and developers carry out the premium work.
What is the most common mistake when setting the premium?
The most common mistake is looking only at floor and façade and ignoring the other factors. Criteria such as noise, transport distance and position within the complex also directly affect the price.
Does the premium table change after launch?
Yes. Premium coefficients are updated according to market conditions, sales speed and demand intensity. This is why digital inventory-management tools provide great convenience.
Is software necessary for the premium work?
Excel may be enough for small projects, but in projects of 50+ units, digital 3D model and inventory-management software both lower the error rate and let the sales team access live price information.
