Off-plan property makes a comeback in Spain
This article is republished from Inman.com
More than 25% of buyers are choosing to buy
- Market entering a positive cycle, prices are growing and planning permission for development projects are on the rise.
- Payments by instalment, value per square metre and lower property maintenance costs make it a sound financial buy and
- Laws regulating new projects have been strengthened and offer reliable protection against dishonest developers.
- Environmentally friendly materials, strict regulations on energy efficiency and solar energy bring down monthly bills.
1. The market is ripe
The property market is finally rising from the ashes of its bleak
There are a few
Vacancy levels have dropped on the new build market. The number of new properties that are vacant has decreased by 18% to 536,000 in 2015 in comparison to 650,000 in 2009.
2. There’s money in market hotspots and the suburbs
It’s a buyer’s market for new builds in Spain after an
Prices for “standard” new builds are currently at May 2002 levels, substantially lower than the market hay day in 2007/08. This means better value per square metre but also that property will grow in value, secured by
“Prime” new builds are always in demand and were sheltered from the devaluation because they are located in market hotspots like the most exclusive areas or historical centres of Spain’s top cities and cater to wealthy buyers who are typically less affected by economic strife. Barcelona boasts the most noticeable growth of Spain’s construction market: as many as 58 new projects have been launched in 2015 and
3. Your finances will thank you
After that, you pay by instalment for each successfully completed stage of the construction. To protect buyers, the funds are transferred to an escrow account and only released when the developer successfully completes each stage of construction in accordance with the planning schedule. If the terms of agreement are not fulfilled the money returns to the buyer.
Of course, I cannot encourage buyers enough to engage a qualified and registered lawyer to make sure all the paperwork is in order, but if it is, these terms offer good protection against unscrupulous developers. Don’t forget to factor in VAT (10%) and registration fees (1%) into your
4. Developers must abide by the rules
Minor issues like flaky paint, broken doorknobs, leaking faucets, faulty window frames and broken home appliances must be reported during the first year and preferably before the buyer pays the final instalment.
Major issues posing a threat to the inhabitants’ health or the environment should be reported during the first three years after the building receives its Licence of First Occupation or LFO (Licencia de Primera Occupación). These include humidity and insulation issues resulting in mould, leaking gas pipes, electrical or plumbing faults, etc.
Structural problems are protected by a
5. Your comfort is planned for
They often come fully equipped (kitchen, aircon, etc.) and have a range of turnkey options for the finished interior that allow buyers to choose everything from the room layout to the paint colour and doorknobs. If there are problems with the major fittings, rather than having to foot the bill or hit up the insurance like in
New techniques and technology maximise space and adapt the building to new expectations. Inner city developments now have roof pools, terraces, leisure areas and parking spaces. Effective soundproofing means you never have to hear/bother your neighbours again. Home automation systems and video intercom systems simplify your life and increase the building’s overall security.
6. Property experts are on your side
When the bubble burst in Spain, many shortcomings in the real estate sector were brought to light in appalling circumstances: unfinished projects, poor insulation and mould, breaches of local planning laws, etc. Thousands of foreign owners found themselves in dispute with local courts, in some cases leading to the demolition of the building they had bought.
It is important to protect yourself from unscrupulous developers and
Yulia Kozhenikova, Tranio