The Spanish real estate market is becoming crowded with cranes and the sound of excavators removing land where, in a few months, brand new homes will be built. Something is changing; all you have to do is step outside or take the car to notice it.
Although it’s still early to launch campaigns—the sector prefers to talk about prudence instead of euphoria, stabilization instead of recovery—the market is once again inviting optimism.
Mortgages increase, more houses are being built and more are being sold. While second-hand properties still win by a landslide—the statistics are being distorted by the allocation of flats by the banks—newly built houses have once again come back into demand. Thus, the purchase of a house off plan, a practice that became practically anecdotic with the crisis, returns to prominence seven years after the real estate crisis.
There are several advantages of buying off plan constructions. Brand new houses generally do not need rebuilding. Some promoters even allow future owners to adapt the house to their tastes or needs—for example, to convert a 4-bedroom home into a 3-bedroom home with a larger living room—but the main advantage is that buyers don’t need to make a large cash outlay at the outset, but can make small contributions that are deducted from the final price until the day they receive the keys. The main disadvantage of new construction is that the house is not yet finished—construction can last between 18 and 24 months—so the house cannot be used immediately.
Recently, several dozen people waited in line through the night to book one of the 62 homes that Solvia will soon build in Barcelona, their first promotion in the capital. “It seemed like a scene more like a concert to see the Rolling Stones,” explains Augusto Monte to El Confidencial, director of marketing and transactions of the company. “An enormous expectation was generated because it was a well located product, with very good quality and with a very attractive price, no bargains, evidently it was something exceptional and it is not possible to generalize what happened with that promotion.“Despite this, Monte acknowledges that the fear of buying new construction has been mitigated in recent months.
“We still notice a lot of uncertainty among the future buyers, many of those who enter the sales booth ask us when the works are going to start, they have some fear that the construction will be delayed or not be carried out,” says Inmaculada López-Gasco, commercial manager of Magnum & Partners, which last April began the commercialization of 63 homes in San Sebastian de los Reyes. “We have already sold 16 – 25%, and the license to start the works will take effect in June, so once the bulldozers start digging we expect sales to accelerate.”
The new construction projects are, in fact, the star product of this edition of the fair. Some entities recognize their preference to start up new promotions—adapted to the consumer demand for good qualities and attractive prices—than to finish projects in progress that cannot adjust to what the buyer is looking for in regards to price neither in terms of typologies nor qualities.
Purchasing an off plan property can be a challenge especially when you are not familiar with the local laws and regulations, culture, language, etc. STRATA is ready to help you eliminate these barriers and to find and identify the best real available opportunities in the market, providing you with adequate tools and resources to evaluate and verify real estate suitability during their investment negotiations.