Why Off plan Property In Spain Is the Most Popular Way To Buy
It is fairly common to see off plan property investment taking place virtually anywhere in the world where there is some new development activity in the real estate or property market. However off plan property in Spain specifically has just gone through the roof in recent years and this is one of the trends that has fueled even more frenzied activity in the Spanish construction industry.The beautiful weather in Spain and the rapidly appreciating value of virtually any dirt with some mortar on it has conspired to create a very high demand for off plan property in Spain over recent years. Buying ‘off plan’ means reserving a property on a new development before construction has even started or been completed. Often enough this purchase is made before even the ‘Licencia de obra’(license to build) has been issued or granted. Despite the fact that there is some element of risk involved in using this option to buy property, it is usually very popular with speculators or investors looking to make a return on their real estate investment. The highest risk is that the developer could run out of cash, fail to complete the project and file for bankruptcy. That would usually leave buyers to bear the loss of the money that they have paid up front. This is actually a very rare occurrence anywhere in the world, even in Spain and the majority of developers offer bank guarantees to prevent this happening. If you are thinking of buying a property in Spain off plan, check that the builders offer this guarantee. Once a building is almost complete however, you can be assured that you will not need it. However it does illustrate the fact that one cannot be too careful in these matters. When a new development is first released, prices are at their very lowest, and a ‘pre-launch price’ is often offered by the developers on a first come first served basis. Buying at these prices ensures optimum increases on the value when the purchaser comes to sell, which dedicated investors will often do well before completion of the development. These people have bought solely to make a profit. As the development progresses, prices are likely to increase, but as long as you purchase whilst it is still considered to be ‘off plan’, profits can be excellent. Apart from clients interested in off plan property in Spain for investment purposes, there are those buyers interested in owning a place in the sun, but may not be in a terrible hurry to use the premises or to move in - at least not in the short term. These are the two main groups of buyers of off plan property in Spain that have been responsible for keeping the country’s construction boom going for a number of years now. The biggest ‘boom’ to hit Spain in the past two years, especially on the Costa Calida, is aimed at the leisure industry – the golf resorts of Murcia, which is tipped as the hottest investment opportunity for 2006, and the attractive beach clubs such as Roda Beach Club and Nueva Ribera. The fact that there are constantly a huge number of new constructions going up all over Spain means that several options are always available for a would be buyer in many different regions and locations in the country. Ranging from small apartment blocks to colossal complexes complete with golf courses usually means that any investor will be spoilt for choice. This is the sort of situation that makes it relatively easy for anybody looking to buy new property in Spain to be able to find what they are looking for. Excellent mortgage rates, higher borrowing rates for foreigners, and many developers offering ‘easy buy’ payment schemes will keep the off plan property market in Spain going for a long time to come.
About the Author
I have worked in the rentals business for the past 6 years and living in Spain for the past 4. I now manage Citrus Iberia (CB), a British Estate Agents on the Costa Blanca offering Spanish property for sale, Property management, holiday
Tell others about
this page:
Comments? Questions? Email Here