What Does “Buying Off-Plan” Mean?
Off-plan property is typically sold prior to construction beginning at a significant discount (between 15% to 40%), often with a small deposit requirement (around € 6.000).
Advantages of Buying Off-Plan Properties in Spain
- Real estate prices in Marbella and the rest of the Costa del Sol are rising steadily, and although there’s no guarantee that a home or apartment worth € 300,000 will be worth € 420,000 next year, residential property in Marbella has shown itself to be a safe asset class.
- Buying off-plan lets you purchase property at a price that could be below its future market value and the principle has become a commonplace method of sale across the country; although Marbella and surroundings , due to the exclusivity, best weather, potential returns on capital, and a strong rental market, is where most off-plan purchases take place.
- Buying off-plan is ideal if you want to resell the property once it’s finished. In order to purchase off-plan property, you usually need to provide a deposit of just 10-30% of the property’s value, making securing the property simple and affordable.
- Whether you plan to resell or live in the apartment, one of the biggest advantages of buying off-plan is selection. Unlike in completed buildings, you can usually select the ideal unit to suit your needs, tastes and budget when buying off-plan property.
- In a rising market as the Spanish market that in average is rising 4% in prices and 10% in number of sales, some developers will permit the contracts to be sold on, which means purchasers can take a profit on the unit before it is built by selling the contract or "rights" to another party.
- The Evolution of the price of housing 2nd hand in Málaga is rising from 2.014, more than in the rest of Spain.
- The number of homes sold continues to grow in Marbella, Benahavis, Ojen and Estepona from 2.012.
- As none of the developers built new developments in Marbella and surroundings for almost 8 years, there is a lack of modern / contemporary developments and properties in the Spanish market, so the existing demand is really high between those who were waiting to buy the functional and new modern style apartment or villa they really want.
Disadvantages of Buying Off-Plan Properties in Spain
- Buying off-plan property is far from risky, but after the boom and crash in the real estate market in Spain, the majority of developers are now offering a deposit guarantee for extra security and peace of mind. However, it’s obviously not as certain as buying a new and completed or pre-owned property which you can ‘touch and feel’.
- There’s also the possibility that the property you purchase doesn’t increase in value as much as you expected, or at all, during its construction. To ensure optimum ROI, it’s best to look for off-plan properties that have been built by reputable developers, within areas with growing levels of investor demand. Developments near transport facilities, sea, Puerto Banus or Marbella always tend to do well and areas undergoing regeneration are sure to see an increase in capital value.
What people think about Buying Off-Plan
- Buying off-plan used to be thought of as risky, particularly during periods of poor or unstable economic performance. However, deposit guarantees and the steadily performing Marbella property market, have made buying off-plan property steadily more popular throughout the last 20 years to the extent where it has become commonplace in the Spain property market.
- Off-plan property has been suggested by leading property experts as a good idea for maximising your buying power and potential return on investment. In 2014, The Telegraph referred to it as “a dead cert way of getting more for your money”.
What investors think about Buying Off-Plan
- The best deals on off-plan property tend to be available to investors and cash buyers who buy multiple properties. If you're a buy-to-let investor, you'll get the best rental yields and capital growth. If you''re a buy-to-sell before completion you could be making a 10-20% (or even more) profit in less than 1-2 years.
Buying Off-Plan Property in Marbella and surroundings
- Buying off-plan property is simple, especially with the large amount of development going on in Marbella and surroundings today. A wide range of apartments, from studios to large family apartments and houses, are available for purchase off-plan.
- The point is to pitch the right development and the right property or properties "in" the development. Factors as orientation, block, floor, extra space, etc. are extremilly important. For this issue, you will need to trust and work hard with the best local real estate agent, that knows all the pros and cons of developments and areas.