Spain’s property market has just about recovered after the spectacular property rise and fall which cumulating in the entire market crashing in 2008. Statistics show property sales are recovering. However, real estate agents and property developers are under more scrutiny these days following a number of corruption scandals (the conviction of 50 individuals including the mayor of Marbella springs to mind) and there is now more caution and regulations within the construction sector, which given the negative press over the decades relating to foreign buyers purchasing in Spain, cannot be a bad thing.
In spite of property sales being on the rise, there are still a myriad of bargain properties in Spain to take advantage of, as a result of more supply than demand. With due diligence and research, buying in Spain can still be a worthwhile investment. Sometimes, when you know which area you are interested in, it pays to search online for Spanish estate agencies, known as inmobiliarias. They may list properties that do not appear on international portals and many have English versions available online, so you don’t need to worry about translating information.
Unlike in the UK, It is comparatively easy to find properties below €150,000. But like in the UK there is the ever-important question of location. When looking for a good return on your investment, you must get this right. It’s important to restrict your search to well-known sought-after areas and forget the towns that no-one has ever heard off, even if you find something that is dirt cheap.
Popular coastal area with proven rental and ROI potential include the Balearic Islands, Barcelona, and the Costa Blanca & Costa del Sol. There are also inland towns that offer good value for money which might suit you well if you are planning on living in the property all year round rather than renting it out.
One type of property that’s is gaining popularity is newly constructed accommodation, that is known as “key ready”. Because there is an influx of these properties waiting to be sold by builders who need to pay back loaned money to the banks, you can find some excellent bargains, and in some cases get around 30% knocked off the original asking price. This has opened up a door for purchasers who previously couldn’t afford to buy a new property in Spain.
Buying Off Plan
One way of cutting down on property purchasing costs is to opt for an off-plan property, which are assessed to be an average of 15% cheaper than buying a resell previously lived in home.
An off-plan property is a building that hasn’t yet been built. Off-plan buys are a popular route among investors and speculators. While the building may not yet be constructed, its important that the building plans are in order and planning permission is granted.
This gives buyers some level of protection that the dwelling they are investing in is legal, and the plans allow you to see what the home will eventually look like. Other than price, another advantage of buying off-plan is it may give you a chance to buy in an up-and-coming area before there’s too much demand.
While off-plan purchases are attractive due to the significantly reduced cost, there are some risks connected to this type of purchase which are not applicable for other types of property transactions. The most common issue is the property developer running out of funds and not being able to complete the work, meaning your investment money could be gone down the drain.
Regardless of which type of property you decide to invest in, only once you have consulted a reputable lawyer should you sign any contracts. It is also recommended you have a chartered surveyor inspect the property to make sure everything is in order.