WHY INVEST IN OFF PLAN SPANISH PROPERTY?
The property market in Southern Spain is seeing a new surge in demand for both sales and rentals. This situation is reflected in the latest Real Estate Registry Statistics, prepared by the Spanish Land Registry Offices, which shows that the price of housing increased by 9.4% year-on-year in the first quarter of 2018.
According to the study, property purchases between January and March this year stood at 128,990 transactions, up 13.4% year-on-year and 15.3% more than the previous quarter. The Spanish property market hasn’t seen these kinds of sales figures since 2008.
Off Plan Property In Spain
Off-plan property investment opportunities are growing in the south of Spain. Many international investors are now recognising that the demand for Spanish off plan property is increasing.
The market for Spanish off plan property both as an investment and as a second or first home is heating up.
Spanish off-plan investments can offer investors the ability to achieve substantial returns in a relatively short timescale.
As the market heats up returns of 20 to 60% within 24 months are becoming possible.
If you choose to keep your property after completion for a number of years you may then benefit from excellent rental income opportunities. This would also allow you to enjoy using the property for personal and family holidays as well as benefiting from capital growth in the value of your Spanish property and of course the rental income generated by marketing your Spanish property as a Spanish holiday rental unit.
Spanish property developers and builders will offer beneficial stage payment schemes to purchasers of and investors in Spanish off plan property.
We choose to work with with only the most reputable and secure development companies that operate in prime areas for Spanish investment property.
The range of payment schemes currently on offer will allow you to buy your chosen Spanish property off-plan, before or during construction while the price remains low, with deposits payments of around 30% of the property price.
At completion of the property, given the current demand and market forces prices will have increased. Investors may choose to sell the property onto another property purchaser and in doing so, benefit from excellent returns.
It can be demonstrated that current investors are enjoying 10 to 50% returns against capital investment by following this pattern and selling before property completion.
We would of course recommend that all investors exercise due diligence and choose carefully to be sure that the off-plan Spanish property being purchased as an investment is located in a high demand area thus offering the ability to resell quickly and easily or where there is a high rental demand for their buy-to-let option. With an off-plan investment, if the property is not sold prior to completion, the final balance due can often be financed by the developer or a bank associated to the development. In many cases the rental income can pay off the finance and yield further eventual returns on the investment.