LAST year was an exceptional year for the Costa del Sol property market.
Most of the agents along the coast, including us at Terra Meridiana, reported record sales in 2021.
Demand for almost every kind of property, from plots of land to turnkey villas and from brand-new apartments to townhouses for renovation, has outstripped supply.
It means buyers now have less and less stock to choose from, particularly at the high and lower ends of the marketplace.
One trend we’ve noticed is an increasing number of overseas buyers who are only interested in buying brand-new properties.
I am going to let you into a little secret: in my opinion, you are usually better off buying a resale property.
While we don’t mind selling off-plan homes – we currently have over 300 new properties on our books, out of 850 listings – we always advise clients to weigh up the pros and cons of each, before making a decision and signing on the dotted line.
However, unlike many agents on the Costa del Sol, just three of the 50-plus deals we did in 2021 involved new properties.
THE APPEAL OF BUYING NEW-BUILD OR OFF-PLAN PROPERTY
There are, undoubtedly, lots of pros to buying a new property.
Like a car, you get to experience that ‘brand new feeling’ while you’ll benefit from the latest technology and contemporary design and, if you get in early enough, you may even get to adapt the layout and change fittings and finishings to suit your taste.
These advantages can be hard to find in a resale property, unless it has been renovated to modern standards.
The biggest problem with new properties is location.
Because of the lack of availability and high price of building land in prime locations, many new developments are located far from services and transport connections or have no infrastructure in place at all.
Second, new homes tend to be smaller and priced higher, in terms of price per square metre, than comparable resale properties.
Third, brand-new doesn’t necessarily mean perfect, as even the most recently completed properties can have issues.
And, finally, we always advise clients that they are buying a community first and an apartment second; if you buy in a new development, you are buying into an untried community.
WHAT AGENTS DON’T TELL YOU ABOUT NEW-BUILD AND OFF-PLAN
What most agents will never tell you is it’s harder to sell resale properties and much less profitable.
In the first place, you really need to know the market well to sell resale properties.
You have to understand the pros and cons of, and potential issues with, different urbanisations, such as community fees, debtors, and how well the community is managed.
It’s much easier to sell a new property in a community that does not exist, where fees are not fixed and management is untested.
And, in a resale property, you can see where the sun will be at 7pm in the summer and, more importantly, 5 pm in the winter.
However, if you can find a property you like in a new development, which is in a good location and selling for a reasonable price, it may be preferable to buying resale property.
The problem is that too many buyers sacrifice location for new and, when the market softens, may be unable to sell and eventually lose money.
What some people fail to realise is, when they come to sell in 10 years’ time, they will not be selling the new home they bought, but a resale property in a less desirable location.
SOME GOOD REASONS WHY YOU SHOULD BUY RESALES
Many of the pros of buying a resale property are obvious: you can see – and even get a survey done to check, if you wish – exactly what you’re getting.
You can also see what’s around you, so you won’t be surprised by any new development once you move in.
You may also want to live in an area where there simply are no new-builds for sale nor any building land left for construction; and you might even walk into a sellers’ home on a viewing and think to yourself, ‘I’d love to live here’.
There are other advantages to purchasing a resale property too: Gardens in existing developments will be mature, communities of owners will be up and running smoothly, and you can see exactly how long it will take you to walk or drive to local services because they’re already there.
Then, there’s the cost. As a general rule, you get more space for the same price in a resale property, because buyers and sellers both expect to have to spend a little extra, maybe to redo a kitchen or bathrooms, in an older place.
But the best reason for buying a resale property is location. With very few exceptions, prime development land has already been built upon.
There’s a good reason for that; the best locations always get developed first.
When you buy a villa, the land is more important than the villa itself, because you can always change the building, but you cannot change the plot.
Likewise, with an apartment, you can renovate to contemporary standards, upgrade installations and even alter the distribution if you wish, but you can’t change its location.
The bottom line is: properties in good locations always sell better. And a resale property is more likely to be in a good location than a new one.
The mantra of location, location, location is just as important for buyers as it is for sellers.
WHAT CAN YOU DO ABOUT DEFECTS WITH NEW AND RESALE PROPERTIES?
Since May 2000, all new properties in Spain that are built by a developer or builder for sale to third-party buyers are legally required to be covered by a 10-year warranty that protects the safety of its occupants against structural defects.
This is usually provided by an insurance policy taken out by the builder or developer.
Buyers, however, do need to know their rights to make the most of this coverage, as generally the sooner you can get any problems fixed, the better.
Buyers of resale properties in Spain are also protected by Spanish law against hidden defects, although the requisites for proving the seller is liable are more demanding.
The defect in question must be serious enough to put the stability of the property at risk, it cannot be not be visible, and it has to prevent the buyer from living in the property in normal conditions.
In addition, buyers only have five years to address claims and have to prove the defect already existed at the time of purchase.