Which type of property would suit you?

New Build Properties
A new property is one which is being sold by the builder and has not been occupied previously. This category can be broken down into those
which are still in the planning stages or are currently under construction, and those which are structurally complete and ready to move into.
Off Plan/ Under Construction: Following the famous property boom of the late 90’s to early 2000’s, buying property off plan has become the most popular way to buy along the Spanish coastline, and is particularly appealing to the expat market. Unfortunately, as a result of problems with supply and demand, home buyers have often been forced to wait a considerable time for the completion date, which has been over 12 months later than anticipated in many cases. At a time when house prices were rising rapidly, buying off plan was the cheapest way to buy, as the purchase price was fixed at the time of signing the contract, as soon as the stipulated deposit was paid. Conversely, buying an existing property usually carried a premium, which could considerably bump up the purchase price. Banks were offering 100% mortgages to virtually anyone who walked through the doors, irrespective of their credit status, and exchanges were often at least partially arranged in cash payments under the table before arriving at the notary to exchange remaining payments and legalize paperwork. Needless to say that this practice was very short-lived, and when the world was plunged into financial crisis, Spain and its once thriving property market was hit harder than most. Demand for property suddenly dropped considerably, builders hit dire straits due to colossal finance agreements and the banks finally recognized their own errors in the cycle, quickly enforcing over-stringent conditions in their mortgage agreements, which meant that unless you had a massive wad of cash to put down as a deposit you no longer stood a chance. There were various negative consequences in the process, including a halt on building new developments whilst construction companies struggled to sell off their existing, unsold properties and generate some cash.
The good news is that this situation was only short term, and by 2012 Spain saw a considerable rise in property development once again, and now with the growing trend for an ultra modern style of housing, with less emphasis on the traditional Mediterranean casa. The improvement in the market is thought to be due to an influx of buyers from Scandinavia, Holland and Belgium who were keen to take advantage of the “Key Ready” properties waiting, snap them up at rock bottom prices, whilst simultaneously providing a lifeline for the construction industry. The industry is now quite different to that seen a decade ago, with only a small nucleus of well established and respected companies still operating, who have the capital to invest in buying land to develop without the need for financial backing by the banks. This means increased security for the buyer, as they do not have to worry about the bank or other third parties foreclosing on the project if the builder fails to keep up with repayments.
In spite of this, there is still far less faith in the new build market than there was ten years ago, especially among the expat community, which has been bombarded with scare stories about buying in Spain by the national press. From the keen buyer’s perspective, this is not necessarily a bad thing, as it gives them a wider choice of high quality properties and locations on the coast, and greater pulling power to secure an attractive deal that looks favorable against the resale and bank repossessions markets. Those builders that have been willing and able to deliver on that basis are now selling properties at a very satisfactory rate. Average build times are now around 12 months, but the margin of delay beyond the date forecast has decreased significantly. You should expect to pay anywhere between30 and 40% of the total price over the first three months, then the rest on completion. In addition, it is important to ensure that your money carries a “Bank Guarantee”, so is being held securely whilst construction is in progress. Most reliable construction companies will do this automatically these days, but we recommend that you get it in writing for increased peace of mind.

Key Ready
These are properties that are structurally finished and ready to move into, but still awaiting a buyer. Builders will usually be eager to sell these first, before pushing for off plan sales, as they are often mortgaged and the builder will also be responsible for paying local taxes and community fees for them until they are signed over. For this and the reasons stated above, many key ready homes on the coast are now available at amazing prices, having been reduced for a quick sale. Builders might also offer incentives for the sale of the last few properties on a development, such as a higher quality finish on the kitchen or bathroom, the inclusion of a furniture package, additional land or a swimming pool. As astute investors from other parts of Europe snap them up, the number of bargain key ready properties is diminishing, which is great news all round, as there is nothing worse than seeing brand new properties being left empty and beginning to deteriorate through lack of maintenance. As soon as the finished properties are sold, the builder has a bit of spending money to plough on with the new build projects to keep the whole process ticking over. Therefore, this is an important link in the property chain, with attractive benefits on all sides!

Rural Properties and Fincas
When people dream of owning a Spanish property, they will often envisage a small holding in the country, with white washed walls, wooden window shutters and surrounded by vine yards or orchards brimming with juicy citrus fruits. It is a wonderful thought, especially if your prime reason for relocating is to escape the rat race and enjoy a slower pace of life. However, the reality is that these types of coastal properties have in recent years been the most problematic, bringing buyers a multitude of expensive legal issues and red tape to overcome. Reliable connection to utilities is not standard with the majority of country properties, which rely on antiquated wells, which are usually accessible from the kitchen, or septic tanks for water, and generators for electricity. In most cases, the property will require extensive renovation work to make it habitable, which could be incredibly costly and stressful, particularly if you do not speak Spanish, as the local tradesmen are unlikely to speak English. Rural properties were selling rapidly ten years ago, but due to the many pitfalls involved in the purchase, along with reports of people, mainly expats, losing their property to demolition orders due to lack of planning permission, there are now far fewer available on the market. The majority of bigger Real Estate companies actually refuse to market rural properties due to the lack of security and legal constraints. In a nutshell, you may find yourself shelling out a small fortune to live a very primitive existence, compared to what you have been accustomed to. Plus buying this type of property always involves an element of risk, no matter how much research you think you have done to avoid any unwanted surprises, so it is really your choice if you are willing to take that risk on a substantial investment, and great deal of blood, sweat and tears.

Resale Properties
This section relates to properties that have been previously owned, and operates in a similar fashion to the UK resale market, in that there are endless possibilities available. If you opt for a resale property, you have a wide choice of locations, property types and budgets at your disposal. The previous owners will be selling up for all manner of reasons- they may be upgrading to a bigger place, relocating, selling for financial reasons or even due to births, deaths or marriages, so may or may not be in a hurry to move. The resale market is always worth considering for a number of reasons- you can SEE exactly what you are getting; it is unlikely to require too much work; the legal paperwork must be in order for it to sell; and you should not have to wait too long to move in once a purchase is agreed. Plus, there are currently some incredible offers available at prices which may never be repeated on the Spanish Coast!

Bank Repossession Properties
This has become a thriving market in itself, allowing both banks and buyers to benefit from the misfortune of a previous owner. This relatively new market is the by-product of the economic downturn, where hundreds of homeowners were no longer able to keep up with their mortgage repayments and their properties were eventually repossessed by the bank. Many of the properties involved were the product of a 100% mortgage granted during the property boom, although others lost sizeable investments due to spiraling unemployment levels. Do not be fooled into thinking that these must be the best deals available on the market, as Spanish banks are still as greedy as ever and are not interested in market research or being competitive, but only in recuperating the millions of euros which they have lost due to over-lending. They will often ask over the odds for a property which is in desperate need of some TLC and which you could buy cheaper from the resale or even key ready markets. Even new build properties can offer better value for money overall so make sure you weigh up all of the hidden costs and long term investment before you commit to anything! If you do wish to look at bank owned properties, then you should be prepared to look at a long list of homes in various locations, as there are likely to be a number that are not worth considering, before you come to one or two which might fit the bill. It is worth noting as well that if the bank that owns the property is offering a higher than normal loan to value (sales price) mortgage it is because the property value does not match up to other homes in the area, on the regular property market. By asking for a lower deposit from the buyer they can make the sale sound more attractive and benefit more themselves in the long run, when what you are actually getting is an over-priced property, which you could buy cheaper 100 yards down the road!
Essentially, there’s lots of things to consider, but the most important thing is to take your time, don’t be pushed into anything and explore all avenues before you sign on the dotted line!