Are you considering buying a new production home in Spain or Portugal? Are you debating on whether it would be a good idea or not? Perhaps you’re trying to figure out when it would be the the best time to buy a brand new home. Some of you might wonder how the pandemic is affecting the new production market and what to expect when buying a new home. We have taken a closer look on the matter and we also had the pleasure to get some direct answers from an expert.
How is the pandemic and post lock-down affecting the new production in Spain?
We took this question to one of the experts in the field, Viktor Ruben Wandemar, Managing Partner at the real estate investment and advisory firm Bosque & Colina AB, to get some insight.
“Construction sites got back to work quite fast after the lock-down after only being shut down for a few weeks. As for ongoing constructions, the effects were close to none. Although, it is still early to say, we believe that it’s likely that the production will see a decrease during 2020 and that’s mainly because the banks have been occupied handling crisis loan applications. Most banks have set a hold on new construction loans which in turn prevent the new projects of getting off the ground as planned”, Viktor Ruben Wandemar explains to MiMove.
Advantages of buying new production
Moving into a home that nobody else has lived in before you is a special feeling. You are the first to use the appliances, the first to sleep in the bedroom and the first to take a bubble bath in the brand new hot tub.
There are quite a few advantages with buying a new production.
“Many homebuyers have a clear picture in mind of how they want their new home to feel and look like. Of course, this is not true for all new developments but when you buy from us, you get plenty of options to personalize your home by choosing materials, light installations, carpentry and when possible also different floor plan options”, Viktor Ruben Wandemar says.
“If you want the same personalization when buying a home which isn’t a new production”, he continues, “the process is both longer and less secure as you need to hire a third-party refurbishment firm to get the home in the standard that you want after you’ve bought it. And of course, another good reason to buy a new production home is that it comes with different warranties both from the developer and the builders; such as installations, structures, façade, roof etc.”, Viktor Ruben Wandemar concludes.
A few other advantages of buying a brand new home are:
- The price stays the same during the development. There is no bidding or price fluctuation while the property is being built. You’ll be safe to pay the price that has been agreed upon.
- It’s a great investment for the future. One of the few things in this world that gets an increased value over time is property. The day you decide to move from it you can be quite certain to make a profit.
- It takes some time to finish. Usually the new constructions get sold long before they are finished. This means you might have to wait for months and sometimes longer than a year to get access. This could also be a disadvantage depending on how eager you are to move in. Although, it gives you time to save up money and plan your move ahead of time.
- Safer assurance of a problem free home. If you buy an older construction and afterwards realize there is something wrong with it, like mold or leaking problems, it becomes your issue to solve. New constructions on the other hand come with certain warranties and guarantees over a given period, usually years to come.
What warranties do you normally offer for a new home at Bosque Colina AB?
“We offer the basic “Seguro Decenal” here in Spain, this guarantee covers serious structural faults that affect construction elements such as the foundations or retaining walls, for the first 10 years after building completion. In addition to that we also use the best insurance companies to offer more coverage.
Usually, that includes warranties on all the installations throughout the building and apartments, the façade, and the roof of the building. Some of them cover up to ten years and others up to three years. In addition to that, we also offer free corrections of minor problems that the buyers might discover during the first period when they start using their new homes”, Viktor Ruben Wandemar explains.
Some of the fundamental aspects that you need to know of when buying a new production are the terms and guarantees to avoid any surprises. Make sure that the agreed conditions of the plan are met such as structures, quality report, delivery and deadlines.
Additionally, you might want to ask for any incident reports, possible modifications, instructions on maintenance of the property and other things that the developer should hand to you. Remember to keep the documentations for all the details of your new home and make sure you fully understand the agreement.
The best time to buy is during spring and fall
The spring, coinciding with the arrival of good weather, it is the best time to buy a new construction home and the period of the year in which the most operations take place.
After the summer, the buying activity resumes until marking the peak of sales in the last quarter of the year, with the exception of around Christmas when transactions decrease.
With that in mind, Real estate agencies launch promotional campaigns in the months of March, July and October to boost the sales. Even in the middle of summer sales campaigns are carried out with the aim of promoting home sales in that period.
Regardless, sometimes you have to mix strategy with your personal luck and timing to close a good deal. Sometimes, the weaker months of sales can become your best friend – with much less demand, it’s easier for you to find an owner who’s eager to sell and to get a better price.
It also depends on the current market
Naturally, the market isn’t a hundred percent predictable and the situation often varies from city to city and regionally. The best time to buy property in Barcelona or Madrid doesn’t reflect the situation on the south coast for example.
What’s important in a home for the new production buyers?
“In Málaga, there is no doubt about what buyers prioritize the most which are in order: private rooftop terrace, terrace and private patio. The private rooftop terrace in Málaga is not easy to come by as the legislation in many cases makes it illegal to build them on the old protected buildings in the historic centre.
They sell quickly and the prices are normally quite high. For example, we recently took a reservation from a French buyer on a penthouse apartment with two small private terraces on the upper level. The apartment has a total useful area of 96 m2 and the sale price was €795 000”, Viktor Ruben Wandemar tells us.
In which countries and areas does Bosque & Colina AB predominantly operate?
“Bosque & Colina came about in 2017 as a “spin-off” of the Swedish company Wood & Hill that has invested in and developed close to a thousand homes in Sweden during the past few years. When we started Bosque & Colina AB we copied many of the recipes for success that Wood & Hill successfully had developed and applied.
Wood & Hill operates in all of Sweden whereas Bosque & Colina operates on Costa del Sol with Málaga as our main market so far. Early on we specialized on the small but growing market of central Málaga.
We currently have 15 homes that are either in production or going into production shortly, all located in the historic centre of Málaga. Besides that, we are currently evaluating several different new investment opportunities that might lead to many new projects in the year ahead”, Viktor Ruben Wandemar explains, excited for the future projects and expansion.
New vacation homes and shared economy
Viktor Ruben Wandemar tells us a bit more about the upcoming plans for the real estate investment and advisory company:
“Bosque & Colina AB will soon be launching a new concept that will offer a fresh take on the purchase of a vacation home based on the principle of sharing economy. We will make it possible for people to own luxury apartments and villas in prime locations at a fraction of the price.
At this moment we are only offering this product to Swedish buyers. For your Swedish audience that’s reading this are welcome to visit bosqcol.se for more information. English speakers that want to know more about us as a company and our investments and developments can get more info by visiting bosqcol.com.”