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A BIG LESSON to be learnt: why not to buy off plan in Spain

The Association of Property Developers in Madrid (asociación de promotores inmobiliarios de madrid – Asprima) recently informed us that about one fifth of 500,000 houses that need to be built up into new developments still remain as just plans; in many cases, the building work has not even begun, according to the portal idealista.com. Nearly 234 urban sectors in Madrid are affected by leaving more than 50 councils with  ‘ghost’ boroughs.

Developments in the areas of Valdebebas, Montecarmelo, Arroyo del Fresno and Cañaveral are still not going forward which means that the home buyers are still waiting for the development to be started in some cases.

The worst scenario is for the home buyers in Berrocales or los Ahijones; some of which have waited for 14 years to get the key to their new apartments, according to idealista.com.

CONCLUSIONS

1)      Our perspective is that, to buy off plan not only could become an additional risk for home buyers and investors but will also not help to ease the current oversupply in Spain.

2)      The current post highlights the problem of buying off plan in Madrid, the main city, which has the highest concentration of population and property demand. In secondary cities and also on the coast, the risk should be higher.

3)     There is enough stock in the market in order to buy what you need… do your research and go for it.

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