Pre-Construction Investments

The search for a secure investment, that will provide a reasonable return, is becoming difficult after the downturn in financial markets over the last two years.

One area that has proved to be very profitable, is investing in property at the planning stage, either before or during construction.

By reserving a property on a new development, before it has been constructed, the purchase price is extremely competitive. In addition there are usually staged payments amounting to about 25% of the purchase price prior to completion. As the balance is due on completion, this can be financed by a mortgage, if required.

If you are planning to resell prior to completion, then no capital taxes will be due on the purchase, making it a very affordable investment. However, you should be aware that the Buy-Sell, market can in some cases become saturated in the time running up to completion. As with any investment, care should be taken in choosing the right area and independent advice ought to be considered.

A number of factors influence the increase in value of the property during the construction phase:
• Inflation. Property prices in Spain have increased well above the retail price index, showing a rise between 25%-35% or more, over the last year.
• Best units. If the best units, for example penthouse/sea view/corner site etc. are bought they command a premium price over adjacent properties.
• Progress during construction. When a show flat becomes available to view the project becomes more attractive and prices continue to rise.
• Completion. On completion, your new apartment with gardens and swimming pool, add further to the value.

You can search for new construction properties, using Casa Quests unique property search.