You are interested in buying new developments in Ibiza but you are not really sure what to expect? We have compiled a full guide to buying off-plan property in Ibiza, starting with the pros and cons of buying off the plan. In the next 5 articles, we will provide you with all the ins and outs on this hot topic in today’s real estate market in Ibiza.
- Pros and Cons of Buying Off-Plan Property in Ibiza (below)
- Payment Plans & Costs to Consider when Buying Off-Plan Property in Ibiza
- How to Secure your Off-Plan Property in Ibiza? Reservation, Lawyers & Mortgage Offers
- 3-Step Guide to Buy Off-Plan Property in Ibiza
- Questions to ask when Buying Property Off the Plan
What does it mean to “Buy Off-Plan”?
Buying new developments is an increasingly popular practice in the world of home-buying. At its heart, it means purchasing a property in advance of it being built. It’s a very popular way of buying property in Ibiza, new homes are highly sought after and prices are steadily increasing, and it can be a profitable way for investors to buy property. Typical yields for buy-to-let property in Ibiza are 3-5% excluding the appreciation of the value over time. Property prices have more or less (depending on the location) doubled in the past 10 years! In 2019, 2020 & 2021 we have seen a period of consolidation in property prices after which we expect property prices to keep increasing in the next 5-10 years. In 2021 we have seen a real property boom and properties have been selling like hotcakes. This has created more scarcity on the market and fuelled by more wealth in Europe, we expect property prices to rise.
Pros and Cons of Buying Off-Plan Property in Ibiza
As with any method of house purchase, buying off-plan does have its pros and cons. We know you’ll want to make an informed decision, so we’ve summarised these for you below.
Pros to buying off-plan
- In some locations, property prices are increasing at an eye-watering rate, so you may find, by the time you’ve completed and moved in, your house is worth more than you paid for it.
- If you commit to purchasing a home in the early stages, some developers will let you make decisions on room layout and a property’s location in the development, as well as put your stamp on your new desires with a choice of fixtures and fittings, (although this may incur an extra cost.).
- You may have several property types to choose between on one development, increasing the chances of finding exactly what you want.
- In many cases, there are very attractive payment plans which are usually staggered according to the building process and by law in Spain all payments need to be backed up with a building guarantee.
- You’ll have the peace of mind that comes with a new-build warranty.
- Off-plan property purchases often involve a less complex buying process.
- Because you’re the first person to live in the property, there are no worries about previous owners covering up the not-so-nice parts of the home.
- If there are issues with the structure, you’ll have the legal right to sue the developer for the cost of repairs.
Cons to buying off-plan
- You’ll have to be patient, as there can be a long wait between agreeing on the purchase and your move-in date.
- Although they can’t be predicted, delays do happen, so your plans will need to be somewhat flexible.
- If you’re buying with a mortgage, you’ll need to keep an eye on the mortgage offer validity period, as this is often limited to six months. Delays may mean you have to reapply for your mortgage later in the process.
- If you are unable to complete the purchase, for any reason, the developer could take legal action.
One of the main advantages of buying new development property is the ability to spread payments over time. You secure a buying price in today’s market, but you will complete the purchase in 1-3 years. This is a very interesting fact knowing that the best time to buy property is always “some years ago”. In our next article, we will give you all insights on Payment Plans & Costs to Consider when Buying Off-Plan Property in Ibiza.