Newly Built After Quarantine

How developers behave in the “new reality”: statistics, forecasts and interesting offers.

Since March we have been receiving many questions from clients about the progress of construction in Spain. Are works continuing? What is happening right now? Will prices for new builds change due to the pandemic?

Let us clarify — house construction in Spain has resumed. This happened almost immediately: most developers limited themselves to downtime from March 30 to April 12, after which the process continued under quarantine conditions under police supervision and until 15:00. After some time, the time restriction was lifted. Since the beginning of the pandemic, the largest local developers (Aedas Homes, Metrovacesa, Via Celere and others) agreed to support their clients and changed the payment schedule. This is an opportunity for those who lost their jobs during the pandemic or demonstrated a significant drop in income.

Real estate agents returned to work

As of April 25, the Spanish government lifted restrictions on renovation work in residential premises. And in June, agents returned to work in regions that moved to the “first phase” (that is, almost all) of quarantine. They are allowed to receive clients in the office — no more than one at a time (by appointment) — and take them to view properties in non-residential premises, so houses under construction are now available for visits. And for those who cannot yet plan a viewing, developers organize online 3D tours.

This is especially convenient for overseas property, since now only holders of European residence permits or citizenship can enter Spain. In addition, developers are ready to reserve a selected property for just 500 euros. The reservation can be cancelled without losing this amount within 30 days. This is what one of the developers in the new Alicante district — Playa San Juan Pau 5 — does.

Marina D’or resort town

A similar offer is available from a developer in Valencia province, in the resort town of Marina D’or, with two large residential complexes on the seafront. You can choose an apartment and reserve it for 3,000 euros. When you come to Spain for a viewing, you can either keep the previously chosen option, or change it to another apartment in the same complex, or get your money back. In addition, the developer will pay for your three-day stay at a comfortable spa hotel in Marina D’or.

The biggest discounts are offered by developers who are just starting construction. For example, a developer in Malaga provides a 20% discount to the first 20 buyers.

Some buyers, in conditions of falling demand and the new “post-quarantine” reality, expect discounts on new builds directly from developers. But one should not expect many advantageous offers. On June 9, the Royal Decree “On combating the consequences of the COVID-19 epidemic in the workplace” came into force. In connection with this, the use of antiseptics, masks and gloves, as well as observing social distance and other rules are now mandatory at construction sites. As a result, according to experts, work has slowed down. Experts forecast labor cost growth in 2020 by 7%, and prices for new villas and apartments in Spain will rise by 2.5%.

Update. In June 2020, prices for new builds in Spain reached a decade peak, despite the ongoing COVID-19 pandemic. According to Idealista citing the Society of Appraisers, the cost of new property in Spain at the end of June was 2,472 euros per 1 sq. m, which is the maximum price since 2010.

How is this possible? In these turbulent times, “investors have once again recognized residential real estate as a reliable haven for investments in conditions of an uncertain future,” according to industry specialists. Parents in Spain buy homes for their children so they feel safe.

Nevertheless, some developers still offer buyers certain bonuses during this difficult time. Most often it is either a monetary discount, or free furniture, air conditioning or a parking space.

Reality after quarantine

If you were planning to buy new build property in Spain, now is the ideal time. Developers still offer post-quarantine discounts, and prices remain at the same level for now. They will likely start rising by the beginning of autumn 2020. By the way, buying new housing in Spain is a safe process, since the buyer’s money is held in an escrow account.