Newly Built Property in Spain after COVID19-Quarantine: prices are going up or down?

How developers behave in the conditions of the “new reality”: statistics, forecasts, and interesting proposals.
Sincе Mаrch, we have been receiving many questions from clients about the construction process in Spain. Is the work taking place? What is going on right now? Will the price of new buildings change due to the pandemic?

Let us point it out – the construction of houses in Spain has resumed. It happened almost immediately: most developers have limited their work to downtime in the period from March 30th to April 12th, after which the process continued in quarantine under the supervision of the police and until 3 P.M. After a while, the time limit was abolished. With the beginning of the pandemic, the largest local developers (Aedas Homes, Metrovacesa, Via Celere, etc.) agreed to support their customers and changed the payment schedule. This is an opportunity for those who are unemployed during the pandemic or have demonstrated a significant drop in revenue.
Real estate agents returned to work in the regions that had moved to the "first phase"
Real estate agents returned to work in the regions that had moved to the "first phase"
As of April 25th, the Government of Spain lifted the restrictions on residential repair works. And in June, agents returned to work in the regions that had moved to the "first phase" (that is, almost all) of quarantine. They are allowed to see clients in the office of no more than one at a time (by appointment) and take them to viewings of facilities in non-residential premises, so that the houses under construction are now available for visitors. And for those who cannot yet plan viewings, developers arrange online 3D tours.

It is especially handy for foreign real estate, because now only those with a European residence permit or citizenship can get to Spain. Also, developers are ready to reserve a chosen property for as little as €500. You can cancel your booking without losing this money within 30 days. So does one of the developers in the new area of Alicante – Playa San Juan Pau 5 (use the link to view the offer).
Resort town of Marina D'or
Resort town of Marina D'or
A similar offer has a developer in the province of Valencia, in the resort town of Marina D'or, with two large residential complexes located on the seafront. You can choose an apartment and reserve it for € 3000. When you come to Spain for viewings it is possible to either leave what was chosen earlier, change to another apartment in the same complex, or return your money. Besides, the developer will cover your three days stay in a comfortable spa hotel in Marina D'or.

The most significant discounts are offered by developers who have just started the construction. For example, the developer in Malaga offers a 20% discount to the first 20 buyers.

Some customers in circumstances of falling demand and the new "post quarantine" reality expect discounts on new buildings directly from developers. But one should not expect many bargain offers. On June 9th came into force the Royal Decree "On combating the effects of the epidemic COVID-19 in the workplace." Because of this, the use of antiseptics, masks and gloves, as well as the preservation of social distance and other rules are now mandatory on construction sites. As a result, according to experts, work has slowed down. Experts predict the cost of labour in 2020 to increase by 7%, and the price of new villas and apartments in Spain will grow up by 2.5%.

[Update]. In June 2020, price of new Spanish property reached its peak of the decade, despite the ongoing COVID-19 pandemic. According to Idealista with reference to the Society of Appraisers, the cost of new real estate in Spain at the end of June was €2,472 per 1 m², which is the highest price since 2010.

How is this even possible? During these turbulent times, "investors have again recognized the residential property as a haven for their investments in the face of an uncertain future," said Juan Fernández-Aceituno, CEO of the Society of Appraisers in Spain. The specialist also adds that in 2020 many transactions are made not with a mortgage, but with savings. Parents in Spain buy homes for their children so that they can feel safe nowadays.

However, some developers still offer some benefits to buyers during these troubled times: a list of such offers can be found via the link. Most often it is either a cash discount or free furniture, air conditioning or a parking spacе.
Post quarantine reality
If you were planning to buy a newly constructed property in Spain, now is a perfect time to do it. Developers still offer post quarantine discounts, and prices are still the same as before. They will likely start to rise by the beginning of autumn 2020. By the way, buying a new home in Spain is a safe process, because the buyer's money is in an escrow account.
Thanks for reading! If you are interested in Spanish real estate, please, open our catalogue and choose an appropriate property. Take care of yourself and subscribe to the Virtoproprety social media to see future articles!