The stages of purchase, construction and completion one property in Spain

The stages of purchase, construction and completion one property in Spain

It is not so easy buying a property in Spain following the stages of purchase, construction and completion according to my experience of owning a property in 2002-2004, the period of the maximum volume of buying by foreign people properties in Spain and the top of the prices. It possible to determinate this time as Golden time for the building contractors who sold plots in the regions of urbanization. The banks have permitted considerable mortgages and charged the buyers with high commission for the services. The buyers have paid many taxes filling the Town Hall budgets. Then Spanish industries producing building materials, windows, doors, blinds, furniture and all for the interior and exterior of the properties, were working on full capacity.

We share our experience from two years following these three stages.

We were happy when we have finished with the choice of the plot with great location without we have had any idea for formalities, difficulties and costs following every stage. We have started 2002 with the contract covering purchase, construction and completion where only the buyer was subject of penalties for delay in the payment, the building contractor - not for the delay in construction and completion. It was following: negotiation of the bank mortgage conditions; medical examination important for the healthy insurance obligatory part to the mortgage, bringing considerable costs; Notary deeds and notary costs, we have received 5 Notary deeds: for the land, for the house, for first part of the mortgage, for second part of the mortgage and the last was for finishing the payment of the mortgage.

During the construction the house and the plot walls there were many formalities, it was necessary to visit the building contractor min 10 times for two years building, connected with traveling and hotels costs. We met English families in retirement who have rented a house during the construction their houses to be available for the control quality and required formalities. One of such visit it was for the buyers rights to make the choice for the things as: outside decoration of the house and the walls, the colors of the interior walls, tiles for the floor and the terrace, as well as the color of the kitchen furniture. Also it was possible to be made some changes on the parts of house construction in case it could be possible and against additional payment.

When the construction of the house had finished then started final completion: connections of the water and the electricity from switchboard of the street to the house, but the connection of dirty water to the street canalization was left as obligation and payment by the buyers something strange.

For conclusion there were a lot of hidden costs during the stages of purchase, construction and completion and they never can enter in our selling price.

The buyers of the resale properties are happy people released from all these formalities, difficulties and huge hidden costs, they have to visit layer, notary, bank and his new property.

In Quesada and surrounding towns it is easy to find layers, Notary, banks, all kind of taxes information is available in the offices of the layers and the Notary.

Krassimira Petkova owner of the property Villa for vacation in Quesada

Spanish housing market recovery continues

Spanish house prices increased 2.67% during the year to end-Q1 2017 (0.38% inflation-adjusted) to €1,385 per square metre (sq. m), the fifth consecutive quarter of y-o-y house price rises, according to TINSA. Quarter-on-quarter, house prices rose by 3.2% (4.1% inflation-adjusted) during the latest quarter.

Spain's housing market finally returned to growth in Q1 2016. Spanish house prices had fallen by a total of 41.9% (46.8% inflation-adjusted) from Q4 2007 to Q3 2015, based on figures from TINSA. There were 31 consecutive quarters of y-o-y declines:

  • In 2008, Spanish house prices fell 8.75% (-10.05% inflation-adjusted)
  • In 2009, house prices fell 6.57% (-7.23% inflation-adjusted)
  • In 2010, house prices fell 3.85% (-6.67% inflation-adjusted)
  • In 2011, house prices fell 8.17% (-10.28% inflation-adjusted)
  • In 2012, house prices fell 11.34% (-13.82% inflation-adjusted)
  • In 2013, house prices fell 9.19% (-9.44% inflation-adjusted)
  • In 2014, house prices fell 2.96% (-1.96% inflation-adjusted)
  • In 2015, house prices fell 1.71% (-1.71% inflation-adjusted)
  • In 2016, house prices increased slightly by 1.67% (0.1% inflation-adjusted)

Demand is now rising strongly. In 2016, the total number of home sales in Spain increased 14% to 457,689 units from the previous year, according to the InstitutoNacional de Estadistica (INE). This rise in transactions was mainly driven by foreigners buying homes on the coast and in cities like Barcelona and on the Costa del Sol, one of the country’s most popular areas with overseas purchasers. Most foreign homebuyers are Britons, French, Germans, Belgians, Italians and Swedes.

Foreclosures fell by 31.3% to 41,129 dwellings in 2016 from a year earlier, based on figures from the INE. Foreclosures dropped 33.6% for new dwellings and by 30.9% for existing dwellings.

The outlook for Spain’s housing market is now upbeat, with house sales expected to rise by between 10% and 15% to reach about 520,000 to 545,000 transactions this year, according to TINSA.

“We believe that a growing economy, low financing costs, good potential for rental returns and capital appreciation will continue to drive sales throughout 2017 and beyond,” said Lucas Fox International Properties. Nationwide house prices are also projected to increase by about 2% in 2017. More specifically, house prices are expected to rise by 7% in Barcelona and by 4% in Madrid, according to housing market analyst Borja Mateo.

The price recovery now taking place in Madrid, Barcelona, and certain tourist zones of the coast will extend to the suburbs and other parts of the country,” forecasts Beatriz Toribio of real estate portalFotocasa. In the first quarter of 2017, the economy advanced 0.8% from the previous quarter, the same as in the same period last year, making it as one of the fastest-growing economies in the European Union. On an annual basis, Spain’s GDP expanded by 3% in Q1 2017. The economy is expected to grow by 2.8% this year, after growth of 3.2% in 2015 and 2016, and 1.4% in 2014, and contractions of 1.7% in 2013, 2.6% in 2012 and 1% in 2011, according to the Bank of Spain.

Analysis of Spain Residential Property Market

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