New developments and off-plan properties – Guide
New developments on Costa del Sol covers mainly large or small apartment complexes and small villa complexes. It can be in the project phase, under construction or recently finished. Off-plan villas is a single or more villas. Southern Spain is in a very positive phase with increasing tourism and property prices for both 2017 and 2019. As a result there is many new developments on Costa del Sol, and a lot to keep track of. As property buyer, this is a luxurious situation, where there is plenty of different new developments to choose from. Naturally, there is also a great variety of off-plan villas for sale, tailor made to you. Although the process of buying an off-plan villa or a an apartment in a new development are similar, there are some important differences.
The project phase
The first step, and its here where either an individual, company, developer or group frames the project. Often there will be a land owner, an architect, a builder, and sometimes a commercial agent. All roles can be within the same entity, which is often seen with smaller projects. There is endless possibilities of how to structure the inner workings of a villa project or a new development. As a result, it is important that is is clear who have responsibility for what.
A bank or an investor is normally involved in the financial management of a property project. Some projects will have sufficient funding, enabling the project to go ahead irrespectively of sales. However, for the majority of new developments and off-plan properties, sales are need to start the project. For individual villas, construction often begins when there is a buyer at hand. Around 50% of villa projects will begin construction irrespectively of a buyer. Larger new developments of apartments and townhouses often rely on bank finance. The typical setup will be the developer providing some amount of guarantee, and the plot. The bank will then finance the project, when 50% of the available apartments have been sold. In this type of financing, the bank don’t risk financing a project which can not sell.
Finding a buyer
You will often come across a new project through one of the many property agents on Costa del Sol. All developers normally work with a selection of the agencies, allowing them to promote their project. Most developers also allow clients to come directly to them, without going through an agency. A tactic which is beneficial for the developer, as they save money, but not beneficial for you as the buyer. The reason being, the developer is always protecting their own interests, where an agency will protect your interests. Furthermore, the final price will be identical as the money the developer saves, does not materialise for you as the buyer. In general, new developments and off-plan villas are very little negotiable and often only in respect to extras.
Payment and timeframe
A big advantage in investing in a project, or something under construction is the flexible payment terms. The norm for both small and big projects allows the payments to follow the construction. For new developments the reservation fee is often 6-10.000 €, but it can be higher for luxurious projects. With the reservation agreement in place, your lawyer will do a due diligence, and go through the PPC contract. PPC stand for Private Purchase Contract, and contains all stipulations regarding your purchase of the property. The PPC is signed within 30 days, and include further payment, between 10-30% of the purchase price. The remaining balance is either paid in monthly rates, according to milestones or at completion. A villa takes around 12 months to build. An apartment complex takes 18-24 months to complete.
Delivery & completion
With construction complete, the new property need several licenses before it is yours. The developer needs to officially declare the construction complete with a “final de obra” license . In order to do this, the developer needs to provide various technical documentation, including an insurance certificate. Any new construction in Spain comes with a 10 year guarantee against construction errors. The second necessary license is the “first occupational license” (license de primera occupation). This license confirms the property follows national and EU regulation, and is suitable to live in. Furthermore square meters and technical installations are inspected. With the two licenses in place, next step is signing of the deed at the notary and you become the owner.
Guarantees & risk of buying new development or off-plan
New property projects in Costa del Sol is a safe and relatively risk free experience. New projects fully stick to modern European standards when is comes to consumer safety. Client payments always goes directly to an escrow account, or is tied to a bank guarantee. The PPC contracts are also very elaborate and seek to eliminate any uncertainties. The banks lost greatly on opportunistic property development back in the early 2000’s. As a result, they are only backing realistic and sound projects, and enforcing client guarantees. Over the last 10 years there has not been any property projects which have led the client to loose their investment.
Advantages in buying new development or off-plan
Buying an apartment or villa off-plan, or during the initial phases have many advantages. The most prominent advantage is the lower price, in comparison to a key-ready property. The value of a property is higher as a completed product as many property buyers are looking for a key-ready property. Furthermore the market most years sees a general increase in prices, on average2-3% per year. Finally, the developers of new developments often raise the price with each phase being released, on average 3-7%. All together the increase in property value makes it very attractive to purchase a property off-plan. From experience it is safe to say that the average price increase for villas for sale is between 15-25%.
For apartments in new developments, we see similar increases of 15-35%. Another result of being among the first buyers, is the ability to choose the best location and views. Penthouses in new developments sells fast, as a result of the high demand. The financing aspect as described above, also make the purchase more attractive with very flexible payments. With correct guidance and advice, our clients never regret their off-plan investment.
New developments in Estepona
Estepona is a developing city, with a high amount of new developments underway. The new construction is mainly apartment complexes, located throughout the city centre and surrounding area. In the city centre it is mostly economic apartments for sale, in the price range from 150-500.000 €. East of Estepona there are several new luxury developments under construction, from 500.000-2.500.000 €. North of the city centre there is a wide variety of apartments for sale with prices from 150.000-4.000.000 €. Estepona does not have any problems with the urban planning. The municipality of Estepona stretches from Casares all the way to San Pedro de Alcantara. Current ongoing new developments are:
Luxury beachfront apartments East of Estepona Port. The Edge is recognized by a spectacular design, inspired by modern superyachts. Swooping lines, and natural materials are used throughout these apartments for sale. The blocks are distributed in a spiral shape, maximising the sea view for each apartment for sale. The Edge launched in 2016 and will be key-ready in end of 2019. Initial prices were starting at 400.000 €, and the most expensive penthouses would top at 2.000.000 €. The Edge is a great success, and is offering a very unique product. There is still apartments to buy in The Edge
Luxury townhouses in a fantastic beachfront location. A few minutes to the port of Estepona, and directly out to a wide sandy beach. The Island townhouses are are 3 or 4 bedroom, designed with a modern yet warm architecture. Each house is from 150-250 m2 and have a small garden and some also benefits from sea views. The Island launched in 2017 and expected to complete as key-ready in 2019.
Emare is a small luxury development north of the city, on The New Golden Mile. Just 16 beachfront apartments, with incredible sea views makes up Emare. The apartments for sale are 3-5 bedrooms, and minimum 120 m². Attention to details and quality of the materials is at its highest level. The owners of the apartments in Emare will be able to enjoy communal pool and Spa, gym and a unique frontline beach location. Emare launched in 2018 and will be key-ready in late 2019.
Las Olas is a small and boutique development located a few minutes east of Estepona city. Designed in a contemporary style and with white and beige surfaces, Las Olas fits perfect into its surroundings. Only 54 apartments makes up this new development which boast fantastic views, spacious rooms and open plan kitchen. The prices range from 250.000-400.000 €, and the apartments are selling fast. Launched in the beginning of 2018, Las Olas is ready for its new owners late 2019.
Mirador de Estepona Golf
An exclusive and modern development, very close to the golf course of Estepona Golf. The apartments and penthouses for sale benefit from panoramic views to both golf and sea. Coming from a renowned developer, qualities are outstanding and materials carefully selected. Majority of the apartments for sale enjoy large terraces, and a South-West orientation maximising the amount of sun. The owners in Mirador de Estepona Golf can enjoy the large pool and separate children’s pool in between soaking up the sun. The apartments in this new development offers both covered and underground parking. Launched in 2018 Mirador de Estepona Golf is ready for its new house owners in 2020.
The View Estepona
The view is a small enclave of luxury villas with incredible panoramic views, to mountains and the ocean. Located at the top of a small mountain ridge, privacy is in top and yet only a few minutes down to the coast. The villas in this new development offer 3 or 4 bedrooms, and large plots of around 1.000 m². This new villa project is being built in the hills of Selwo, just above Selwo Safari park. High quality materials, open-plan kitchens and modern architecture is one of the reasons for the success of this new development. Launched in 2019 the villas for sale in The View are ready for its new owners in late 2020.
New development in Marbella
In 2018 the city of Marbella have given building license to many new developments, after many years with standstill. As a result of the heavy development of Marbella in the last decades, there is limited good plots left with space for new developments. Those under construction are very attractive, and prices are often in the higher bracket. Below is the top 5 of the most popular new developments in Marbella, currently under construction.
La Meridiana Suites
La Meridiana Suites is a selection of luxury apartment in a gated community on The Golden Mile. The apartments in this new development are very spacious and fitted with luxury materials and solutions throughout. The urbanisation of La Meridiana suites offer both Spa, gym and concierge service and naturally 24-hour security. The apartments are available with 2-4 bedrooms, and the penthouse apartments with private rooftop plunge pool. This new development is located in close distance to the famous hotel of Puente Romano and The Golden Mile. Launched in 2018 La Meridiana Suites is ready for its new owners late 2019.
In the hills of Nueva Andalucia, the new development Nine Lions is under construction. Very large apartments from 2-5 bedrooms, including 250 m² penthouses with incredible panoramic views. distributed over 9 blocks, each apartments is very private and with generous terrace space. The materials in Nine Lions are of a high quality throughout, and the distribution is modern and spacious. A great option to purchase a new apartment in an attractive area. Launched in 2018, this new developments is ready for its owners during 2019.
In the mountains just above Marbella, the luxurious new development of Palo Alto is under construction. Modern and light architecture, combined with lush surroundings have made this new development an instant success. Panoramic views to both mountains and the sea, and across Marbella is something most apartments will enjoy. Palo Alto offers a wide range of apartments, from 70m², 2 bedroom apartments to 5 bedroom penthouses, covering more than 250m². Prices begin around 400.000 €, and construction began in 2018, and the first apartments are ready during 2020.