Why resale houses in prime locations are outpricing new builds in Spain
A recent study of the Title Registrars’ statistics showed that in two communities of Spain resale houses were selling at higher prices than new ones. This appears illogical but study of the figures gives reasons for it.
One of the principal causes is that many new house sales have been bought ‘off plan’, maybe a year or even two years before and therefore those are not current market prices. In addition, many new properties are built in secondary locations as all the prime locations have been taken up with developments in the last 20 or 30 years of housing boom in Spain. Those prime locations are the most sought after, with all the established facilities nearby, and therefore people will pay more for them.
There’s usually a very good reason for the value of a property, with location, facilities, specification and even neighbours being important influencers in buyers’ decisions. For new development, the price is often due to the strength of marketing and availability of already arranged finance, which together can swing a buyer’s decision. They’d be prudent to bear in mind that all the ‘snagging’ of inevitable defects has already been done in the resale properties.
Immediate availability is also very important as people will pay more to get a house that they can move into in time for the summer instead of waiting for a year or two to obtain their ‘dream home’. Nervousness about future markets, whether values will go up or down can also encourage buying established properties. If a market collapses, it does so towards the centre, with outer properties normally being much more affected, but the central core remaining popular and sought after by the few buyers that there always are no matter the economic woes of the world. There is also concern as to unforeseen important worldwide economic changes, such as COVID, the Ukrainian and Palestinian wars, or even Brexit, which have not been universally predicted but can change financial decisions in an instant.
