30 Jan 2020

The Current year is suitable for buying a new property due to the to the stabilization of the real estate market and the mortgage conditions


The real estate market has seen how since the end of the crisis housing prices have increased, especially in large cities.

During the last years, the constructions in new buildings, especially in big cities, have proliferated again.

According to the report 'InmoCoyuntura' made by the Institute of Real Estate Analysis of the Euroval Appraiser, the average price of the square meter in our country has increased by 12.9% (from 1,459 to 1,647 euros) in the period between 2014 and 2019.

This growth has occurred in a very unequal way, since during these five years only seven provinces have registered increases above the national average: Madrid (32.2%), Barcelona (30%), Malaga (24.1% ), Balearic Islands (23.9%), Las Palmas (22.1%), Santa Cruz de Tenerife (18.6%) and Melilla (15.4%).

Some tips to keep in mind:

• There is not better time that today to search for a new property. 

With the arrival of 2020, the option to buy a new apartment becomes more attractive than ever. Among other reasons, because the price escalation has slowed or stopped for the first time in recent years. Moreover, in some areas the price of housing has even dropped.

According to TINSA data pertaining to the fourth quarter of 2019, the average price of new and used housing grew by 2.6% year-on-year to 1,373 Euros / m2. This is the slowest pace of the last three years, and represents an average variation of 3.6% in the whole of 2019.

This deceleration or stabilization of the market, which does not preamble a new real estate crisis - as many agents in the sector clarify at all times - has become apparent in other Spanish cities.

Another factor  is the current mortgage offer, which offers loans with attractive interest rates for buyers.

Conditions that should be maintained or even improved in the coming months, if we consider that the loan firm has also slowed since the arrival of the new Mortgage Law.

New property means a future investment

A property is an investment for many years, so study your present and future plans well, both personally (if you plan to have family or expand it…) and professional (possible changes in your work area, promotions…

Do not think about the type of property you want or it is good for you to have today, but what you will need in a few years: a flirty studio can be useless in a short time if you want to create a family.

It is important, have a realistic budget and take into account several aspects:

- Banks will only grant you a mortgage for 80% of the appraised value of the home.

- The purchase costs represent another additional 10/15%, so you should have saved around 30-35% of the price of the property.

- Review additional post-purchase expenses: moving, furniture purchase, community payment, taxes (IBI, etc.), fees, electricity bill, etc.

- To avoid possible problems of default, it is recommended that your monthly letters do not exceed 30/35% of your income (as long as you do not have another high letter, for example, that of a car).

Buying a flat not only means finding the best home, but also the best mortgage. Do not settle for the loan offered by your usual bank and compare offers. Choose the loan that best suits your economic situation, but don't make another common mistake: extend the mortgage longer than necessary. Interest, and therefore the total cost of the property, will increase more than necessary.

.  Choose a location appropriate to your needs

Again, choose a neighborhood according to your present and future needs.

It also values the proximity of other services (medical centers, department stores, etc.). If you are planning to choose a new area, find out about future development plans. On the other hand, if you are in the

Future development plans. On the other hand, if you are in the suburbs, check how much time you will need to get to your job.

What size do you need in your new flat?

According to numerous studies, most housing changes are motivated by the need for more space. It is true that the number of square meters and rooms completely determines the price of the property, but you should also think that in the 20 or 30 years that you will enjoy that apartment, it is normal that you end up needing more space for your family.

Generally, the houses should have one to three rooms and an approximate area between 45 and 100 m2. However, once again it will depend on your personal circumstances. Mind you, beware of unnecessary excesses. A floor that is too large will not only be more expensive when buying it, but also to maintain it: electricity, heating, community payment, etc.

Now that you know the mistakes you should avoid, the next question is: which is better, a new or second-hand apartment? Despite the fact that used properties concentrate most of the sale and purchase operations in Spain (80.2% versus 19.8%, according to the latest INE data), new construction offers many advantages that you should consider carefully before taking a decision. These are aspects of different kinds that give an important added value to housing.

It is one of its main attractions: you enter to live in a completely new, pristine home that has not been occupied by anyone until that moment. A house that also usually includes a series of 'extras' that do not usually have the second-hand: more current designs and distributions, better materials, quality finishes, greater technological equipment, facilities (electrical, water, gas, etc.) in perfect condition, longer life.

Also, if you buy it on plan, many promoters will offer you the possibility to personalize your house by choosing different finishes, floors, paintings, sanitary. Another important added value, since no home in your building will be the same as yours.

The law requires that all new construction promotions are guaranteed for one year against finishing failures, three against defects in construction elements and facilities that make habitability difficult and ten against structural failures.

An important detail: these guarantees come into force at the time the work is delivered, not when the home is purchased. Keep this in mind if you buy a property that has been built some time ago.

Energy efficiency is another of the strengths of new floors, something that many times do not guarantee the second-hand.

The use of more advanced materials allows to increase the comfort and insulation (thermal and acoustic) of the house, in addition to reducing energy expenditure on heating, etc. every month. In case you do not know, a property with the label 'A' is capable of offering energy savings of up to 95% compared to another with the letter 'G'.

Acquiring a new construction floor often means becoming a neighbor of modern developments equipped with unimaginable common areas a few years ago: swimming pools, gardens, sports courts, gyms, social rooms, games room and even in the case of the most luxurious promotions , to movie theater or heated pool.

Spaces that, in addition to promoting social life with other neighbors, will allow you to take more advantage of your free time and even save money: according to a study by Vía Célere, living in an urbanization equipped with premium common areas can mean annual savings between 7,000 and 10,000 euros for a family consisting of two adults and two children.

 

Source of information: The Economist.