Off-plan property sales at the the SIMA autumn property fair in Madrid last weekend show the business roaring back to life. Of the more than 10,000 properties for sale at the show, some 9,000 were for sale off plan. This figure is higher than 2016, when 75% of the 6,500 properties available were off plan.
These figures clearly show a home-building sector in recovery, though still a long way from the activity reached in the years before the crash. “The significant increase in off-plan property supply shows the gradual normalisation of the property market, the recovery of activity within the sector, and that stock accumulated before the boom years is running out,” says Eloy Bohúa, manager of SIMA Autumn. He adds that “supply [from the boom years] is still available, but it isn’t what the new buyers are looking for”.
Buyers of newly built homes today are more demanding, and have more requirements, which was unthinkable during the last property boom, when buyers were given the option of take it or leave it.
“The properties available at shows over the last two years are practically identical. But if we compare them to those available during the boom years, they’ve changed in terms of energy efficiency, communal areas for adults and children, and building design, and most projects are now personalised. Whereas previously there was hardly any difference between projects, now there is,” explains Daniel Cuervo, secretary of the Spanish Developers Association (APCE).
“The increase in off-plan property supply is the result of recovery in the economy and property sector, improvements in mortgage loans, and interest from international investment funds who see Spain as a good option,” says Bohúa. He points out that, although sales and building licence approvals for new projects have gone up, they are still low by Spanish standards.
Madrid, new build hot-spot
Madrid, the area with least new-build supply, is playing a decisive role in the property market recovery. Over 60% of the properties on sale at the show are in the region, of Madrid and just under half of these are in the city of Madrid itself. “The biggest off-plan availability is in Madrid in new projects such as Valdebebas, El Cañaveral, Arroyofresno and Villaverde,” says Cuervo. “Outside the city centre, the districts of Rivas Vaciamadrid, Boadilla del Monte, Getafe and Pozuelo also have availability.”
According to SIMA data, the average budget for those visiting the property show ranges between €150,000 and €300,000. “Purchasing power has gone up,” says Bohúa. “In 2013, 37% of visitors had a budget €150,000. This year’s it’s gone down to 17%. And those who plan to spend more than €300,000 have gone up from 13% in 2013 to 24% this year.”