Why New Developments are back in fashion!
For the last year or two, buying new developments in Tenerife has been going gradually out of fashion, but now things are suddenly changing. In fact, so many people have been enquiring about new developments this Autumn that we decided to look into the reasons for this popular change of heart.
The recession put many people off buying new developments in construction. This didn’t just affect Tenerife, but it was the same the world over. Official sales figures did not reflect the change because it can be a couple of years before the reservation of a property in construction registers as an official sale, when the building is complete.
Probably the biggest worry buyers have had is confidence in developers. Buyers worried that a project in construction may never complete because the developer might not survive the recession. Some of the biggest names have gone into receivership very publicly and buyers have been left high and dry.
The second reason buyers have shied away from new development is uncertainty about market prices. When you reserve a property in construction, you are committing to buying that property at a set price some time in the future when the building is finished. No problem when prices are rising
because you know you will be buying at a good price, but if prices are going down you may be committing yourself to buying some expensive real estate.
So what has changed? Why the sudden interest in new developments again?
Well, the most obvious difference is that most new developments have now completed. You are no longer buying off plan, but you are buying a finished property. That means that there is no risk of the project not being completed.
Buying a completed new property also solves the problem of predicting market prices. Now that the dust has settled on the Tenerife property market and it is beginning its gradual rise from the bottom last May, buyers can see that prices compare very well to resale properties.
In fact, not only do prices compare well, but developers are offering some fantastic sweeteners to encourage buyers, such as paying your mortgage for two years. Offers like this are leftover from when the market bottomed out and are unlikely to still be available in a few months, so taking the opportunity now is a no-brainer!
And then there are the reasons why people bought new developments in the first place. You can choose the position of your unit, it is in perfect condition (and covered by insurance for any defects) and of course there is a thrill in owning a brand new property. In fact it is quite a natural human instinct to move into a new home.
So buying a new property now has all the advantages that it always did, plus some powerful new reasons to do so. If you are considering buying a property in Tenerife, take a close look at Tenerife’s new homes and weigh up the advantages. You might find yourself becoming fashionable!
