Real Estate Developments

Real Estate – Developmets in Andalucia

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A developer is basically a company that purchases a plot (or plots) of land with the intention of building new properties on it. Historically in Spain, the vast majority of developers build apartments or townhouses, with the intention of selling each individual unit mostly to foreigners. It is generally cheaper for the developer to build these kinds of properties ‘back to back’ rather than the more expensive detached villas, which usually take longer to sell.

Over the last fifteen years or so, the demand for property in Spain’s coastal regions (especially the Costa del Sol and Costa Blanca) has been enormous, leading to developers able to sell property ‘off-plan’. In other words, the developer takes a deposit from a purchaser as a down payment on a property which hasn’t even been built yet. This attracted investors, who realised that by the time the property was completed (say 18 months) the value would have increased to such an extent, that vast profits could be made, as the initial deposit price would have been fixed. Inevitably in a slowing market, this has led to an oversupply of apartments, as too many developers (and investors) looked to cash in on the boom.

Normally, developers are required to provide some kind of infrastructure in and around the development, such as roads, sewage, green areas, and communal lighting. Many developers also provide some kind of security provision – usually in the form of a 24 hour security guard within a gatehouse.

These days, developers in Spain no longer have the free reign of times gone by, when some were found guilty of accepting unauthorised payments from Town Hall officials in exchange for permission to build on ‘green belt’ land. This is partly due to better regulation, but also due to the slowdown in the property market, leading to fewer building applications.

However, as well as ‘bad’ developers, there are also ‘good’ ones who have produced some excellent urbanisations. A good yardstick before you buy, is to ask to view previous urbanisations built by the same developer – it may give you an idea of the general standard of their work.