October 22, 2005
Buying offplan in the new Med markets
I get asked this question a lot when I talk to people.
If Bulgaria and Turkey will follow a similar path to Spain and are due for huge, accelerated increases surely this means the time to buy is now then?
If we are talking about buying and selling before completion here then my answer is at the moment yes there is the possibility that you will make a good return, but take thereīs a difference that needs careful consideration. Your investment is only as good as the money you make from reselling it. I guarantee that the majority of agents in these countries (and particulalrly the ones that moved there from the Costa del Sol) will have more interest in continuing to sell new build rather than their investors resales.
In Spain the big agencies who specialised in exhibitions put the bulk of their sales promotion/effort into marketing new, new build projects onto new customers and spent little time focusing on reselling their investors properties for two reasons, 1 the commissions was a lot lower and 2 it was more complicated. Consequently they sold a lot of new build properties that in turn drove the construction boom.
Not all agents did this, there were smaller agents who focused on the resale side too, and there were plenty of ethical companies that were following a good buisness model and being quite successful. However, the niose that everyone was hearing during the 1997 to 2003 came from the promotion and marketing campaigns generated by several very large and wealthy companies.
The process of selling the investment is much, much harder process than buying and watching your capital apppreciation with a warm fuzzy feeling in your stomach. Now I am not saying people didnīt resell, there was a huge specualtion boom in Spain and a lot of people made a lot of money but on the other hand there were an awful lot more who didīt or who are stuck with a property they have been trying to resell for ages.
Sales may be going through the roof on new build and prices may be steadily climbing, but I would like to see the rates at which people are actually managing to resell their properties in Bulgaria and what they are actually getting in return. On the CDS the resale market, has only really got going in the last 2 half years.
It makes perfect sense!
Would you not prefer in a rapidly growing market to buy a new build with improved qualities than an older project nearby where you know all of the appartments are owned by investors?Category: The Costa del Sol Property Market.