Buying Off-Plan

Introduction

Buying off-plan property - 'off the plans' (before it is built or completed) has increased exponentially over the last few years as clients see the benefits of picking a property being built rather than waiting for the resale market. As demand has soared, so have the options for off-plan. There is now a great choice waiting for you. However, before you start heading down this route, off-plan has several advantages and disadvantages. Here’s a breakdown:

Advantages

Potential Price Savings - Developers often offer properties at a lower price during the early stages of development. The more you see the more you pay! Buying off-plan can mean purchasing the property at today’s prices, which could be significantly lower than the market price upon completion.

Customisation Options - Early buyers may have the opportunity to choose the exact position of the unit - orientation, floor, views etc. and the finishings, layouts, and other design elements. This allows for personalisation that isn’t typically available with completed properties.

Time for Financial Planning - With a longer time frame before completion, buyers have more time to organise their finances, secure a mortgage, or save for the balance of the purchase price.

Capital Growth Potential - If property values rise while the development is under construction, the buyer may experience capital gains even before taking ownership, effectively gaining equity on their investment.

New and Modern Amenities - Off-plan properties are typically built with the latest building standards, offering modern features, energy efficiency, and advanced technology, which can appeal to renters and future buyers.

Disadvantages

Construction Delays - Delays are possible in construction projects. This can affect the timeline for moving in or renting the property.

Developer Risk - If the developer encounters financial difficulties or goes bankrupt, the project may be delayed or cancelled. Buyers might have to wait for their deposit to be refunded, or they could lose it altogether if protections are insufficient.

Market Risks - The property market can be volatile, and if prices fall between the time of purchase and completion, the buyer may end up paying more than the property’s final value.

Overcoming Disadvantages / Market Expectations

At OliveHomes we undertake due diligence to only deal with developers with a proven track record. Developers, who, in the past, have built to specifications and the expected timelines. We will aim to show you previous projects to help you come to an informed decision on how we scrutinise developers. 

In terms of the market, current prices continue to rise, fuelled, as it has been over recent years, by supply and demand. Portugal has become a global attraction; Asians, North Americans and Europeans seek a home here. Much of the demand is at the top level making it an attractive option for millionaire buyers. The quality of living and prices compare favourably with other established millionaire destinations like the Côte d'Azur, Mallorca and the Hamptons. Of course, not everyone is a millionaire but the demand still gives capital appreciation across the board. 

Summary 

All things considered, it is no wonder that off plan property is selling extremely well. Our clients have seen property prices increase substantially over the last 3 to 4 years, when reserving off-plan, and there is no better feeling than opening your front door (for the first time) knowing your home cost a lot less than the current value. You are already in profit! Below are some of the current off-plan projects that are among the first-choice options. Have a look online and then contact us for a specific investment tour in the Algarve. OliveHomes.com - lifestyle and investment wrapped up in one.