New properties in Colombia or also known as off plan property
refers generally to all new developments that are sold before the termination of the construction of the property (under construction
) and not as it used to be only properties in the initial stage before the construction had started (pre-construction
). The buyer only have the property plans provided by the architect as a guidance of how the finished property is going to be.
One of the biggest differences between a resale property and new properties in Colombia is the seller. Off plan properties or new developments are sold directly by the developer whereas traditional resale properties are normally sold by a private owner.
As the standard of developers in Colombia is very different and as you will not be able to see the finished property before you have already signed the contract it can highly be recommended to gather the most information available before deciding upon a new development.
In BuyColombiaRealty.com, we represent only experienced and renamed developer firms. Our job is to help you find the right off plan property in Colombia. We are able to provide you with guides and additional information about the promoter, what they have constructed before and legal information about the company behind the promotion.
Another difference between off plan and resale properties is how the price is set.
The idea behind off plan properties is that the developers are interested in selling as many properties as possible in a new development before they start the building work.
This will help the developer finance part of the project and is a good guarantee for their creditors. To attract as many early buyers as possible the price level is initially set below the market value so both the early buyers and the developer gains by this situation.
During the construction period, which can normally take from one to two years for housing projects, and three or five years for tourism or commercial projects, the price level of the properties which have not been sold will increase, so at the end of the construction they will be equal to the market value at that point of time.
As the property prices in Colombia have an average increase with about 15% per year in the last 5 years (June 2009), the value of a property purchased in the initial stage of the launch will have increased by the average increase of property price during the years of the construction and added the special price the property was purchases at.
It's important to mentioned that Colombian real estate market conditions have been stable the last 10 years. We pass through 10 years ago what other countries like U.S., Spain and other European countries are currently experimenting.
We learned the lesson from the past and now the ghost of the speculation has been largely removed.
What to bear in mind when buying new properties in Colombia.
- As explained before, the prices of properties in a new development will increase during the construction period and are initially set below market value to attract early buyers. It is therefore important to buy as early as possible after the launch to the market of a new promotion.
- If the main purpose of buying a property is to rent it out as a holiday home and get the highest yearly return possible there are a number of things to take into consideration. First of all the price of the property is more important than the quality of the development. Rental properties are damaged much faster than private properties so there will have to be a good relation between quality of the property and the rental price.
- If you are looking to buy a property to settle down in Colombia , as the property is going to be used for a private use and assumingly for a longer period the quality and the look of the finished property are very important. It is also important to take into consideration that you will be living there all year around and will therefore need certain utilities nearby like shopping, markets, schools, or special amenities inside the development.
- Mortgage loans in Colombia are not available for foreigners, as long as they comply with certain conditions. Local banks and financial entities offer mortgage loans for Colombians living abroad and his/her foreign spouse. So if you need a loan to finance the purchase of new properties in Colombia you will have to decide if you are going to use the developer's bank in Colombia, or if you plan to get a loan in your home country.
- When buying off plan properties there nearly always exist an important gap of time between signing the private and the public contract due to the time involved with finishing the construction of the property. As the private contract is binding it is a good way to secure the agreement in this time span.
There are other things to be aware of when looking for the right property like qualities, location , financial, legal matters and the for what use the properties is going to have.
In my Colombia Real estate Guide e-book you can find further information about what to be aware of depending on your reasons for buying a property in a new development as well as information about financial and legal matters to consider when buying new properties in Colombia underconstruction.
In BuyColombiaRealty.com we can guide you through the whole process as we are experts in both the process of finding the right development and all the legal and financial issues involved.
Click here to browse new properties in Colombia under construction we currently have for sale, offered by the most important and solid developers in main Colombian Cities.
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