Imagine that you invested in an off-plan Spanish property in 2006, paying the advertised price of 200,000 euros, with an initial payment of 30% (60,000 euros). The time has now come to complete on the property and to pay the remaining 70% of the purchase price, but you´ve just discovered that the developers have sold a similarly sized neighbouring property on the same Spanish development for 140,000 euros.

Not a nice feeling is it? But can you blame the developers?

There are a number of reasons why a developer may reduce the price of their properties in Spain. Amongst them are falling demand, where simple economic pressures mount upon a developer, forcing the company to dump stock at ´sale´ prices.

However, in cases of non-completion by off-plan buyers, the developer is able to retain a buyer´s initial deposit (in this case 30%), and re-sell the same unit at a 30% discount to a new buyer, without their figures being affected.

To protect their integrity and their loyal off-plan buyers, most developers in Spain prefer to only discount properties that have returned to the market due to non-completion. After all, this makes financial sense for them. Although this is still upsetting for buyers who have already bought into the project earlier at higher prices, it is not as galling a situation as seeing sweeping discounts being applied to all remaining stock, as has been the case within a handful of Spanish developments. This sort of practice obviously leads to a devaluation of stock for existing buyers. Although there is very little that a previous off-plan buyer can do in those circumstances, at the very least it encourages strong feelings of resentment amidst early investors.