A Turkish Constitutional Court ruling effective from today (Wednesday April 16) has put a temporary halt on the sale of Turkish property to foreigners.
According to Turkish newspaper Hürriyet, a circular letter was sent to all land registry offices in Turkey indicating the end of the sale of real estate to foreigners on Tuesday April 15.
A Resort in Antalya: With Turkey’s new FDI law in place foreign property developers have been barred from developing resorts like this
A law allowing the sale of real estate in Turkey to foreign companies was annulled by Turkey’s Constitutional Court last Friday. In an attempt to gain entry to the EU, Turkey’s centre-right government previously approved the law allowing the sale of Turkish property to foreign individuals and businesses. This however changed on Friday when the ruling of Turkey’s Constitutional Court favoured the nationalist-leaning Republican People’s Party.
This decision by the court would ultimately affect companies specifically set up to acquire property in Turkey by foreign investors through joint ventures.
Antalya Limani Turkey [Photo credits to Erdalde on Flickr]
This summer there has been a change of emphasis in news and publicity about Turkey. Those with long memories will think of the terrible Izmit earthquake of 1999 and more recently Turkey’s tourism potential was the subject a substantial TV advertising campaigns. However, the latest news has been about the electoral success of Recep Tayyip Erdogan, based on the country’s booming economy (with a few items about the tricky situation along Turkey’s frontier with Iraq).
Turkey appears to be on a wave of economic success, making the country increasingly important vis a vis the European Union, its main trading partner. In terms of property investment, this encouraging big picture suggests that Turkey is a good place to consider. Sites such as Nirvana certainly have lots of upbeat stories about investment in Turkey with companies as diverse as Germany’s ECE (shopping centre developments) and Sama Dubai investing at present. Focusing on real estate development, Rhiannon Williamson of Amberlamb was notably upbeat earlier in 2007, instancing investments by ETA Star and Emaar Properties, both of the UAE. Citibank extending its well-established Turkish network with a new branch in the southern coastal metropolis of Antalya should be taken as symptomatic of the prospects for the country’s economy, especially its further tourism potential. ING Real Estate is planning to invest upwards of half a billion euros in Turkey in the next few months.
For the private real estate investor Conti will give mortgages to Belgian, Dutch, German and UK nationals for up to 200,000 euros (or the higher level of £250,000 for UK citizens) with an LTV of 75% for Istanbul and the main tourist areas or 60% elsewhere. The maximum term is 15 years and the current variable rate for sterling mortgages is 7.75% (which seems very reasonable compared, say, to buying in England through the Abbey National). Given that Turkey has a higher inflation rate (8.2% in 2005 according to the World Bank) than either the euro zone or the UK, this seems like a good deal but bear in mind that there is bound to be some exchange rate risk. From next year investors should be able to take out local currency mortgages but presumably the high rate of inflation will bump up interest charges.
Interestingly, ING (see above) does not plan to target a local company for takeover although ING did acquire Oyak Bank for 1.9bn euros in June. Possibly, they have a partnership deal in mind because the Turkish market is not highly rated for transparency. The private investor should be prepared for any of the following: problems with title, poor build quality and lack of reliable price information. Rental yield data seems particularly hard to come by although the extended holiday season (some districts boast 300 days of sunshine) should help. Although tourist visits to Turkey have been rising quickly (24 million visitors in 2005), tourist spending is not so impressive (approximately $760 a visitor) although this doesn’t take account that some of these visits would have been city-breaks in Istanbul and holiday lets paid for in the visitors’ home countries.
Michael Harrop of New Turkish Properties estimates that the value of Turkish holiday property has gone up by 40% since the same time in 2005 and forecasts another 40% increase between now and 2010.
First-hand information on the rental market in Turkey’s tourist centres would be most welcome.
Wednesday, May 30th, 2007 
Posted by Overseas Property Mall in Australian Property, Jamaica Property, Malaysian Property, Miami Property, Property News Summaries, Syria Property, Turkish Property, UK Property
Wednesday, February 7th, 2007 Posted by Overseas Property Mall in Abu Dhabi Property, China Property, International Real Estate Trends, Japan Property, Mexico Property, Property Industry News, Property News Summaries, Turkish Property, UK Overseas Property Trends, UK Property, United States PropertyWe start the international property news beat on a light note with a post from Curbed L.A’s Celebrity Real Estate Wrap on Celebs (Tom Jones, Rudolph Velentino & Kirk Kerkon) moving homes.
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Five years ago, Turkey allowed foreigners to buy property. As business booms, Graham Norwood looks at the options for city slickers and sun-worshippers
Perfect skies, blue seas, golden beaches - Turkey has got them all, but, for now at least, instead of being overrun with tourists, much of it remains relatively unspoilt, so ideal for holiday-home seekers.
Of the 51,044 homes owned by foreigners in Turkey in 2005, some 9,298 (or 18 per cent) are in UK hands, according to Turkish government data, up from just 2,420 in 2003.
Istanbul, straddling Europe and Asia, is increasingly popular and is serviced by budget airlines. “Istanbul is fuelled by domestic demand for rental property because locals prefer to rent than to buy. In addition, the city is beginning to draw foreign investors,” says Ali Ozturk of Regnum, a Turkish development company. He says that rental yields of 7 per cent to 9 per cent are possible, depending on the quality and location of the development.
Prime Istanbul locations for long-term investors include Levant, Akatlar and Etiler, all central areas mainly consisting of flats near shopping malls and the business centre. Areas such as Maslak, Besiktas and Ulus offer good views of the Bosphorus, while in hilly, older areas such as Bebek, Rumelihisari and Kemer there are more spacious family houses.
Within the city, about £30,000 will buy you a small new-build flat in a secondary location, probably without parking; for £60,000, you will get an apartment in an area more appealing to renters. But you need to spend £100,000-plus to get a property that is likely to appreciate and attract corporate tenants, while £200,000-plus buys a big house in a desirable suburb 30 minutes from the centre.
There is a similar variety of property and prices on the Turquoise Coast, the most sought-after area of Turkey where the Mediterranean and Aegean meet. The Newcastle-based Turkish Property Centre says that the most popular locations for British buyers are Bodrum and Fethiye, although less well-known areas, such as Antinkum and Kushadasi, are also popular. “In some places, you can buy flats close to the water for £20,000, although higher-quality developers are now moving in,” says a TPC spokesman.
Michael Doig of Colliers CRE, a British property consultancy that monitors Turkey’s housing market, says: “Like many countries that are becoming the focus of British residential investors, growth is estimated at anywhere from 10 to 40 per cent a year.”
Turkey’s Muslim conventions don’t prevail in resorts, but there are some idiosyncrasies that can catch out foreign buyers. In some areas, for example, it’s hard for Britons to buy a car without being full-time residents, and shipping large items to Turkey. is tricky and costly.
But the most significant problem until recently has been the country’s volatile economy. This has been a deterrent to property investors, especially as slow progress on reforms have led to faltering talks on Turkey’s EU membership.
As recently as 2001, the Turkish economy was associated with soaring inflation, black-market activity and high levels of national debt. Even in 2004, 40 per cent of government spending was on interest payments on debts. But in the last two years, to win support for EU membership, Turkey has changed.
The country has brought inflation down to its lowest level since the mid-1970s, annual growth is now a staggering 9 per cent, and it is setting up systems of land registry to prevent disputes over ownership.
“The transformation has been dramatic. The introduction of a mortgage system this year will stimulate demand for domestic housing and drive prices up. There’s been a liberalisation of foreign property-ownership laws, with new legislation in 2005, and the possibility of EU accession has increased foreign investment,” says Alise Crossick of Ready2Invest, a UK property consultancy.
Given the many agents now marketing to Britons, it is amazing that Turkey only allowed foreigners to buy property in 2001. In five years it has become popular, helped by the fact that all property is freehold and eligible for inheritance by spouses or offspring.
Turkey is already a firm favourite. And, for the moment at least, a competitively priced one.
How to buy
Source: The Independent
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Eyeing substantial increases in property sales to overseas investors, Turkey has said it is to model new regulations along the lines of those in place in Spain, promoting construction new holiday home complexes to be sold off plan. The announcement came from Turkish Finance Minister Kemal Unakitan and Tourism Minister Atilla Koc on their return from a fact finding mission to Spain.
In the past the Turkish property market has been off limits to most foreigners. However, new regulations saw increasing sales to overseas investors in the years immediately before a constitutional challenge to those regulations last year. For example, just short of 2,900 properties were bought by foreign nationals in 2002, 4,000 in 2003, 9,000 in 2004, and 6,000 in 2005 up to the point at which sales were halted.
With a newly revised law, once again allowing properties to be purchased by overseas investors from countries offering Turkish nationals reciprocal rights, some 4,600 properties were snapped up by foreigners in the first six months of 2006.
Now that EU membership is a firm hope, Turkey is expecting the number of overseas property buyers to increase and is now planning for a building boom of Spanish proportions – in Spain around 1m residential units – mostly for summer use – have been sold to overseas investors at an average price of around £123,000, Unakitan pointed out.
In comparison sales of Turkish property to overseas investors have so far been tiny – only some 57,000 units in 83 years.
Currently 62,500 foreigners from 70 different nations own properties in Turkey. Originally most foreign buyers were Syrian, and Syrians still hold by far the largest area of land. However, more recently Brits and other Europeans have been buying the largest numbers of units.
According to Unakitan, there have been 14,500 UK buyers 14,400 German, 14,000 Greek, 3,100 Dutch and 2,500 Syrian since 1934.
He has asked Turkish officials to draw up plans for copying the Spanish model in which most developments are constructed as managed complexes, are sold off plan and are often marketing overseas scale models and artists impressions.
Source: Fly2let
Turkeys State Minister and Deputy Prime Minister, Abdullatif Sener, has said a bill regulating the implementation of Turkeys new mortgage system is top priority on the agenda for the 2006 parliamentary year. So within months investors will soon be able to take out a conventional mortgage for up to 30 years to finance their property purchase in Turkey.
Currently, Turkish banks offer only short-term loans, limiting the number of mortgages that can be granted. This has somewhat limited the real estate economy in Turkey today. However the reduction of extremely high levels of inflation through a floating foreign exchange regime and tight monetary policy have led to improvements in Turkeys economic conditions. The countrys high interest rates have, in turn, fallen from around 24% at the end of 2004 to an encouraging 13% at the end of 2005.
Turkey has a huge population of just over 70 million which expands by 2 per cent each year and while 70 per cent of the population is younger than 30 years of age, there is a strong demand for property in Turkey. The new mortgage facilities will boost the Turkish property market to great new levels and we expect to see a dramatic increase in property construction in general, including holiday homes. With over 25 million tourists visiting Turkey each year, the new legislation will undoubtedly encourage further growth in tourism and create some encouraging new buy-to-let opportunities.
Turkey boasts some stunning mountain and coastal scenery as well as a rich and exciting culture, making it a top worldwide tourist destination. Added to this, the current economic climate in Turkey is strong and actively favours foreign investment in the property market, while most experts predict it is now sitting on the brink of a property boom. The introduction of the Turkish mortgage will prove invaluable to finance purchases in numerous new developments currently under construction in prime beach-front locations - it seems there has never been a better time to buy into this growing property investment market.
Finally, with Turkeys EU accession due sooner rather than later, the Turkish mortgage will go a long way to bring Turkey into line with the standards and practices expected from worldwide property purchasers. We believe the results will prove very inspiring to our investors.
Source: Property Showroom
Related Links: Turkish Property For Sale In Kemer
For many people Turkey has other advantages too: a friendly, exotic culture, great shopping and some of the best-preserved archaeological sites in the world. The Government’s successful economic reforms have also encouraged investors, and new laws make it easier for UK citizens to buy Turkish property and tourist numbers are rising by 25 per cent a year.
Turkey’s accession to the EU is still a decade away, however. David Cox, director of Property Frontiers, a UK-based agent, says: “Turkey is an interesting market. It has the potential to be the ‘new Spain’ — it has the fundamentals, a great climate and is a place people want to go on holiday to and retire to, but some of the supporting factors, politically and economically, haven’t happened yet. That is the gamble — that is the risk for the investor.”
The property boom is concentrated on the coastal resorts along the Aegean and Mediterranean seas, namely the fashionable Bodrum peninsula, Dalaman and Fethiye as well as the traditional seaside towns of Kas, Kalkan and Altinkum. In some resorts, prices are said to have risen by 100 per cent in the past two years. A more realistic guide would be 20 per cent per annum. On some developments the spectacular price rises are being driven by speculators rather than genuine holiday-home buyers. “Flipping” — when investors sell on off-plan contracts before the development is finished — is also occurring. When the speculators move on to a new market, house prices may stagnate or even fall.
Dennis Phillips, of John Howell & Co, the international property lawyers, says: “In our view the trend of year-on-year appreciation will last one to two years before plateauing off.”
Plenty of new developments mean lots of choice for buyers but may also depress prices when it comes to selling or renting. Most visitors also come on package tours and access is still an issue. “Rental is still not that good in Turkey because the price of a flight is nearly as expensive as a package holiday,” Zena Ozguler, accounts manager at The Turkish Property Centre, says.
Investors are hoping the budget airlines will come to their aid, but they may have a long wait. EasyJet serves Istanbul, but not the coast and Mr Phillips says that most buyers will struggle to rent on a “decent commercial basis”. He advises: “Don’t expect to have a really strong market for a couple of years.”
In spite of this, Turkey deserves serious consideration, especially if you are looking for a property to use as a holiday home as well. If you have less than £40,000 look at Altinkum. Ms Ozguler says: “This is a great place to buy. It’s an up-and-coming, family-friendly beach resort that is attracting lots of new investment.”
The Turkish Property Centre recommends its own development, Miranda Gardens, just 500 metres from the beach, with apartments starting at £33,000. Property Republic, a London-based estate agent, is offering apartments from £58,000 in Yalikavak, a new upmarket holiday development zone about ten minutes’ drive from Bodrum.
Sources: Sunday Times
Related Links: Turkey Tourism
Its latest Property Investment Tracker puts Bulgaria ahead of Cyprus as the top yielding overseas investment destination in the first quarter of 2006.
Deposit levels of 30 per cent are easily accessible to most investors as Bulgarian property remains relatively cheap, with a typical two bedroom apartment costing in the region of £80,000, said the firm.
‘Although the level of house price growth is expected to tail off slightly during the remainder of 2006, overall market growth will remain high, alongside excellent yields of 12 per cent in quality areas such as the ski resorts of Bansko and Bovorets.
Cyprus is not far behind and offers a lower risk opportunity for investors. Low deposit levels of just 15 per cent are possible now and Swiss Franc mortgages are available with rates of just 3.25 per cent, making borrowing more affordable. Capital growth is likely to remain stable at around 15 per cent which, combined with rental yields of 8 per cent, results in a total of 84 per cent return on cash invested’.
Assetz also rate Turkey ‘interesting’. Mortgages are not currently allowed, but prices are still rising well, it said. ‘However prepare for a rule change in 2006 permitting borrowing that will ignite the market further’.
Although gains are still strong, with 27 per cent capital growth and 8 per cent yield, the change of rules concerning borrowing will have a dramatic effect on the housing market, potentially pushing up prices in key areas as much as 50 per cent in one year.
However, South Africa and the USA were given danger warnings. With interest rates rising in both countries, some investors must prepare to make a loss, particularly with new build in the USA, it said.
South Africa house price increases have slowed from 24.6 per cent to 15.8 per cent and the rate is likely to continue to fall. Mortgage rates, already 8.5 per cent are rising, prompting serious concern over the stability of the market. Yields have fallen from 10 per cent to as low as 5 per cent in 2005, so rental income will fail to make a profit for many investors.
‘Overseas markets are still offering excellent opportunities for investors, with Bulgaria and Cyprus now overtaking some of the more established destinations in terms of total return on cash invested’, said Assetz managing director Stuart Law.
‘However, investors should remember that high return is often associated with higher risk. Established locations such as France are still holding up extremely well against the competition, offering a total 68 per cent return on cash invested with an excellent holiday rentals market. With the low deposits requirement of just 15 per cent in France, the total return on cash is still exceptional at 68 per cent.
‘Property in America is in a very tense state at present with conflicting statistics showing resilient existing home sales but collapsing new build sales volumes. The jury is still out on how safe it is to be investing in the States right now.
‘Cheap Bulgarian ski destinations are certainly in as much demand as quality resorts in the France Alps. However, for sunny destinations combined with quality investment returns I prefer the south of France and southern Cyprus to the coastal resorts in Bulgaria.
Bulgarian economic research company Industry Watch has also expressed some concerns over the outlook for the country’s property market.
Its figures put house prices up 21.6 per cent in the year to December. But with construction continuing at great pace, increased supply could see prices begin to level off, it said.
Given that prices in general are lower in the Black Sea resort of Bourgas than in Sofia, while construction is at a high level, the coastal town currently has the most overvalued property, said Industry watch. But Shumen, Rousse, Plovdiv and Pleven are currently undervalued, it believes.
Source: Fly2let
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