Property in Turkey, Investment?

There has been a great deal of discussion in the media about the rate at which Turkey is developing economically and how it’s becoming a tourism destination of note, as a result a growing number of individual and institutional real estate investors are starting to ask ‘is buying property in Turkey a good investment?’
To assist with investors’ due diligence and ongoing research into the viability of Turkey as a property investment destination, here’s our overview of the property investment potential in Turkey and the five main factors driving the market currently.
Firstly the long drawn out discussions regarding Turkey’s bid for EU entry finally resulted in membership negotiations being symbolically and officially opened on the 3rd of October 2005.
The opening of negotiations followed three years of Turkey judiciously adopting EU related reforms to align its country strategically with its European neighbours. The political, social and economic reform process is ongoing but Turkey has an arduous task to win round all the European nations and to be accepted for accession by circa 2015... however the country and its government are committed to the process.
As soon as negotiations were officially opened Turkey welcomed a strong and sustained wave of inward foreign direct investment from GCC nations keen to cement ties with Turkey as the nation that represents the ultimate unique fusion between Europe and the Middle East. Money has come from across the Middle East, most notably Dubai based real estate development companies such as Emaar and Dubai Holding have already ploughed and further committed billions of US dollars to significant commercial and residential property projects in Istanbul.
The commitment of these nations to the economic development of Turkey bodes incredibly well for the long term financial success of the nation and boosts the attraction of property investment in Turkey.
Secondly the tourism market in Turkey has been rapidly growing and developing particularly over the past three years. So much so that at the Arabian Hotel Investment Conference last weekend the senior vice-president of the Economist Intelligence Unit’s Corporate Network Daniel Thorniley declared Turkey to be the new ‘hot’ market for tourism in the Arab world - ahead in terms of potential for growth and expansion of even rivals such as Dubai and Abu Dhabi.
Tourism numbers rose by in excess of 20% in Turkey last year and 2006 projections from the Turkish tourism minister Atilla Koc are for visitor numbers to top the twenty one million mark. The first quarter of 2006 recorded growth in the tourism sector despite Turkey suffering a negative reaction following the discovery of avian flu in the country, and the number of visitors booked in already for the summer season is higher than 2005.
Going forward Turkey is rapidly developing key infrastructure projects along its southern Riviera region. New road networks and transportation links are being developed, an increased number of flight operators are now flying to Turkish airports from across Europe and North America and the nation is becoming more accessible and more desirable thereby increasing its potential to grow as a tourism hub in the future.
Thirdly property in Turkey is already booming in terms of both demand and price increases in Istanbul and along the southern coastline in towns and cities such as Side, Fethiye, Altinkum, Alanya, Marmaris, Kusadasi and Bodrum. Istanbul recorded up to 85% growth in residential property prices last year and according to local estate agents working in the residential property market in the city, 2006 could see increases anywhere from 80% - 120%. Property price increases along the Turkish Riviera have been driven by a growing demand for holiday homes and apartments and individual investment properties. Investors from the UK, Ireland, Germany and Canada are especially keen on properties with good communal facilities and close to local amenities which they can buy to let out to the growing tourism market.
Fourthly Turkey’s expanding economy is leading to a growing number of international companies establishing and expanding manufacturing and retail bases in the country. This is leading to an increase in the numbers of jobs available, a growth in GDP and an increase in demand for commercial property in Turkey which presents a potential investor with another market sector to explore.
Washington-based management consulting firm A.T. Kearney recently named Turkey one of the most attractive markets in the world for mass retailers and food retailers as it is a country with a strong GDP, a massive and expanding population and a nation with a fragmented market place meaning that there is huge potential for growth and expansion in Turkey which creates opportunity that will likely result in strong levels of sustained foreign direct investment.
This would have the effect of pushing up demand for commercial property in Turkey and already institutional investors from the world of finance have been examining the commercial property market in Istanbul with a view to investment. Financial institutions such as Morgan Stanley, UBS, Deutsche Bank and Credit Suisse have been actively researching Istanbul’s commercial sector while Dubai Holding have already committed five billion US dollars to the development of commercial property projects in Istanbul.
Finally there exists in Turkey a massive local demand for residential real estate. The Turkish government are committed to addressing the huge housing deficit that exists and also to raising the standards of living that many Turkish families endure. Over the long term this may represent an alternative investment opportunity for companies wishing to work with the Turkish government on public housing related projects. According to a recent article from Reuters there is a deficit of 600,000 houses in Turkey’s main cities alone which gives an indication of the scope for development in this emerging nation.
So, is buying property in Turkey a good investment? Many people seem to think so and the economic and political developments occurring in Turkey right now seem to support the long term investment ambitions of individual and institutional investors from around the world.

Source:Amberlamb

Turkey Property Investment Facts

When it comes to finding the best property investment potential in the world all eyes have turned to Turkey since the country began talks towards achieving EU accession and the Turkish economy officially became a market economy.
The future prospects for Turkey are very positive indeed and this translates well and directly to the Turkish property market where investor interest has surged throughout 2005 and where property prices are beginning to creep up fast.
While property prices in parts of Turkey may be about 10 years behind those in Spain for example, this trend is starting to change because the levels of interest in Turkish property have surged particularly along the Riviera region in southern Turkey. And since it was announced that Turkey is now on target for EU accession investor confidence in Turkey has reached an all time high.
Turkey has long dreamed of a place in Europe and has made a concerted effort in recent years to change legislation, practices and regimes to align the country more with its European neighbours. Cleary this has worked to Turkey’s political advantage but it has also worked well economically for the country. As Turkish resorts begin to feel more Southern European in their flavour so their attraction intensifies with European visitors - and tourism numbers in Turkey have increased substantially in the past five years as a direct result.
The Turkish tourism board are now spending a lot of money promoting the resorts along Turkey’s Mediterranean coast and as a result tourism, second home, holiday home and retirement home interest in these parts of Turkey have surged. For an investor this is highly encouraging. Those buying to let have more tourists interested in renting out their properties during Turkey’s long summer season - and as all investors will tell you, short term tourist lets can be highly lucrative. Those buying off plan at pre-construction prices are likely to find strong interest in the resale market for their properties when they come to completion from those who want to buy a holiday or retirement home in Turkey.
As the resorts in Turkey come up fast and more money is spent on improving roads, airports and general infrastructure so private investment is being poured into the creation of resorts, spas, golf courses and superior tourist facilities.
In Belek for example five golf courses have already been completed and five more are in the planning and creation stages. Money can be made through investing in such ventures and money can be made from the commercial side of property investment in Turkey by targeting tourist accommodation in the most popular resorts for example.
Investors looking to diversify away from Turkey’s hugely popular coastal regions are currently focused on Istanbul and Ankara where the local economies are vastly improved and where domestic purchasing power is strongest in Turkey. Here there is demand for apartments to let and commercial and office space to lease. Elsewhere the property investment opportunities are less well defined but as Turkey has already proven, given a little time and a great deal of personal and governmental effort the Turkish people can transform their economy and country and this can only bode well for the future prospects for all investors in Turkey and for the Turkish people as well.

Source:Amberlamb

Turkey Property Buying Process

The principles relating to the ownership of property in Turkey are laid out in Article 35 of the Turkish constitution and the laws relating to the foreign freehold ownership of land or Turkey real estate have recently been revised and relaxed meaning that the property buying process in Turkey today has been simplified.
An investor wishing to enter the Turkish property market needs to be aware of certain restrictions that apply to the foreign ownership of properties or land of a given type in a particular location; furthermore it’s imperative that detailed and thorough title searches are carried out by an investor’s lawyer because problems have been known to arise with vendor’s not having the right to sell property for example.
Basically the process to purchase investment property in Turkey is straightforward if an investor is aware of the potential pitfalls and the restrictions that apply. This guide to the property buying process in Turkey highlights the main issues property buyers should bear in mind; but nothing can replace good legal advice and the first thing an investor should do before even making an offer on a property is find a local real estate lawyer to represent their interests.
In Turkey the sale of property to overseas buyers depends on the principles of reciprocity - if the country from which the investor heralds grants the theoretical right of freehold ownership of property to a Turkish citizen then the overseas buyer will be given permission to buy property in Turkey.
Land in Turkey is allocated a specific function according to the zoning schemes of the nearest town or village and if a piece of land is deemed to be agricultural for example and is offered for sale to an investor for development, certain issues will present themselves because the buyer’s intended use for the land does not match its defined function. Therefore it is imperative that a solicitor checks whether any restrictions exist in relation to any parcels of land a property investor is interested in buying for example.
Other restrictions that exist relate to land or property that is physically located outside the designated centre of the nearest town or village; the Village Act stipulates that foreigners are not permitted to own such real estate. And the final main restriction that can limit a property investor’s choices in Turkey is the restriction surrounding military land. Overseas buyers cannot buy land or property in the vicinity of military land.
If an investor is in doubt over any of these issues or is concerned about any real estate they are interested in buying in relation to these restrictions they should not even submit an offer to purchase before consulting their lawyer.
Once a property has been identified by the property investor as fulfilling all their investment criteria, an offer to purchase can be submitted to the vendor and upon acceptance it’s usual for the buyer to sign a conditional preliminary contract and pay a deposit of up to 10% of the property’s underlying price. The contract is mainly conditional to the completion of satisfactory title deed searches, and if the purchaser pulls out of the contract for any reason than those laid out under the terms of the contract then they forfeit their deposit. Likewise if the vendor withdraws from the sale they are expected to compensate the disappointed investor. It’s wise to have all these stipulations detailed in the preliminary contract, and any promises that have been made by the developer or vendor that are binding for the sale should also be included in any and all contracts entered into.
It’s imperative that the property investor’s solicitor do thorough searches of the title to the land or property to ensure that the vendor has the legal right to sell and that there are no outstanding debts or legal problems with the property. If the investor is buying an older property they should have a full structural survey done as well - especially if buying in an earthquake prone area as some structural issues can exist that are invisible to the naked eye.
When all has been proved to be in order with the investment property in Turkey the final contract is signed in front of a public notary by the vendor and the purchaser (or lawyers with powers of attorney), and the sale is completed when the balance is transferred to the vendor. The buyer’s solicitor will apply to have the title transferred and for the new title deeds to be delivered in the name of the property investor. This process can take a few months and in the meantime the majority of related taxes and fees will be due.
Finally, an approximation of the additional fees and taxes would include lawyer and notary fees, buyer’s tax of 1.5% of the property’s value, government and community taxes, insurance, property management charges and utility connection fees.

Source:Amberlamb

Turkey for Investment Property Buyers

The attraction of Turkey from a property investor’s perspective just got even better. In October 2005 when Turkey agreed to enter into talks with the European Union towards the country’s EU membership, the Crown Prince of Dubai immediately invested five billion US dollars into Turkey real estate sector giving overseas investors a boost of confidence in the country. Many second and holiday home owners and retirees had already begun to explore the delights of Turkey particularly along the country’s southern coastline, but now focus has broadened and appeal for property in Turkey is expanding countrywide.
Over the past ten years Turkey has undertaken many major reforms designed to align the country with her European neighbours and form strong economic links and business relationships with the West whilst retaining an important bond with the Middle East. The reforms have been successful and have resulted in Turkey beginning talks with the EU. The reforms have also resulted in Turkey achieving a growing worldwide appeal and the country has become a hot tourist destination with the majority of visitors either attracted to the vibrant city of Istanbul or the long meandering and inimitably beautiful Mediterranean coastline.
Both of these areas of Turkey now have strong returning and highly attractive real estate sectors which are already of interest to many foreign investors.
But Turkey is a vast and unique nation offering investors an unrivalled range of opportunities - Turkey spans the cultural and geographic divides between Europe, Asia and the Middle East and it has over seven thousand kilometres of stunning coastline on the Mediterranean, Aegean and Black Seas. It has highly desirable resort towns, clean and unspoilt coastlines, vibrant and exciting cities, world class sun and ski facilities and amenities and a laid back charm and exotic elegance.
Turkey also enjoys a strong and dynamic, multidimensional economy that embraces modern market forces whilst retaining a large and traditional agriculture sector - but the Turkish economy lacks sustained and significant foreign direct investment...
One of the fundamental keys to Turkey’s successful transition to full EU membership is its ability to attract and retain FDI. It has set itself a target of attracting 1.2 trillion dollars from Gulf States initially and therefore the Crown Prince of Dubai’s immediate financial commitment to the country’s real estate sector not only gave property investors faith in Turkey it gave other nations faith in the country as a whole and should lead to the further promotion of Turkey and an increasing flow of foreign direct investment.
This also means that property investors who commit to Turkey can have confidence in their welcome and acceptance.
If Turkey can get the FDI she needs and attain full EU membership she will become one of the most important and influential countries in the world as she will strategically and politically represent a bridge between the Middle East and Europe. The future prospects for Turkey and her economy are therefore very positive indeed over the medium to long term making the country an exciting investment opportunity for the buyer seeking significant returns over the same term period.

Source:Amberlamb