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Turkish delights
 Buying in Turkey right now could offer you strong long-term investment potential. Jane Drew takes a dip in the Turkish Riviera
Published in Square Foot Magazine on February 15 2007
Whether Turkey joins the European Union or not – it’s been an official candidate country since 1999 -- the changes the government has made to align the overall economic and political situation with that of Europe means that it’s economy is dynamic and the tourists are flooding in. This standardisation makes for a comfortable transition into Turkey for businesses, expatriates and investors and increases the potential for inward foreign direct investment, which is positive for Turkey’s long-term economic success.
The Turkish Riviera enjoys up to 300 days of sunshine every year, which makes the area an international tourist destination hit. Tour operators have increased their exposure to Turkey and in return Turkey has responded by developing some world-class resorts offering stunning holiday opportunities that are proving particularly popular with European travellers. As a direct result the demand for short-term rental accommodation in summer holiday hotspots is on the increase (as are rental yields) meaning a well-positioned investment property will offer great buy-to-let potential.
Capital growth is the driving investment rationale and prices have been rising at 20 percent to 30 percent a year.
Easy to invest
Buying investment properties in Turkey couldn’t be simpler. If you’re resident in a country in which Turkish residents are free to purchase freehold property then you’re free to buy in Turkey. The buying process is similar to that of Europe with a preliminary contract signed upon price agreement, a non-refundable deposit (of 10 percent) made upon condition that all surveys and searches are satisfactory, and a final contract signed before title deeds are transferred. You’ll also need to factor in the following costs: stamp duty 0.75 percent; real estate purchase and acquisition levy 1.5 percent, annual property tax 0.1 percent; notary/lawyer fees 1 percent; and estate agent fees 3 percent.
Any proposed purchases must undergo an official check before the title can be transferred, primarily because foreign investors cannot buy a home close to a military facility. Be aware that this can cause delays to purchases outside the main towns.
Proven track record
 Turkey has been on an upward trend since 2002, when near-economic collapse led to a tough recovery programme agreed with the IMF (International Monetary Fund). Since then, economic growth has averaged over 5 percent and inflation has fallen dramatically. The Turkish government equalised property-buying rules for foreign nationals in July 2003, and by January 2006, the number of foreigners owning property in Turkey reached 56,000.
The changes made have translated into significant price increases countrywide but which started in the most popular areas for investment along Turkey’s southern coastline.
Buy now
Turkish property prices are rising consistently - however, as a direct result of the recession in the housing market earlier this century, prices remain intrinsically low and have a lot of ground to make up. By buying now you are buying into that projected period of inflation, you will also be benefiting from the future predicted buoyancy and interest in the market sparked by Turkey’s growing appeal and attraction for global investors and visitors. These facts point to a long-term sustained period of capital appreciation and also to the fact that you can likely benefit from strong rental demand and increasing rental prices making a buy-to-let investment in Turkey also highly attractive.
It was feared that lack of planning controls would lead to over-development, but the Turkish national and local governments are keen to preserve the country’s natural assets and have therefore implemented strict planning and density rules. This means that investment properties are being built sympathetically and are unlikely to be surrounded by mass-density housing blocks in the future. What’s more the majority of new developments, aimed specifically at property investors and second-home buyers, are being built to meet European standards and regulations.
Whatever your personal reasons for considering buying investment properties in Turkey you can rest assured that the market offers some fantastic real estate for sale and some great opportunities to profit from rental income and increased underlying property value.
Current hotspots
Because Turkey has such a vast coastline, you need to know where to buy to get the most for your money:
MAIN RESORTS: On the Western Mediterranean, Marmaris, Dalyan, Fethiye and Kalkan, on the Eastern Med, Antalya (with an airport) and Alanya. All these destinations are easily accessible to tourists with an already established holiday atmosphere of sun, sea and sand.
UP AND COMING: Plans have been laid to turn Dalaman (the airport town servicing the Western Med) into a tourism hub. Buy now at low prices and hold for the medium term to gain a positive rise in the value of your home. The same can be said of Belek (with the golf course) and Side (a sleepy family resort) both on the Eastern Med.
TIP: Property in Alanya is hotly in demand among local buyers from the likes of Istanbul who are now competing with international investors. |
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