How to find the right Real Estate in Turkey
If you are considering buying a property in Turkey as an investment, now is the time to make your move! Since March 2007, turkish mortgage interest rates are low and property prices are rising steadily. In fact some buyers are now making their investment property purchase with turkish mortgage. At a time when Antalya’s airport has hosted 5 million tourists in 2005 an amazing 7 million in year 2006, a predicting for sharp increase in traffic to all the Turkish holiday resorts over the next few years is inevitable. Many people believe that the current rate of development will not be able to keep pace with the increased demand for private and holiday accommodation.
Completed Turkish real estate sales to foreigners went up by an amazing 59% in 2006, reaching to a total $1.8 billion! (near Spain and Portugal), which clearly shows that even without EU membership, purchasing a property is safe. Everyone in Turkey remains optimistic about Turkey's eventual EU membership, but even before membership Turkey has already become a hotspot because of the ease in purchasing the property, constant price rises and low taxes.
88% of foreign-owned property is located in 10 cities, the top 5 being Antalya with 14,610 properties; Istanbul with a surprisingly low 10,695; Mugla (the location of Bodrum) with 8,251; Aydin (Didim, Akbuk and Altinkum) with 5,839, and Izmir with 4,572 foreign-owned properties.
Facts and figures for Property Investors
The result? House prices are set to rise still further so it’s a great time to invest. It’s impossible to predict exactly what return you’ll get from your investment but recent reports from various sources agree that it will be high. For example:
Ajans Press has recently reported that property prices along Turkey's Mediterranean and Agean coasts rose by more than 25% in the last year alone.
Research by Turkey's National Statistics Institute predicts that Turkey’s immigrant and population will rise to as much as 5.5 million by 2010, representing in the region of 13% of its population, compared to just 5% in 2001. The rising demand for property will continue to fuel the growth of the property market.
Turkey's Ministry of Development has gone on record as saying that the average increase in Turkish house prices was 17.5 percent in the second quarter of 2006 compared to the same period in 2005.
What to Invest in
Before you decide on what you want to buy, take the time to do some research. Clearly, if you’re planning on earning an immediate income from your investment you should look for an existing property (commonly referred to as a resale property) in an area frequented by holiday makers. Take a look at the rental market, get a feel for how much you can rent your villa or apartment for. Don’t forget to factor in other costs such as maintenance and property management charges (someone will have to look after the property in your absence) and remember that property with pools that are close to the beach will yield higher rental incomes.
Buying a run down place for renovation has the advantage that you can improve the property in ways that will specifically attract holiday makers. It’s a good way of adding value to your property while converting your economical investment into a higher yield, and getting building work done in Turkey is a choice for all. As for most of the part, the high quality turkish craftsmanship will impress you.
Off-Plan Investments and Buy-to-Sell Properties
Another popular option is to buy off-plan. This is where a developer decides to build a number of properties on a large plot and needs to sell them before they have been built to fund the development. The advantage here is that you can secure the property by paying a deposit and then a percentage (usually around 30%) of the purchase price.
Benefits at a Glance
As the development progresses and the properties get nearer completion, their values rise because there is less urgency to sell them and prospective buyers can get a clearer idea of what the final product looks like.
If you sell your property before completion or sell brand new property within 5 years, as a foreigner you won’t have to pay any capital gains tax.
Properties that are sold off-plan are usually very competitively priced because the developer will want to maximize the amount of cash he has to fund the development. In other words, the more cash the developer has, the less he has to borrow and if he borrows less then he pays less interest to his bank.
You can choose a prime location within the development and you can often specify the furnishings and decor of the property, all of which helps you to get a better return on your investment.