In April 2016 the number of transactions with foreign buyers in Turkey decreased by 14.4% compared to April of previous year. However, the Russians remain among the five countries, which residents are actively acquiring Turkish square meters.
Thus, the market has not fallen, but continues to exist. Omar Jahsh, the expert from the Agency Just Invest Turkey told EE24 why now investing in property in Turkey is the most beneficial and gave some advice on investments.
Prices change
Last year's events on the world political arena has led to that prices rising on Turkish property have ceased. But until then was observed the systematic rise in the cost of square meters. For 2 years (until November 2015) the price of real estate increased by 100%. The cost of land has doubled in just 1 year.
In June-July is expected the decline in property prices, followed by renewed growth in August. This is due to the very rapid development of the transport infrastructure of Istanbul and Turkey as a whole: very soon in the capital will open the third ring road, the building of new bridges will be finished. Eurasian tunnel under the Bosphorus in the final stages of construction, as well as the third airport of Istanbul with a capacity of 150 million people. In this regard, by the end of 2016 is expected the additional impetus for the property market.
Improving the transport system contributes to the gradual growth of housing prices, commercial premises and land in Turkey. Developers in the capital already raised prices by 30-40% in comparison with the previous year. Of course, due to the complicated geopolitical situation, it is expected some decline, but still the prices will be 20-30% higher than last year. All of the above applies to residential facilities, commercial real estate prices rise will be higher.
Thus, the Turkish real estate market is currently at the initial stage of growth of prices, so investors can count on good capitalisation in the foreseeable future. The volume of investments in the infrastructure of the country, leading to soaring real estate prices, was $45 billion, and in the next 6 years will reach $100 billion.
The political situation
As for the internal political situation, it is very stable. The ruling party leads Turkey since 2003. In 2016 will be a referendum on moving to a presidential form of government, which is also a guarantee of stability and further development of the real estate market.
The state of the economy
By 2023, the government wants to turn the country into a major trading and logistics centre of Europe. Turkey, thanks to its geographical position, has all chances to become a bridge between European and Eastern countries.
In addition, in 2023 ends the validity of the Treaty of Lausanne, under which Turkey has no right to engage in mining. After removing this prohibition, the country which is rich in oil, gas and boron will undoubtedly influence the formation of world energy prices.
In 2015, Turkey's growth amounted to 4% - it is more than in all the other countries of the Big twenty. In 2010 and 2011, only China was ahead the economic growth of Turkey. Finally, Turkey today has no debts to the IMF, but rather lent him $5 billion.
A few more facts in favor of Turkey:
- a visa-free regime with 89 countries (by the way, this year Turkey has canceled visa requirements for citizens of Schengen countries);
- a simple procedure for obtaining a residence permit through the purchase of real estate;
- preparing the project of granting citizenship immediately after the purchase of the property;
from October 2016, the citizens of Turkey can stay in the Schengen zone without a visa;
- affordable mortgages for foreigners;
- reasonable prices for all categories of facilities;
- low property tax
- europaisierung and a good attitude towards foreigners;
- there are no obstacles to opening and running a business.
Where to invest?
Investors can be guided by the following principle: "the store is better than flat, land plot is better than the store." But even apartment will give you 20% of profit per annum. For livind the mosr reasonble variant is to buy an apartment on the construction phase.
If you want a permanent income – choose a store. It will provide you with an income of 2 times greater than an apartment. Plus, with the right approach, high capitalization is guaranteed. The land can bring 50% per annum and more.
In addition, when selecting an object it is necessary to consider the direction of the growth of the city: explore the development plan. Pay attention to where there will be basic communication, what will be the size of the housing fund, if there will be universities, schools, shopping malls, hospitals, parks, restaurants, etc.
Property in Istanbul
The greatest number of real estate transactions are traditionally concluded in Istanbul. There is even a saying «Earth and stone in Istanbul weight in gold».
Over the past 30 years, the population of the Turkish capital has increased tremendously. In 1985, the population was 5.5 million people, now it is 16 million according to official figures, 20 million - in the unofficial. Active industrialization and settlement of Istanbul stimulate the demand for housing. This leads to an increase in the offers number on the market.
Now in the capital there is a real "construction of the century". Annual demand for housing is around 300,000 apartments. According to tradition, after the wedding, the couple in Turkey should move into their own place. And there are still internal migrants and immigrants from other countries. And yet the housing stock in Istanbul is very extensive, on the secondary market as well as on the new buildings market.
About 80% of the land plots in Istanbul are in a state Fund. Even banking institutions invest in local real estate.
As for prices, they do not "bite". 2-bedroom apartment in a new building in a residential area (an hour away from the city center) will cost $60,000. In the suburbs (30-60 minutes to Istanbul), you can find objects and $30,000, with the sea, nature, shops with cheaper products in the near.
Choose an apartment
In 2015, the average yield of apartments was 20%. In some areas did not rise above 10%, in others reached the level of 30% or even 50%. Of course, the most beneficial is to buy housing in the very early stages of construction.
In the first stage, the apartment can be bought for half the price. In the second stage, which is often showed as the first for foreigners, construction is already underway, so housing is more expensive. In the third stage, after completion of all works, the apartments are sold at 100% of the cost. However, in this case you will see what you buy. And in the early stages there are risks – delaying the delivery of the project, using cheaper materials than stated, etc.
On which circumstances should be payed the attention when buying an apartment
1. Timely delivery of the other projects by the builder
2. After-sales services
3. if the buyers win with the purchase (calculation of inflation, rent, etc.)
4. Low monthly costs
5. How was organized housing self-government in the previous objects of developer – it influences on annual growth in the value of real estate after completion of construction. Fewer problems in the house and above the quality of the accommodation and residents, the higher is the growth of value.
Stores advantages
Shop, as noted earlier, pays for itself 2-3 times faster, than the apartment. In some areas, the capitalization of commercial premises exceeds the annual yield.
In addition, the store can be given for rent with bare walls - the tenant will trim it to his taste. Accordingly, when he moves out, you will have repaired premises.
And with the apartment offered for rent, the opposite is happening: before finding a new tenant, you will probably have to spend on repairs.
The benefits of land plots
The yield of the land in Turkey is growing exponentially. The longer you own the site, the more profit you will have.
In short term investing (1 -2 years) income can be up to 50% per year. For medium-term investing (3-5 years) profits will increase. With long-term investment (5 to 10 years) you will get the maximum growth.
The land doesn't expire, it is not necessary to repair or keep it under scrutiny. It is no coincidence that the majority of practices of the Turkish investors invest in land in Istanbul.
Text Alena Eliseeva, ee24
Photocredit Depositphotos.com and Just Invest Turkey