Kemal Tufan, director of the Turkish leading real estate & consultancy agency Tufan Properties, shared his point of view with the portal ee24.com on what properties in Turkey are more attractive for investment, how long the prices will keep on growing and how the disturbances in Turkey will tell on housing costs.
- The first and the most troubling question now is will the riots in the streets of Turkish cities influence the state of Turkish housing market and, if so, in what way?
- Riots in the streets of Turkey became a big story for global media to announce it like civil war in Turkey. That is completely wrong. All troubles are because of the "Taksim Gezi Park". Environmentalists started to protest because some trees would be damaged during renovation of the park, but some people started to provocate this innocent protest. Riots were just on the main cities of Turkey and some particular streets, but it was announced to the world like big troubles all over the country. It is beginning of summer tourism season and just time to play this dirty game.
For my opinion, now Turkish housing market mainly relates with the internal market. It might negatively affect investments about 5%, as some foreign investors think Turkey lost stability because of pictures on media. But knowledgeable people see that it's temporary situation, Turkish property market is still stable and no one can damage this economy with this simple tricks.
- The prices for real estate in Turkey have been rising quickly in the last years. How long do you think this situation will last?
- Turkey has many big projects such as airports, new bridges, roads, railways, city plannings, etc. Most of the projects are huge and take average 3-5 years, so it will affect property prices during this period. What is more, there are always upcoming projects for 5-10 years, so investments in urban real estate will bring big dividends.
Turkey is growing up with powerful economy and with largest youth population in Europe. These positive developments attract more investments in Turkey.
- How can cancellation of principle of reciprocity in 2012 change the market?
- Booming real estate market in Turkey gained additional growth momentum with the abolishment of the principle of reciprocity. Now Turkey requests profitable opportunities of every size and scale for property investors all over the world. Especially Gulf Arab States have already bought many properties in a year.
- What are the Turkish regions you operate in? What are their advantages for the buyers?
- We are operating on south-west coast of Turkey. Firstly, we, south construction companies, are building charming lifestyle villas and apartments. Those summer houses are becoming pleasure of lifetime for property buyers. On the other side, there are nice investment opportunities which are combining Mediterranean lifestyle and good investment returns, for example, if you buy apartments, holiday villas or invest in hotel tourism. Investment market in the southern coast is mainly based on small boutique hotels and holiday resorts. We are guiding our guests here according to their demands from first step up to solutions for marketing co operations.
- Are there many foreign buyers? How many Russians among them?
- Yes, there are many foreign buyers. Tufan Properties company is almost 20 years old now and has investors from England, Scotland, Ireland, Ukraine, Russia, Azerbaijan, United Arab Emirates, Bahrain, Holland, Middle East, Saudi Arabia, Germany, India, etc. For most of them we are not just like business operators, but also friends. For last four years Russian investors made 50% of foreign transactions in my company.
- What types of properties Russian buyers purchase the most?
- Russian market is on one way close to Turkish market style. Russians are operating on trust. As for my company, they purchased 50% of all investment projects (for example, hotels), 50% - lifestyle villas.
- What is the situation on the commercial property market in Turkey? What type of property is most advantageous to invest in (restaurant, hotel, etc.)?
- Especially in coastal cities of Turkey commercial property investments and developments never stop in Turkey. As tourism alternatives and tourism infrastructures developing, tourism demands also increase lately. There are many resale commercial properties in the market that can be bought for investment loans. Or you can build new properties as government supplying investment incentives.
- How long time takes to process a transaction of sale? What is the situation with obtaining Turkish residence permit?
- Purchasing a property in Turkey is actually easier than in many European countries. It takes from 1 to 2 months to receive the final Tapu (Title Deeds). One year residence permit is obtained by government to Russian citizens who own a property in Turkey. After it second application can be extended for 1 year, and after it - for 2 more years else.
- What are the additional costs for the transaction?
- A purchase tax of 4% is collected from the purchaser during the transaction. Notary (paperwork) costs approximately 500TL (about €200).
- What are the current annual property taxes and property maintenance costs?
- An annual property tax is collected by local government at the rate of 0.3% for land and 0.1% for a house in the Fethiye area. All properties are revaluating every year for tax purposes. Maintenance cost depends on the size of the property – about €500-1000 yearly.
Text: Ivan Ulitin, ee24.com