Turkey – the new land of promise

Turkey is the new land of promise for foreign property investors – the country has recently opened up land ownership for foreigners, EasyJet have started to fly into Istanbul, and Harvey Nichols is about to open up a store there. This all makes for prime location for property investors.

Old or new – there’s something for everyone, from ancient Byzantine buildings through to shiny new skyscrapers. Istanbul, the capital city, is the place many investors are talking about – a bridge between Europe and Asia, the city is awash with culture with many people living in Asia and working in Europe. However, this does lead to an immense movement of people each and every day, and the rush hour never seems to end. The city does have an underground system, however locals prefer overground methods of transport such as cars, ferries and trams.

With Turkey not yet in the EU, but with talks underway, there is immense potential for capital growth in property. British investors account for the largest proportion of foreign property investors, with many preferring purpose-built homes. A small three-bedroomed house is around $150,000 making the capital city an attractive place to buy.

However, it’s not all so rosy. Some terrorist groups are not happy with a more open Turkey and there have been several bombings of tourist centres. However, many major cities in the world have tourist threats regularly, so this will not be a big worry to many. Turkey has also been criticised for some of it’s human rights records where in the countryside, many women and gays continue to face discrimination. However, most major cities are fairly cosmopolitan and Istanbul is the hippest place to be.

Istanbul has major property developments planned- several high-rise luxury apartment blocks are already in the pipeline, and a new shopping centre has been built. Harvey Nichols covers three floors of this immense shopping experience, and renowned restaurant chain Hakkasan is said to be opening a new restaurant on the roof of the mall.

In the past two years, it has been reported that property prices in the capital have risen by 100 percent – demand is still continuing to outstrip supply and this is pushing prices up further. Should Turkey gain entry into the EU, expect this incredible growth spurt to continue.

However, the property market is not open to all investors – you cannot get a mortgage in Turkey which means you must be able to buy your property outright, or go for a long-term bank loan. The law is being looked at, but don’t expect a change too soon. It may be worth seeing if you can get a mortgage in your home country on a Turkish property.

One of the hottest spots to buy is Sultanahmet – an ancient part of the city with all the major tourist sites a stone’s throw away. Expect to pay in the region of $1,500 per square metre for a property which needs work doing to it, to around $2,500 per square metre for a property which can be used straight away. If you are after a water view, double the square metre prices.

Foreign investors are limited to buying properties within the boundaries of a city, or village with 2,000+ residents. Foreign investors are not permitted to buy in a military zone. Expect the full buying process to take around six weeks and be prepared to pay a 10 percent deposit. Budget around 3 percent of your purchase price for estate agent’s fees, and around $1,500 for legal fees and taxes. It is advisable to ensure your property meets earthquake regulations, and you should take out earthquake insurance (around $1,000 a year).

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  1. Yasin Kaya | Jan 1, 2008 | Reply

    The capital city of Turkey is not Istanbul but Ankara. However, it can be assumed as if, except political view.

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