An interesting article in the Sunday Zaman on the Real estate market:
Link:
http://www.sundayszaman.com/sunday/...tay&link=140227Closure case exacerbates slowdown in property sales
Estate and land agencies have dropped prices approximately 20 percent to cope with the current market slowdown.
Turkey's real estate market has received a blow from the political and economic instability resulting from a closure case opened against the ruling Justice and Development Party (AK Party).
Foreigners are now more hesitant to buy property in Turkey. Real estate agents argue that the closure case only exacerbated the problems the real estate market had already been facing.
Although this slowdown of the real estate market is also associated with concerns over instability and a possible economic crisis in the event the AK Party is closed, experts argue that the problems of the real estate market started far before the closure case. Broker Gökhan Üçgün, who works for a firm partnered with the Remax Antalya central office, told Sunday's Zaman in a telephone interview that the real estate market was already in trouble before the closure case. "The case might have played a role, but I don't think it is a direct influence. Interest rates on housing loans, global recession and the excess supply are far more significant," he added.
Speaking to Sunday's Zaman by phone, Nevzat Tilkici, the chairman of the Fethiye Real Estate Agents Association, made a similar comment, saying that the real estate market has already sustained a serious blow from the recent global recession. "Property sales to foreigners dropped by 40 percent in 2007, and sales will decrease further by 10 to 15 percent due to the Constitutional Court's recent ruling that freezes all property sales to foreigners," he noted.
There has been news that foreigners disturbed by the current atmosphere of instability who already own properties in southern Turkey in particular are rushing to sell their properties.
However, Tilkici states that foreigners are not that panicky at all. "Some of them [foreigners] might be selling their properties, but that has nothing to do with the current situation. They are selling due to personal reasons," he says.
Seref Sa&glam, the chairman of the Antalya Union of Real Estate Agents, agreed, noting, "The market saw a slowdown due to several reasons, but people are not panicky."
Real problem is process of buying property
According to Sa&glam and Tilkici, the real issue is the waiting period for title deeds. He says after foreigners pay a deposit for property, the process to acquire the title deed takes so long that people began to feel anxious.
In Turkey, after you make the down payment, approval of the armed forces unit responsible for the region the property lies in is then applied for. Upon approval, the title deed is then transferred to the buyer's name and the purchase is completed.
"All the real estate sales along the southern coastal line require the approval of the Aegean section of the army. They check whether the piece of land or property a foreigner buys is a location with any strategic importance. But this approval process takes a very long time, thus making foreigners feel insecure," Tilkici adds.
Furthermore, estate and land agencies have dropped prices in order to cope with the market's current slowdown. Üçgün noted that real estate prices have decreased approximately 20 percent in the last few months.
However, Adnan Yesiltas, the chairman of the Association of Marmara Real Estate Dealers (MAREMDER), speaking to Sunday's Zaman by phone, argued that the real estate market can overcome this slowdown if the problems are addressed as a whole and if the government acts swiftly to solve the problems.
Another factor curbing property sales is the "pirate real estate agents," of which the numbers have increased recently, according to Tilkici. "As the real estate market provides high returns, many people, even those who have nothing to do with this market, try to work in this sector. They make many mistakes such as not giving title deeds in a timely manner and so on."
Meanwhile, upon a question whether the closure case on Turkey's EU bid could frighten away foreigners, Üçgün said: "It is true that some of the foreign investors are buying properties in Turkey with the hope that prices will climb when Turkey becomes a member of the EU; but I don't believe that the number of such people is significant."
"Besides, if we solve other matters, it would not matter whether or not Turkey is a member of the EU because Turkey is already a favored place and thus can attract foreigners," he underlined.
Countries such as Bulgaria, Croatia and Cyprus began attracting foreigners as they started providing cheaper properties. However, Üçgün underlined that global competition will always exist, saying: "Turkey, rich in nature, history and culture, has a lot to offer; therefore it will still attract foreigners who want to buy properties abroad."
The number of plots sold to foreigners in 2007 amounted to 18,800, while residences totaled 5,393. The Mediterranean province of Mu&gla comes second only to Antalya in the number of property sales to foreigners. Tilkici notes that approximately 5,000 properties were sold to foreigners in the region including the districts of Kas, Kalkan, Fethiye, Marmaris and Bodrum between 2006 and mid-2007.
Real estate agents believe that the real estate market can easily pick up after the problem of the Constitutional Court ruling that freezes all property sales to foreigners is resolved.
After the decision of the Constitutional Court went into effect, the government swiftly completed a new bill regulating such sales, and sources close to the government have said the bill will soon be passed in Parliament.
Tilkici says the real estate market could bounce back swiftly as soon as the ruling in question is dealt with, while Üçgün states, "We believe a 100 percent that the government will deal with this problem and that foreigners will again be able to buy properties."
27.04.2008
BÜSRA iPEKÇi iSTANBUL