Property | Gulf

Turkey makes strong case for its property market

Wooing GCC investors with sweet deals and visa incentives

  • By Manoj Nair Associate Editor
  • Published: 13:49 March 21, 2013
  • Gulf News

Dubai: Red-hot investment flow chasing safe haven property assets was one consequence of the Arab Spring and Dubai realty still remains a beneficiary from it. But Turkey – and its developers – do not want the fund flow to be headed exclusively in one direction.

Last year, Turkey spread out the red carpet for investors from the Gulf by making changes to the property law. This allowed, for the first time, certain nationalities – the UAE, Kuwait, Saudi Arabia and Kuwait among them – to acquire real estate in the country for the first time. Last week, Turkey also announced that residence permits for foreign buyers will be raised from three months to one-year.

“Since May last, when the bill removing the condition of reciprocity in land sales came into effect, foreigners have purchased around 19,000 properties in Turkey,” said Vedat Asci, chairman of Astas Holding, a Turkish developer who is now intent on acquainting prospective UAE investors with its new projects. “In May alone, foreign real estate acquisitions in Turkey reached $1.1 billion (Dh4.04 billion), four times the total amount in 2011.

“There is an increase in investments, especially from the Middle East with the Arab Spring. The ‘hot’ funds are of short-, middle- and long-range investments.

“Of course, the crisis in Europe has attracted more investments to Turkey, increasingly seen as a safe haven. The government aims to boost foreign investments further in 2013-14 by backing the reciprocity law and expanding the period of stay in Turkey on a tourist visa as well as easing the procedures for residence permit.”

The timing of Astas’s exploratory push into the Gulf could also have consequences for Lebanon. GCC investors have historically played a key role in the country’s property market through the various bouts of strife that Lebanon has experienced. Now, given the gravity of the ituation in Syria, the Gulf’s property buyers are weighing the consequences of having Lebanon as an investment destination, at least in the mid-term.

According to data from the real estate consultancy Savills, property values are on the rise in Turkey. “The markets of Istanbul and Bodrum in particular are strong; property prices and rental values are increasing helped by an opening up of the mortgage market,” said Joanna Leverett, head of new developments, residential international, Savills. “Housing loans increased from 3.5 billion Turkish lira in 2004 to 81 billion lira in Q3-2012.

“The Turkish economy is a standout positive story in Europe at the moment with GDP growth of 4 per cent expected this year.”

The latest benchmarking study on global property picks by IP Global has a top listing for Istanbul. IP Global lists the Turkish city’s prospects as “bright” alongside Munich, Berlin and London. Hamburg, Paris, Zurich and Stockholm are rated as “fair”.

“The German real estate markets are underpinned by a diverse economy and a rapid population growth; old favourites like London and Paris are still prominent investment havens, and Istanbul is still one to watch for with strong economic potential as global companies continue to set up bases there,” said Paul Preston, regional director of IP Global.

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