Foreign demand for real estate in Turkey on the rise

Demand for villas by the Bosphorus in Istanbul skyrockets.

Interest from foreigners in real estate sector in Turkey has substantially increased in the recent years. Strategic location, cultural wealth and similar characteristics of Turkey have truly contributed to this situation.

How does the situation for Turkey look like in 2012?

It seems that 2012 is going to be a difficult year for the real estate sector in Turkey.The World has apparently been going through a hard period, in terms of economy and politics. Moreover, financial crisis in Europe has caused most of the concern felt in the financial sector.

When we look at the Middle East and Africa we can see very strong political unrest. When these negative factors add up it is not easy to realize 2012 is expected to be an unfavorable experience for many sectors.

Hence, it would not be easy for Turkey integrated to the World to keep away from it, should this this undesired experience come true in 2012.

Expectations about the real estate sector and luxury houses in 2012

Turkey is a very unique market. In spite of the negative picture in general, there are some indications as to 2012 could be a very productive year as far as the real estate is concerned.

Law of reciprocity could be a miletone for Turkish real estate sector

We know many foreign businessmen who would like to make investments in Turkey paid visits to this country in 2011. Most of those were members of royal families from Middle Eastern countries, rich business people from Russia, Azerbaijan, Kazakistan etc…

Most of those were members of royal families from Middle Eastern countries, rich business people from Russia, Azerbaijan, Kazakistan etc… It was easily observed that these potential buyers follow the real estate market in Istanbul as well as in southern Turkey, carefully. They send over their authorized personnel to conduct researches about projects, prices, locations for weeks and even months.

It goes without saying the new law of reciprocity for purchasing of real estate for foreigners will contibute substantially to this sector, as this was a big obstacle for foreigners to grow interest in the Turkish real estate sector.

In fact, many top income groups to include the companies owned by members of the royal families in the Middle East were waiting for this law to be passed. Thus it is expected that the Money to come into Turkey within a couple of years will increase by multiple folds after the law is passed in the parliament.

How is the demand increase expected to effect prices?

The situation today is foreign buyers are well informed about the local market in Turkey when they come over to buy and it would not be a recommendable idea to try to offer them excessively high prices.

The reason is if the seller quoted high prices he might end up with much fewer sales.

Talking about luxury houses in Turkey are seaside villas by the Bosphorus in demand?

The Bosphorus is one of a kind location in the World with about 60 seaside houses. It is a sign of great prestige to be living in one of those houses which enjoy great demand from wealthy foreign buyers, in specific.

Most of these potential buyers already own houses in prominent destinations such as London, New York and Southern France and they would like to have a place in Istanbul as well, much preferably by the Bosphorus. To be more interesting they would like to buy those houses to live there for a week or more only in a year.

There is also a practice that these houses can be rented by professional service companies when not used by the owners, as is the case in cities like London, Miami, Corsica.

Prices of houses by the Bosphorus

This is quite different depending on the background/history, architecture and certainly location which all effect pricing.

We can easily be referring to a US$ 100 million worth house here which might be considered “not large enough” by such buyers, for instance. This applies to buyers from royal families, Russia, Azerbaijan etc, in specific. In other words money is not “important” for such customers.

Destinations that draw most attention

These people can feel they are not far from their culture, in Istanbul because this city has such as richness of culture etc. It has so much to offer and something for everybody.

Istanbul and certainly Aegean, Turkish Riviera (Antalya) enjoy most attention from such potential buyers.

Editor, BTT
16.02.2012