"Crisis might be good for Turkey"

Jan. 19, 2009 - PRLog -- How has the property market in Turkey developed in the last few years?

"The Mediterranean coast of Turkey has long been popular with foreign tourists, who are drawn here by the long warm summers and mild winters. Especially the area around Bodrum, Fetiye and Marmores has been popular, as well as Antalya and Alanya. But Side, which was just a small village, first became popular in the 90's, when we had a big influx of Germans buying holiday homes here," says Davut.

We are sitting in his office at Kaya Homes fancy new headquarters, talking over a cup of coffe.

"Then in 1995 Thomas Cook and Thompsons started package holidays to this area and little by little the British and Dutch started to invest in property here. We first started building for this expanding market in2002-2003, where as previously, we had mainly just built for the Turkish market. This has been a huge success and in the last two years alone we have sold over 400 apartments."

Is Turkey a good place to invest?

"Prices in this area have gone up 20-25% in the last 3 years. In 2006 you could buy a three bed apartment for 75,000 euro, now we are selling the same properties for 101,000-109,000 euro, but you can still buy a small two bed apartment for 60,000 Euros. A villa will cost you about 280-350,000 Euros. You can also make good rental income from these properties."

What about the current market and the economic down turn?

"We believe that the current crises will only benefit Turkey. People don't trust their local property markets or banks, and this will create an opportunity for us. Placing your money in land or a property is always safer. It is something concrete that is there and won't go away. Also a lot of people are re-locating and Turkey is, according international newspapers, one of the most popular countries."

So, haven't you seen a slow down at all?

"No, we haven't. We have just started a new development and sold 10 apartments in the first two weeks, even before the foundations were dug," he says smiling.

How are building standards and regulations in Turkey?

"After the earthquake in Istanbul in 1999, the government has become very strict. Before building permission is given, the local authorities check that the land is safe to build on. Independent companies, who only report to the government, make checks through the different stages of the build, taking samples of the concrete and steel. You have to pass all the checks to get a permission for habitation. You will also get a 15 year structural guarantee and 2 years internal guarantee. This is all very good for the industry in Turkey. If a developer cuts corners, he won't be able to complete the development and will lose lots of money."

Are finishing standards generally good here?

"We rank well compared to countries like Bulgaria and Spain, and we have had very good feedback from our customers. It is important to hire qualified craftsmen, you could get it done cheaper, but this will only cost you more in the long run. We use the same contractors over and over, because they know the standard we expect. We also have one foreman and two inspectors at all times on every development we do."

Are there any restrictions on what a foreigner can buy?

"As an individual you can't buy more than 25,000sqm of land, but if you establish a company you can buy more. There are also some countries citizens that can't purchase properties in Turkey. Like Romanians, Iranians, as well as citizens from Iraq and Syria. This is because Turkish citizens can't purchase in these countries, so the government operates on a tit for tat regime. There also has to be a military check, to make sure the plot of land isn't near any army bases. This takes about six months."

We spoke to some buyers in Bulgaria who were having lots of problems with their managing agent. They were paying very high charges, which they felt were unjustified, as well as not getting things fixed. What are you doing to ensure this doesn't happen?

"We encourage our buyers to form residency committees in all of our complexes. This way they can control what and how much needs to be paid for things like pool maintenance, communal lighting and up-keep. We always promise our customers to be only a phone call away, so if there is a problem, we can rectify it straight away. Customer satisfaction is key to our company's success. We believe that one happy customer will bring more, which has been our experience so far.

"We also understand how difficult it is when you are buying in a foreign country. People need a lot of help and we feel responsible, so we help our customers to get a Turkish tax number, which you need to open a bank account, buy a car etc. We also spend several days taking them around to shops to help them furnish their property."

What are your thoughts on Turkey joining the EU?

"The government wants to be part of the EU as soon as possible, but I think it will be a long process, perhaps 7-10 years before Turkey will join. It isn't just about fulfilling criteria, but has a lot to do with politics. The government here is considered to be a moderate Islamic party, but they have made many constitutional changes to allow foreigners to invest. And people here very much want to join the EU, hoping that it will improve their living standards."

How do you think it will affect your business?

"It is good for us and good for investors, because when we finally join property prices here will go up. So this will help to create a buoyant property market."

With so many property investors buying, aren't you worried about overdevelopment?

"Not really. The government has placed a lot of restrictions on building. You can only build three floors and not use more than 25-30% of the plot. Alanya was spoilt by over building, but the government has learnt from this and are trying to prevent this from happening in other areas."

Some warn against buying in Turkey, do you know why this might be?

"No, I don't," says Davut shaking his head. "Turkey is very safe and has many good opportunities. Regulations are strict and a developer can't build without all the necessary permissions, so I don't see why. It is not like Spain where the Government still owns the land and can take it away from you just like that. This is not the case in Turkey. If you buy an apartment in a complex with 20 apartments, you will own a twentieth share of the land as well. The land and the property are yours forever."

Finally, do you have any advice to potential buyers?

"When you find a property you wish to buy, make sure you get a copy of the title deeds and make sure it matches what is written in the contract. Make sure you buy from a good developer with a good track record, and it is also a good idea to talk to others who have bought from the same developer. This is very sound advice," says Davut.

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