The market in shock!

Jan. 19, 2009 - PRLog -- How does this affect you?

"We have already seen some estate agents go to the wall, and it is quite likely that we'll see further job losses. We are in the lucky situation that we can move some people to other parts of the business, and otherwise we are planning new viewing trips as usual in the spring. I don't think that Turkey or the other Mediterranean countries will be less popular among Norwegians in the years to come. I look at this more as a break."

Alf Grønneflåta and Property-Key has been selling holiday homes in Turkey for eight years.

Why Turkey?

"It is actually a combination of coincidences. I was there as a tourist and saw that it was a very interesting country, not only because of the property market, but also because of its wealth of historical monuments and charm."

How were things it in the beginning?

"It was slow at the start. Many Norwegians had probably been there on holiday, but the thought of buying property there was new to them. But in 2004 - 2005 it took off, also in Norway, although of course the English and Germans still make up the majority."

How was the market doing before the financial crisis set in the autumn?

"It has been quiet this last year. This is mainly caused by three things: First of all, the rising popularity of several new markets such as Thailand, Brazil and Croatia, and secondly, of course, the problems in the world economy. The third reason is that they have built too much, just like we have seen in Spain."

What has happened to prices?

"Prices have declined somewhat, and new developments are put on hold. But I am really surprised that prices have not gone down more."

How is the situation for the developers?

"Most of the developers I know will probably have enough funds to ride the storm out, but I am sure that some feel worried. Especially in Alanya where there are several big projects being built. In the Bodrum area 60% of the buyers are British, and if they stop buying there will be trouble. But there is also the rest of the European market, in addition to all the new-rich Russians who are still willing to buy."

What areas are the Norwegians most interested in?

"There are lots of Norwegians in Alanya, but many have also bought in Bodrum and Ismir. Otherwise, the Norwegians are scattered everywhere. Previously, we had an office in Alanya and sold about 30 to 40 apartments around there, but we now concentrate mostly on Foca, Izmir and the Bodrum areas."

What is the first thing you should think about when buying a holiday home?

"First, you should consider what you want to get from it. Do you want to live in a small town or a big city, do you want to be near the sea? Are you going to rent it out or live there yourself? Are you going to use the property in the summer? Then you may perhaps look for a place far north on the coast, where it is not quite so hot.
If you are planning to use it in the winter you should buy further south. The coast of Turkey offers numerous possibilities. You should look at several options, not just one."

Some practical tips?

"I would say the most important thing is to find a legitimate estate agent. Many people have lost money trying to sort everything out themselves. It is not necessary "to invent gunpowder" when others already have the necessary knowledge and expertise. An estate agent from your own country is a good idea, somebody with professional knowledge and your interests at heart. Remember that "agents" in the Mediterranean areas do not have the financial responsibility of for example a Norwegian estate agent. From 2007 the law here has tightened so that Norwegian brokers can no longer operate as agents."

What sort of problems are most common?

"Many people pay too much in advance, when they buy off plan, without seeing anything completed, and without guarantees. Many developers do not own the ground they build on, something that also can cause problems if the buyer is not aware of it. It is important to find out when you can get the deeds to the property. This can take a long time. It is not unusual for it to take from three months to a year. An alternative would be to buy something that is already built. This way you avoid many of the problems. But there will always be some degree of risk when moving into a foreign market, "says Grønneflåta.

Here is some more advice:

Use a reputable estate agency with experience and knowledge of laws and regulations, and in Norway choose one that can set the necessary security for the customer's money.

Ask more questions when you buy a property abroad than you would do at home, not fewer.

Be careful with prepayment.

Ask for assurances regarding ownership. Find out what sort of procedures and guarantees are in place to ensure you get your deeds.

Check that the contractor is solid. Ask to see other projects the developer has built.

To read more articles go to IPB-Magazine.com

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