Turkey Cooking Up a Low-Cost Feast for Off-Plan Property Investors
Neatly positioned at the halfway point between two boom areas of off-plan property investment - the Middle East and Western Europe - Turkey isn’t necessarily a country associated with real estate opportunities.
But interest in Spanish property, which grew into interest in off-plan opportunity in Eastern Europe, particularly Bulgaria and parts of the Balkans, is apparently spreading east, where off-plan prices are among the lowest on the continent.
Traditionally seen as ‘where worlds collide’, Turkey has a rich, diverse culture thanks to its position between Europe and the Middle East.
A predominantly Muslim country, Turkey benefits from eastern and western influences thanks to the westernisation of the Ottoman Empire. Home to around 70million people, it boasts Turkish baths, famed markets and, surprisingly to some, skiing as well as world-class beaches.
Mortgage restriction lifted
Turkey is not yet an EU member state, with negotiations dating back decades, although theoretically the country could join the EU in 2013. However, some officials put the timeline at more likely 15 to 20 years (PDF), meaning this spike in the value of any new property might not arrive for some time.
However, EU membership or not, there are some excellent opportunities springing up, and, as Turkey does start to advance its application, value is likely to increase steadily.
While Turkey has just banned foreign companies from property speculation in the country, nothing has changed for the individual property investor. In fact, a long-standing turn-off for investors, restrictions on foreigners taking out Turkish mortgages, were lifted a year ago by the Turkish government.
Apartments at £30,000
There are now a host of apartment deals available in Turkey, with prices starting around the £30,000 per unit mark.
The Viewpoint, Fethiye, is a typical example. A development of 310 apartments, one to three-bed, overlooking Fethiye, it will include a communal pool, 24-hour security, a bar and restaurant, sauna and fitness centre, with easy access to the town centre - hard to resist at a starting price of £41,700 per unit.
According to the shelteroffshore.com blog, Istanbul is a good spot for instant gains on your sale price. Apartments in Istanbul Kozyatagi, close to the business district of the capital, are therefore hot property and two-bed apartments here are £55,000 to include security, indoor pool and private parking.
With some firms claiming £40,000 ‘worst case’ scenario profits on £80,000 investments in apartments, sky high could be the way to go, with similar developments in Buyukcekmece, Istanbul, offering one to two-bedroom apartments at a jaw-dropping £29,000 apiece. With 1,285 units available in this development, to be completed in May 2009, a bulk investment could mean bulk profit.
If flats are not your thing, £65,000 will bring a beachside villa in Akbuk, near a planned marina. Part of a new development, White Beach Village, a private beach is only a few minutes away and the sea is always in view thanks to a sloping design.
Bodrum is a popular development spot and Bodrum Yalikavak is a hot spot for bargain off-plan villas. Here, £67,000 will get you a sea view two-bed villa 200m from the sea. Again security, a communal pool and private parking are as standard.
Big gains for smaller budgets
Of course, EU membership aside, there are some factors the shrewd investor will want to take into consideration before buying property in Turkey.
For starters there is a three percent value tax, a one-off payment on completion of the deal. Then there are solicitor fees, starting at about £200, plus other factors such as earthquake insurance, compulsory in Turkey.
Due to the new mortgage law only being a year old, the mortgage market in Turkey is limited, although developing rapidly. Also, there is no ‘cooling off ‘period after signing your reservation contract in Turkey. As a foreigner, you will also need ‘Military Permission’ in order to own a home, though this is not usually a problem - it ensures owners are right and proper people and are not buying property in a militarily sensitive area.
However, these factors and the usual checks aside, Turkey is undoubtedly a prime spot for property investment, particularly for those with a limited budget looking for off-plan developments. The recent law changes, particularly in relation to ownership and mortgages, now make the country more than just a western holidaymaker hot-spot but a genuine area of opportunity for off-plan property investors.
