For years Turkey’s holiday towns of Bodrum and Marmaris have been popular with holidaymakers. But now the possibility of buying homes in Turkey is causing many people to look again at the country.
An increasing number of property buyers keen to find investment property at more affordable prices are looking for flats and holiday homes for sale in Istanbul.
The ancient link between Europe and Asia and the only city to straddle two continents, Istanbul has been is famous for its Blue Mosque the capital of the Ottoman and the Byzantine Empire over the centuries. Imbued with history and romance it might be, but this vast metropolis with a growing population of nearly 15 million is now a forward looking, modern city attracting young people and international companies.
Although there is still some political volatility, the growing prospect of EU membership has boosted the Turkish economy. Inflation has fallen to its lowest level for 30 years and Gross Domestic Product has grown 7.4% per year since 2002.
It’s Getting Easier to Buy Property in Turkey
A land registry has now been established to help verify and regulate ownership and restrictions on foreign purchasers buying real estate Istanbul have been relaxed. British buyers are now the second largest group of foreign property owners in Turkey and PriceWaterhouseCoopers ranked Istanbul top for development prospects in its 2007 Emerging Trends in Real Estate Europe report.
Despite rapidly rising prices off-plan apartments are available in large suburban developments for as little as £25,000. These developments are popular with middle class Turkish buyers and investors. Areas such as Umraniye and Atasehir on the Asian side of the city and Bahcesehir on the European side are attractive areas to buy Istanbul real estate. Other, more central districts of the city are also on the up, albeit slowly.
The prices in Istanbul are similar those you could find in parts of France, Spain and Italy 10 years ago so there is a lower price entry point for investors. People are also getting more adventurous these days and looking beyond Bulgaria and the Balkans which naturally brings them to Turkey, according to property developers Regnum LINK which specialises in Turkey.
Property ownership is low in Istanbul and young people are increasingly coming to work in the city so there is always potential in the rental market – especially for studios or one bedroom flats in the suburbs.
Holiday Homes in Istanbul
Older houses in the city are also now being refurbished. The Akaretler project in the Old City near the Bosphorus strait involves the redevelopment of a group of 19th century houses once used by craftsmen building a palace for a Turkish Sultan. Neo-classical in design, they are part of a shopping development. In the city that invented the shopping mall with the centuries old Grand Bazaar this is a common practice.
New shopping malls are being built at a rapid rate. Currently there are roughly 179 with more on the way. In these areas demand for residential property is outstripping supply.
Once regarded as a second world city, Istanbul is working to improve its residential accommodation. According to property consultants King Sturge, LINK demand for quality stock remains strong, fuelling price rises. This is, in part, a recognition that much of the older housing stock is of poor quality combined with a greater understanding of the risk of earthquakes but it is also fuelled by increased wealth.
The mortgage market is only just starting in Turkey but this situation is likely to improve very quickly, experts believe. Typical interest rates are about 5.9 to 6 per cent and the normal loan to value ratio is 75 per cent. Bear in mind, though, that the range of mortgage products will not be as wide as in the US or UK.
Tax and Real Estate Investment in Turkey
Purchase fees amount to approx 3.5% of the property value. The principal taxes include personal income tax in either Turkey or the UK as well inheritance and succession tax. Properties are subject to the Istanbul equivalent of Council Tax – rates vary here. If an owner sell real estate within four years they will also have to pay capital gains tax in either Turkey or the UK.