Istanbul is a gigantic city with an abundance of historical and cultural assets as well as ample commercial opportunities and, as such, the city can compete with other metropolises such as Moscow, Paris, London, Tokyo and New York. In 2012 Istanbul was described as the most promising city for investment in real estate. The number of modern shopping centres increased from 44 in 2000 to 284 in 2011.
Strategically situated on the crossroads of Europe, the CIS countries, the Middle East and Asia, Turkey has easy access to 1.5 billion consumers. The country is a major energy corridor and serves as a terminal connecting Europe, Central Asia and the Middle East. This favourable position attracts an increasing number of enterprises from abroad.
A young population with a rapidly increasing income
60% of Turkey’s population is under 34 years old. Mortgages rose from TRY 3.5 billion in 2004 to TRY 68 billion in 2011 and are estimated to rise to the value of 15% of the GDP.
Several studies and publications, such as that of “Emerging Trends in Real Estate Europe”, a joint study by PricewaterhouseCoopers (PWC) and the Urban Land Institute (ULI), show to what extent the local and global interest in the Turkish real estate sector has increased. According to the report, which was published in 2012, Istanbul is the most attractive market in Europe for investment in the areas of existing and new estate property and opportunities for development, followed by Munich, Warsaw, Berlin and Stockholm. By now, Turkey has worked itself up as the third most attractive country for real estate investment in 2012, according to a study carried out by the Association of Foreign Industries in Real Estate (AFIRE).
As Turkey continues on its way to EU membership, recent reforms have made investing in real estate easier and more profitable. Only recently, the Turkish parliament passed a law that facilitates foreign investors to buy land and real estate in Turkey.
In a corridor chat during a conference in Istanbul, the Turkish Minister of the Environment and Urban Development said: “Turkey is an excellent country for foreign investment. New legislation in which the principle of reciprocity has been abolished will make it easier to acquire property. This will enable residents of other countries to purchase any kind of property, including houses and office space.”
The quantity of land a foreigner is allowed to possess will also be substantially increased, the Minister said. The current limit of 2.5 hectares (25,000 m2) will be increased to 30 hectares (300,000 m2). The bill makes a plea for the abolishment of the principle of reciprocity which excludes residents of 89 countries from owning real estate in Turkey if Turkish residents do not have the same right in the potential buyer’s country. The figure of real estate transactions with non-Turkish residents increased to $ 2.5 billion in 2010. Experts have it that this figure could easily be more than doubled when more foreigners are enabled to buy property in Turkey.
The legislative changes in land registration, mortgages, and redrafting of fiscal laws are also intended to improve the position of Turkey’s real estate sector as a competitor on the international property market.
Turkey’s sound banking sector, the strong construction sector with its good reputation all over the world and the constant, strong demand for housing, both private and corporate, provide this sector with strong impulses for further development.