A slew of terrorist attacks plotted by the so-called Islamic State (ISIS), a failed coup attempt on July 15, poor performance of the Turkish lira against the U.S. dollar—it is hard to claim that 2016 was a good year for Turkey. Despite of the chain of unfortunate events of last year, the stability that Turkey has gained in the last 15 to 16 years has not been dramatically affected. Yes, we’ve struggled… The fear of going into a dark tunnel with no light at the end has increased as well as criticism that Turkey is now facing a dictatorship, but last year’s general election and the referendum of April 2017 have proven that the Turkish people want stability and have no intention of giving up on the gains of the last two decades.
The gains I’m referring to are multi-dimensional, not just economic (like the GDP’s stable increase) or social, and they’re helping to shape a new national identity and new lifestyle, as well.
Real Estate—The Sector Driving Turkey’s Growth
According to official figures, the manufacturing industry contributed 16.7% of GDP in 2015, down from 17.1% in 2003, the Justice and Development Party’s (AKP) first full year in power. The construction and real estate sectors, meanwhile, accounted for about 15.8% of GDP in 2015, up from 12.5% in 2003. Investment spending on construction is lifting values in almost every
sector, particularly in household durables and related services, as well as increasing activity in various service sectors such as real estate, finance, and transportation. Direct and indirect construction-related spending has reasonably accounted for about 40% of real economic growth from 2010 to 2016.
Urban renewal and megaprojects dominate the agenda for the foreseeable future, particularly in Istanbul. Some mega projects in this megacity include the Marmaray rail project, the Istanbul Canal, the third Bosphorus Bridge, and Istanbul’s third international airport, projected to be the largest airport in the world.
Adding to the urban renewal and megaprojects, growing population, increased income per capita, and ease of buying property are driving rapid growth of Turkey’s real estate sector. Real estate is playing a dominant role in the national economy and Turkey’s position in the international arena. Through 2015 to the beginning of 2016, the property market in Turkey, particularly in Istanbul, was doing explicitly well, as evidenced in articles published in The Telegraph and Global Property Guide, just to name a few. On the other hand, after the first quarter of 2016, and especially after
the failed coup attempt in July 2016, the market slowed down for international buyers. Despite the drop in foreign buyers, the number of sales in Turkey increased compared to 2015. In fact, the local market has not slowed down…
Number of House Sales (2015–2016)
Source: Turkish Statistics Institute (TUIK)—
Published on Jan. 24, 2017
Domestic buyers have been crucial to Istanbul’s rise. More than their Western European counterparts, Turkish investors have a preference for property over more liquid assets such as equities. Falling interest rates have helped make new home loans affordable. Real estate’s share in total bank loans is quite large and continues to increase. The Banks Association of Turkey says the share of real estate loans issued through financial institutions was 37.7%. A sharp fall in real estate business could push the Turkish economy into trouble.
Courting FDI
One of the key recommendations from the Organisation for Economic Co-operation and Development (OECD) published in July 2016 was for Turkey to “reduce barriers to foreign direct investment.” This helps explain why the Turkish government has decided to attract overseas property investors by loosening regulation on visa applications, as well as easing the path to citizenship.
On Jan. 12, 2017, a new regulation was published in the country’s Official Gazette (T.C. Resmi Gazete) stating that if a foreigner buys a property valued at US$1 million or higher, then the owner will be eligible for citizenship.
Applicants who meet two conditions, listed below, are eligible to apply for Turkish citizenship straightaway…
• The owner cannot sell the property for three years. In other words, the applicant/owner cannot transfer the Title Deeds (TAPU) to another person.
• The value of the property/properties must be assessed by the Ministry of Environment and Urbanization (Çevre ve Şehircilik Bakanlığı).
Applications to obtain citizenship can be done directly with the Governorships in the major cities or with the local District Governorships in the districts/counties. Applications can be done through some private agents/firms and also through a solicitor, the latter being highly recommended. The application process should take four or five months, from submitting the application
to getting the result. A criminal background check is required. This program is a unique opportunity, particularly for Middle Eastern middle-class families concerned about the uncertainty in the region. Istanbul, for example, is an ideal destination for them, as they can freely practice their religion while enjoying a Western lifestyle with their families and securing their children’s future. In Turkey, they can send their children to top-class schools and universities and access first-rate health care. Being a citizen of Turkey opens new doors for business, too, as Istanbul is turning into a crucial finance center and gateway between two worlds. Turkish citizenship means having room to maneuver both, and to reap the rewards accordingly.
Evren Erem was born in Istanbul, Turkey, in 1961, and holds a BA and MA in classics from Istanbul University. He moved to the U.K. in 1996, obtaining a Ph.D. in linguistics at Manchester University. He has worked as a research assistant at Istanbul University until 1996. Since 2001, he has been in the private sector (mainly in real estate and property management), and is now with Universal21 & VIP Property, where he’s been since 2013.
Source: Simon Letter July 2017
