Real estate brokers anxious for new real estate law

Wednesday, November 2, 2005

Real estate agents are becoming impatient after Fiance Minister Unakıtan last week said that Parliament will soon pass a law allowing foreigners to buy property in Turkey

THOMAS GROVE

ISTANBUL - Turkish Daily News

In the face of the prolonged wait for Parliament to pass a new law that will allow the resumption of property sales to foreigners, real estate agents are becoming dour as their busiest season slips away.

“It would have been great if they could have passed the law last week,” said Murat Şahin, a real estate agent in Cihangir. “Fall and spring are our busiest seasons.”

Şahin deals mostly in property around Cihangir, an area of the city center popular with foreign residents. A previous law regulating foreign ownership of property in Turkey was rescinded in 2003 on fears that foreigners were buying too much. Fuat Ekinci, owner of Susam Real Estate, said that if a new law were to be passed now his business would grow by 40 percent.

Last week, Finance Minister Kemal Unakıtan said the hold up is mostly because of negotiations over restrictions on the kinds of property foreigners can buy. The current bill allows individual foreigners to buy no more than 10,000 square meters. Foreign businesses can buy no more than 50,000 square meters. Furthermore, purchases cannot be made in areas considered strategically important for security, agriculture, energy, irrigation or public use. Foreign ownership of property in any province cannot exceed 0.5 percent of the total area of the province, according to the bill.

Some foreigners, however, have found ways to get around the moratorium and possible future restrictions.

“We have a number of foreign acquaintances who buy property in their Turkish friends’ names,” said Ekinci.

Despite the controversy, foreign interest in Turkey’s property market continues to grow.

According to Eurohypo AG, a leading European real estate investment bank, yields on investment in Turkish property far outweigh investment in comparable properties in western Europe. According to the bank’s head, Hartwig Glatski, a shopping center in Istanbul returns a profit of 15 percent, compared with a yield of 5 or 6 percent in western Europe.

Hüseyin Çelikten of Duru Emlak in Istanbul said that, in order for Turkey to attract foreign businesses, government policy regarding private property ownership will have to change. “This is a globalizing world,” said Celikten in an interview in his office. “Foreign investment in real estate has to be opened up so we can compete.”

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