In Turkey there are rules that govern who can and who cannot buy freehold property. The rules are based on the principle of reciprocity – i.e., if a foreign national wants to buy a home in Turkey, and if that individual’s home nation has rules in place that would allow a Turk to buy property in that country, then in theory the foreign national will be able to buy a property in Turkey.
However, as has been demonstrated in recent months, the principle of reciprocity is not always so clear cut and simple to define, and this has led to problems restricting certain buyers entering the market.
Fortunately Turkey has realised that it has effectively been holding back the advancement of its real estate economy as a result, and now the property market in Turkey is broadening its appeal…
One of the few areas of the world left where there is an intensification of wealth and an ongoing lust for investment, development and advancement is the Middle East…and yet Turkey has had its doors closed to many nations and states in the GCC region simply because it was insisting on this principle of reciprocity being in place before it would allow any foreigner the right to buy a home in Turkey.
The simple short-sightedness of this limitation became glaringly obvious when King Abdullah bin Abdülaziz of Saudi Arabia wanted to buy a massive tract of land overlooking the Bosphorus recently. As Saudi Arabia does not allow foreign nations such as Turks the right to own freehold title to real estate, Turkey’s laws prevented the King’s transaction going ahead.
At the time the government made a special provision to allow the King to buy – but this really hammered home the fact that there is intense desire amongst GCC nationals to acquire land and real estate in Turkey, and that by preventing them from doing so, Turkey’s property sector is being artificially deflated.
As buyers from Britain, Ireland and Germany become a little more conspicuous by their absence thanks to the terrible state of the economies in each nation, so the Turkish authorities know they have to look elsewhere for their property lira or face the prospects of a very harsh winter. Which is why finally there is an effort underway to review the principles of reciprocity.
At the same time, the appeal of Turkey is being more widely publicised and promoted across the Middle East. In a recent in depth article in Gulf News, the residential property market in Turkey came under intense analysis. Everything from the underlying fundamentals supporting the advancement of the market to the potential rental yields achievable were discussed.
We believe that for the long term health and development of Turkey’s property sector, it’s probably a good thing to open the market to Middle Eastern property dollars and to look more closely at where the marketing and promotion of Turkey’s property market appeal will reap the greatest dividends. And for those who have already bought in, it is more likely to mean that the market continues to develop and advance, that prices will remain stable and possibly advance, whilst many markets around the globe are not going to fare so well over the short to medium-term.