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The New York Times / The International Herald Tribune
September 28, 2012 Friday
Turkey's Opening Comes With Catch
By JON GORVETT
ISTANBUL -- Recent changes to Turkey's real estate laws that allow
more foreigners to buy property have given a boost to sales.
Yet, even as lawyers and real estate agents confidently say the
changes will increase Turkey's attractiveness to foreigners, new visa
regulations and uncertainty about residence permits may prove
difficult for buyers intending to visit their new homes.
The revisions, which were passed in May but only came into effect Aug.
18, add citizens of 130 countries to the previous list of 53 whose
citizens may buy residences or limited amounts of land in Turkey. (The
final list is awaiting approval by the Turkish cabinet. Until then the
newly added citizens must wait, though it appears some sales have
moved forward regardless.)
The changes also make it easier for subsidiaries of foreign companies
to buy real estate in this Eastern Mediterranean country.
Over all, agents say, the changes could give a welcome fillip to the
high-end real estate sector, where activity has been steady this year
even though demand from traditional buyers in Europe has been held
back by economic concerns.
''This is very important for us in the sector and for the economy as a
whole,'' said Arman Ozver, general manager of Sotheby's International
Real Estate in Istanbul. ''In 2009, foreigners spent around $1.5
billion on Turkish real estate. We are now expecting at least four or
five times that figure in 2013.''
The latest figures from the Turkish Economy Ministry show that, from
January to July this year, real estate sales were up 7.6 percent from
the period last year.
The increase is widely credited to local residents and foreigners
already allowed to buy who are making purchases now with the
expectation that prices will increase as demand rises.
Until now, only citizens of countries allowing reciprocal real estate
purchasing rights for Turkish citizens, like Britain, Germany and the
Netherlands, were allowed to buy in Turkey.
Onur Gulsaran, a partner at the Istanbul law firm Cerrahoglu, said,
''individuals from many more countries -- mainly Arab and Central
Asian ones -- will now be able to buy in Turkey without reference to
reciprocity.''
In the past those foreigners could buy only after setting up a
Turkish-registered company, which would purchase the property. It was
not a popular procedure.
The latest figures from the General Directorate of Title and Title
Registries show that, as of end of August 2012, Bahrainis owned just
eight properties in Turkey and Saudi Arabians, 53.
In contrast, the figures show some 38,691 properties directly owned by
Germans, the largest group of foreign property owners, and 1,182 by
U.S. citizens.
Yet now, ''the Arab states alone have the potential to add a further
$2 billion to the Turkish real estate market,'' said Hakan Yener,
Turkish district council coordinator for the Urban Land Institute, a
nonprofit education and research organization. ''Demand from them is
likely to be more in high-end projects and Bosporus-side mansions.''
Isik Gokkaya, chairman of the Turkish Association of Real Estate
Investment Companies, added, ''It's expected that there will be an
increase in projects specifically targeting Arabs in the longer
term.''
Opening to Arab buyers could allow Turkish sellers to take advantage
of the turmoil in the region. ''The numbers of people coming from the
Middle East could rise a lot,'' said Orhan Yavuz Mavioglu, a managing
partner and real estate expert with the Istanbul law firm ADMD Law.
''The region is boiling and everyone is trying to leave.''
''We closed three deals last week alone, all from Middle Eastern
countries,'' Mr. Ozver of Sotheby's said. ''Because Turkey is close to
that region, both geographically and culturally, it is easy for them
to come here.''
Russians also are free to buy now, a change that is expected to see
house sales increase in areas already popular with that country's
tourists, like Antalya and the southern Turkish coast.
When it comes to land, a foreigner from one of the approved countries
now can buy as much as 300,000 square meters, or almost 75 acres, of
land. That is an increase from the 25,000 square meters previously
allowed, provided the buyer shows evidence that he intends to build on
the purchase within two years.
Previously, a foreigner also needed permission from the military,
granted on a case-by-case basis, to buy land.
The latest list of countries whose citizens are allowed to purchase
land or properties -- the list that is awaiting cabinet approval --
maintains at least some of the previous restrictions when it comes to
citizens of Greece, a neighbor that has a long history of strained
relations with Turkey.
Residents of Armenia, which is not recognized by Turkey, continue to
be denied any right to buy.
The second major change in the law allows Turkish subsidiaries of
foreign companies where the foreign share is less than 50 percent to
have unrestricted purchases. Previously, the foreign share of a
company had to be just 10 percent or less.
Yet despite optimism among some brokers and industry observers, others
point to a major drawback: troubling new visa rules.
''Previously, a visitor from Europe or the U.S. could come here on a
90-day tourist visa, leave for a day and then come back for a further
90 days,'' said Mr. Gulsaran of the law firm Cerrahoglu, which also
specializes in immigration issues. ''If you wanted to buy here, but
not be resident, this was fine.
''Yet earlier this year they also changed the visa rules so you could
only stay here for 90 days in every 180 days,'' he added. ''And if you
are from a non-Western country, that period is even smaller.''
In addition, ''the local police still decide in Turkey if you will get
a residence permit, and owning a property here is still no guarantee
you will get one,'' said Mr. Mavioglu of ADMD Law.
''This is the missing link,'' said Mr. Ozver of Sotheby's. ''It should
be made very easy to get a residency permit if you buy a house, and
the Turkish government must come up with some solution to this.''
A temporary stay of the change, introduced after many foreigners had
to leave the country in February, expired in August with no new
regulation in place. ''The government will have to do something,'' Mr.
Mavioglu said. ''I mean, why would anyone buy a house here, if they
couldn't stay in it?''
URL: http://www.nytimes.com/2012/09/28/greathomesanddestinations/28iht-returkey28.html
September 28, 2012 Friday
Turkey's Opening Comes With Catch
By JON GORVETT
ISTANBUL -- Recent changes to Turkey's real estate laws that allow
more foreigners to buy property have given a boost to sales.
Yet, even as lawyers and real estate agents confidently say the
changes will increase Turkey's attractiveness to foreigners, new visa
regulations and uncertainty about residence permits may prove
difficult for buyers intending to visit their new homes.
The revisions, which were passed in May but only came into effect Aug.
18, add citizens of 130 countries to the previous list of 53 whose
citizens may buy residences or limited amounts of land in Turkey. (The
final list is awaiting approval by the Turkish cabinet. Until then the
newly added citizens must wait, though it appears some sales have
moved forward regardless.)
The changes also make it easier for subsidiaries of foreign companies
to buy real estate in this Eastern Mediterranean country.
Over all, agents say, the changes could give a welcome fillip to the
high-end real estate sector, where activity has been steady this year
even though demand from traditional buyers in Europe has been held
back by economic concerns.
''This is very important for us in the sector and for the economy as a
whole,'' said Arman Ozver, general manager of Sotheby's International
Real Estate in Istanbul. ''In 2009, foreigners spent around $1.5
billion on Turkish real estate. We are now expecting at least four or
five times that figure in 2013.''
The latest figures from the Turkish Economy Ministry show that, from
January to July this year, real estate sales were up 7.6 percent from
the period last year.
The increase is widely credited to local residents and foreigners
already allowed to buy who are making purchases now with the
expectation that prices will increase as demand rises.
Until now, only citizens of countries allowing reciprocal real estate
purchasing rights for Turkish citizens, like Britain, Germany and the
Netherlands, were allowed to buy in Turkey.
Onur Gulsaran, a partner at the Istanbul law firm Cerrahoglu, said,
''individuals from many more countries -- mainly Arab and Central
Asian ones -- will now be able to buy in Turkey without reference to
reciprocity.''
In the past those foreigners could buy only after setting up a
Turkish-registered company, which would purchase the property. It was
not a popular procedure.
The latest figures from the General Directorate of Title and Title
Registries show that, as of end of August 2012, Bahrainis owned just
eight properties in Turkey and Saudi Arabians, 53.
In contrast, the figures show some 38,691 properties directly owned by
Germans, the largest group of foreign property owners, and 1,182 by
U.S. citizens.
Yet now, ''the Arab states alone have the potential to add a further
$2 billion to the Turkish real estate market,'' said Hakan Yener,
Turkish district council coordinator for the Urban Land Institute, a
nonprofit education and research organization. ''Demand from them is
likely to be more in high-end projects and Bosporus-side mansions.''
Isik Gokkaya, chairman of the Turkish Association of Real Estate
Investment Companies, added, ''It's expected that there will be an
increase in projects specifically targeting Arabs in the longer
term.''
Opening to Arab buyers could allow Turkish sellers to take advantage
of the turmoil in the region. ''The numbers of people coming from the
Middle East could rise a lot,'' said Orhan Yavuz Mavioglu, a managing
partner and real estate expert with the Istanbul law firm ADMD Law.
''The region is boiling and everyone is trying to leave.''
''We closed three deals last week alone, all from Middle Eastern
countries,'' Mr. Ozver of Sotheby's said. ''Because Turkey is close to
that region, both geographically and culturally, it is easy for them
to come here.''
Russians also are free to buy now, a change that is expected to see
house sales increase in areas already popular with that country's
tourists, like Antalya and the southern Turkish coast.
When it comes to land, a foreigner from one of the approved countries
now can buy as much as 300,000 square meters, or almost 75 acres, of
land. That is an increase from the 25,000 square meters previously
allowed, provided the buyer shows evidence that he intends to build on
the purchase within two years.
Previously, a foreigner also needed permission from the military,
granted on a case-by-case basis, to buy land.
The latest list of countries whose citizens are allowed to purchase
land or properties -- the list that is awaiting cabinet approval --
maintains at least some of the previous restrictions when it comes to
citizens of Greece, a neighbor that has a long history of strained
relations with Turkey.
Residents of Armenia, which is not recognized by Turkey, continue to
be denied any right to buy.
The second major change in the law allows Turkish subsidiaries of
foreign companies where the foreign share is less than 50 percent to
have unrestricted purchases. Previously, the foreign share of a
company had to be just 10 percent or less.
Yet despite optimism among some brokers and industry observers, others
point to a major drawback: troubling new visa rules.
''Previously, a visitor from Europe or the U.S. could come here on a
90-day tourist visa, leave for a day and then come back for a further
90 days,'' said Mr. Gulsaran of the law firm Cerrahoglu, which also
specializes in immigration issues. ''If you wanted to buy here, but
not be resident, this was fine.
''Yet earlier this year they also changed the visa rules so you could
only stay here for 90 days in every 180 days,'' he added. ''And if you
are from a non-Western country, that period is even smaller.''
In addition, ''the local police still decide in Turkey if you will get
a residence permit, and owning a property here is still no guarantee
you will get one,'' said Mr. Mavioglu of ADMD Law.
''This is the missing link,'' said Mr. Ozver of Sotheby's. ''It should
be made very easy to get a residency permit if you buy a house, and
the Turkish government must come up with some solution to this.''
A temporary stay of the change, introduced after many foreigners had
to leave the country in February, expired in August with no new
regulation in place. ''The government will have to do something,'' Mr.
Mavioglu said. ''I mean, why would anyone buy a house here, if they
couldn't stay in it?''
URL: http://www.nytimes.com/2012/09/28/greathomesanddestinations/28iht-returkey28.html