Istanbul Market Overview
The recent modernization of Istanbul’s residences — along with Turkey’s booming economy and the introduction of mortgages in 2007 — ushered in a property boom, according to Cameron Deggin, an owner of Place Overseas, a London-based real-estate consulting firm that specializes in Turkish property. From late 2004 through late 2007, property prices rose — in some cases by 50 percent, in others by more than 100 percent, depending on quality and location, Mr. Deggin said.
Foreigners can get financing—up to 70 percent — but most buyers tend to pay in cash or obtain financing in their home country, as interest rates in Turkey are high.Today, prices throughout Istanbul vary widely. Villas along the Bosporus (the strait that divides the European and Asian parts of Turkey) can be upwards of $10,000 a square meter ($929 a square foot), said Keith Boyle, an agent at Beyoglu Apartments Real Estate. A historic fixer-upper starts at about $500 a square meter ($46 a square foot), while a nice apartment in a prime area with views can run $6,000 a square meter ($558 a square foot), he said.
Despite a global economic downturn, Turkey’s economy is still growing, according to Feroze Bundhun, managing director of CB Richard Ellis Turkey, a real estate research company. So is Istanbul’s population, as well as its demand for property. Though the volume of residential sales has slowed over the past year, prices have not dropped significantly, he said.
Who Buys Property in Istanbul?
The majority of foreign buyers are English, followed by a mix of French, Germans and Americans, Iranians and Gulf Arabs, Mr. Boyle said.
Most foreign buyers seek property in Istanbul’s established districts along the Bosporus, in Nisantasi and Bebek. In these neighborhoods, real estate prices are often given in several currencies — for instance euros, British pounds, United States dollars and Turkish lira. Many buyers have either business or familial connections to Turkey, Mr. Deggin said.
Buying Basics
Foreigners seeking to buy property in Turkey must be citizens of a country that reciprocates by allowing Turks to buy. An American can buy a Turkish home, for instance, because Turks are allowed to buy property in the United States.
There are additional restrictions, though they are largely irrelevant in Istanbul: Foreign buyers are restricted from buying properties larger than 2.5 hectares (6 acres) or in certain rural areas, said Ayse Ozcan, the director of Acacia International Legal Services, a London-based legal firm that specializes in Turkish law. They may not own more than 10 percent of the land in a town or a province subject to zoning.
Buyers should estimate 5 to 7 percent of a property’s price for purchase-side costs, Mr. Deggin said. This figure includes a 3 percent stamp tax, title and registration fees, lawyers’ fees (roughly $1,500), and the 3 percent buyer’s fee that many agents charge.
All foreign buyers must obtain military clearance. The process is generally a formality (“I’ve yet to see one declined,” Mr. Deggin said) and costs about $600, though prices vary by region. The clearance process can take up to seven months, though for properties in Istanbul, it’s typically one to three months, Ms. Ozcan said. Earthquake insurance is mandatory for property owners. Prices vary, Ms. Ozcan said.
Useful websites:
Istanbul City guide: www.istanbulcityguide.com
Istanbul Governor’s Office: english.istanbul.gov.tr
Who buys in Istanbul - Article taken from The New York Times
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