ARIF – Foreigners switch to buying homes from producing in Turkey

Foreigners switch to buying homes from producing in TurkeyForeign investors preferred to purchase homes rather than companies or embarking on manufacturing ventures in Turkey, figures for 2014 reveal.During the first 10 months of the year, out of $9.

8 billion worth of incoming capital, $3.5 billion was invested in real estate.

A total of 36 percent of all foreign investment came in the form of housing purchases during the first 10 months of 2014, and that percentage increased later in the year, as 64 percent of foreign investments in October went toward housing purchases.According to figures from the Turkish Land Registry Directorate (TKM), foreigners purchasing real estate during the first 10 months of the year in 2014 increased to 20,000, up from 8,000 during the same period of 2013.

While 29 million square meters of real estate was purchased during that period in 2013, that figure totaled 52 million this year Out of this figure, nearly 2 million square meters of real estate was purchased by 5,081 citizens from Gulf countries. Figures provided by Eva Real Estate Appraisal and Consultancy President Cansel Turgut Yazici indicate that Gulf investors prefer to purchase real estate in the provinces of Istanbul, Yalova, Sakarya, Bursa, Kocaeli and Trabzon.

All except the latter are in the western part of Turkey. On the other hand, European buyers generally prefer to purchase property in the Aegean and Mediterranean coastal regions.

Housing sales across the country rose by 11 percent year-on-year to 103,783 in November, with a 09 percent increase in homes sold with a mortgage in the same period, according to a Turkish Statistics Institute (TurkStat) report released on Tuesday.After sustaining losses for seven consecutive months in 2014, the recovery in housing sales continued in September after picking up in August.

TurkStat data concerning nationwide developments in housing sales showed that the ownership of 115,726 houses changed hands in the ninth month of the year, marking a 13.2 percent increase over the same month of the previous year This figure was a staggering 25 percent in August.

Despite the recovery in August and September, however, sales were still down 36 percent in the first three quarters compared to the same period a year ago. As of the end of July, home sales in the first seven months of 2014 were 98 percent down from the number for the January-July period of 2013.

Meanwhile, while 131 companies were founded with capital exceeding $500,000 between January and October of this year, only 20 percent of these were manufacturing firms. According to tax expert Yusuf KeleI, major incoming capital that has reached Turkey in the last period is invested for short-term profit rather than long term purposes.

Govand#39t pressure hits incentive-based investmentsAmid increased tax inspections, profiling and other pressure from the government, Turkish businessmen are directing their investments elsewhere, figures show.In the month of October, 1,035 incentive-based investment certificates were cancelled, accounting for a total value of TL 41 billion.

Meanwhile, the number of new incentive-based investment certificates issued in October was only 293, bad news for the Turkish business climate as foreign investment has slowed and local businessmen are setting their sights abroad. During the January-October period, 3,313 incentive-based investment certificates were issued, marking a significant drop compared to the same period of 2013, where just under 4,000 of these certificates were issued.

The governmentand#39s investment incentive program, which was announced in June 2012, seeks to maintain economic growth by increasing the quality and quantity of investments made in the country. Incentives within the program are categorized based on the sector and region in which the investment will be made to help balance out regional disparities in development.

The program divides provinces into six categories based on the current level of economic development and the investment opportunities they offer The first category, mainly western provinces, is the most developed, while the sixth category includes the least developed regions, particularly in the eastern and southeastern parts of the country.

SOURCE: Today’s Zaman