Istanbul Yusuf Yüregil is actually mayor, but now he feels like a real estate agent. Almost every day the head of the village of Ge on the Turkish south coast drives to the district office. People from all over the world buy land in his village, including Germany and France for example. However, the plots in the village are less popular than the large-scale fields in the area. “Almost half of all fields around the place have been sold,” says Yüregil, “and at prices like those in the larger tourist resorts.”
A real estate boom set in in Turkey during the Covid-19 pandemic. This not only increases the risk of a bubble. As early as September 2019, the Istanbul stock exchange described “explosive behavior” on the Turkish real estate market in its own study. But the boom continues, despite the pandemic.
In the three summer months alone, properties with a total value of 89 billion lira (9.6 billion euros) changed hands. Prices rose by an average of 35 percent during this period, and in some provinces by as much as 82 percent. This is shown by data from the Turkish real estate exchange Gaboras. According to this, the demand for properties under 10,000 square meters, which are primarily in demand by private individuals, has increased rapidly.
The village of Ge, whose name the residents pronounce like “Gää”, could hardly be more picturesque. At an altitude of 700 meters, the village near the city of Fethiye with around 30 stone houses forms the beginning of a rugged peninsula that bears the name “Yediburun”, in German it means “The Seven Noses”. The approximately 50 inhabitants are all shepherds or school children to this day.
Over some dramatic rock formations it goes down to the Mediterranean Sea. From the village you can see the sun set over the sea all year round. You can also hear the waves crashing against the rocks from above. Small bays with stone beaches have emerged where they have made their way. Hiking trails now lead there. Nevertheless, the area was largely spared from tourism – at least so far.
Decades ago, extensive tourist centers with resorts and private beaches emerged both around 50 kilometers further north and south of the village. In the wake of the pandemic, more and more people apparently want to go to the countryside.
A worthwhile investment and space in itself
Penelope Sieper sees several reasons for the rapid increase in the Turkish real estate market. “Many properties are cheaper compared to France or Spain”, explains the real estate agent from Property Turkey from Bodrum, an already developed tourist region in Turkey. In addition, the other Mediterranean countries in particular were severely affected by the corona pandemic and are now again. The number of cases in Turkey is currently 2000 per day, with even the government now assuming five times the number of actual infections.
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While foreigners also benefit from the weak lira, residents can currently get extremely cheap loans from domestic banks. The pandemic has also created a new trend away from apartments to houses with gardens, away from the big city, says Sieper. “We are looking for both: a good investment and more space for yourself.” Her company conducted a survey of its own buyers and found out that in this case it is the worthwhile investment that moves people to buy a property in Turkey to buy.
You can see that in the prices. A French couple built a 2500 square meter house on the peninsula in 2011 with double sea views in two directions. The property cost 10,000 lira. At that time that was just under 5000 euros, today the equivalent would be around 1150 euros. Today you have to reckon with at least 150,000 lira (17,000 euros) per 1,000 square meters, sometimes up to 300,000 lira (32,000 euros). This corresponds to an increase of 60 times in less than ten years. At the same time, the lira has lost more than 75 percent of its value during the period.
It’s easy to do the math: real estate is particularly worthwhile for Turks who want to protect themselves from a further currency decline. This explains why, despite economic difficulties during the pandemic, the demand for land is increasing.
With digitization against botched property purchase
Another reason may be that the country’s government has made it much easier to buy real estate. Anyone who wants to buy a property in Turkey has to face the country’s excessive bureaucracy. At the same time, you can enjoy an almost completely digitized city administration, even in the farthest corners of the country.
Once the seller and buyer have come to an agreement, one of the two sides will make an appointment with the property office via the Internet. For this, the ID numbers of both parties are required, which in turn are linked to the respective mobile phone number.
If the date is confirmed, both buyer and seller will receive an SMS with the date and time for the official sales date. Shortly before the appointment, both of them receive another SMS with a code for the property tax. It is four percent of the property’s value and half is to be paid. The officers use the code to automatically see on their computers whether the transfers have been received.
Only from now on does it continue offline. In the “Akit Odasi” (sales room) both sides have to confirm that they are willing to buy or sell by their own will. A surveillance camera records everything. Then the transfer of the purchase amount is commissioned, then signed. Ten minutes later, the buyer has the land deed in his hands.
But anyone who has a plot of land in Turkey is far from being allowed to build a house. This requires a special permit in which everything is precisely defined: number of floors, ceiling height, distance to the neighboring property and the maximum floor area, which rarely exceeds 20 percent of the property size.
Such a permit is often missing, especially for agricultural land. Nor is it granted simply. Anyone who builds anyway risks a heavy penalty. In some cases, the city council even sends a demolition company over and razes the illegal construction to the ground – at the owner’s expense.
Many property owners are hoping for a building amnesty
Nevertheless, many are now taking the risk. Around the village of Ge one can see more and more shell structures, excavators and deliveries of cement sacks. The term “Kacak Yapi”, the illegal construction, is used more and more frequently in conversations in the only tea room in the village.
“First of all, we are building illegally,” says someone there who has just become a property owner. He is sure that many are doing this right now. And that politicians have no choice but to tolerate it for the time being. He doesn’t want to give his name, but does express his hope: “We are waiting for the next building amnesty.”
There was already one in 2018. At that time tens of thousands of illegal buildings in the country were legalized by fee. The outcry was great, also because houses in forests and nature reserves as well as unchecked buildings had been subsequently approved. The government, in turn, is making itself popular with the rising middle class and with builders. Those responsible in Ankara called the project “Imar Barisi”, in German “Baufrieden”.
The village mayor Yüregil can hardly resist the trend. Because he sells cement and other building materials in his main job, he earns money from the semi-silk construction boom. The new property owners, on the other hand, are playing for time – to be precise until 2023. “In three years at the latest, there will be elections,” says one in the tea room, “by then there will certainly be another amnesty.”
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