| Turkey: Last year's real estate sales to foreigners up by 40 pct to $2.5 bln |
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06/04/2011 04:05 (420 Day 17:09 minutes ago) | |||||
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The FINANCIAL -- Real estate sales in Turkey to foreigners increased by 40 percent, reaching $2.5 billion, in 2010, Real Estate Investing Partners Association (GYODER) President Işık Gökkaya said on April 5, according to Today's Zaman.
He also mentioned that İstanbul topped the list in terms of real estate sales in the “Emerging Trends in Real Estate Europe, 2011” report, jointly released by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI). “The amount of real estate sales could be easily doubled [to reach $5 billion] when we solve the reciprocity issue since the confidence in Turkey is steadily increasing,” Gökkaya added.
Moreover, the GYODER president also touched upon the investments affecting the construction sector in Turkey and highlighted that the sector grew by 18 percent in the past year. According to Gökkaya, the construction licenses given by state authorities rose significantly, by 35 percent, in 2010, surpassing 817,000, which is all-time record. He noted that İstanbul, Ankara, İzmir, Antalya and Bursa where the provinces were the most mortgage loans were given. “Our prediction for this year's construction sector was it will grow by 8 to 10 percent.
Meanwhile, Professor Can Fuat Gürlesel, who prepared the GYODER report on the fourth quarter evaluations of Turkey’s real estate sector, underlined that the growth in mortgage loans is expected to slow down when interest rates rise again. “I think the monthly interest rates on mortgage loans will come closer to 1 percent as of the second quarter of this year, but could exceed 1 percent after the second quarter if banks do not subsidize some part of this rate,” he said. “This will slow down loan growth in Turkey.”
The central bank raised the banks’ short-term lira reserve requirements by 500 basis points to 15 percent on deposits of up to one month in order to curb “hot money” inflows late March. The decision drained TL 19.1 billion ($12.2 billion) of liquidity from the market. The policy adopted by Turkish Central Bank Governor Durmuş Yılmaz is seen as a way to restrain demand by slowing credit growth -- consumer loans had jumped about 40 percent in 2010. As a result of these measures, banks will have less funds to allocate for loans.
Commenting on the precautions taken by the central bank, GYODER Board Member Emre Çamlıbel underlined that interest rates on loans will need to rise as an outcome of central bank measures. Board member Cemal Onaran, who also spoke at the press conference, said he expects credit growth will be around 25 percent this year despite the rise in interest rates.
The report “Emerging Trends in Real Estate Europe, 2011” showed that İstanbul ranked first for both new acquisitions and developments and second for existing investments in 2010. “Economic troubles haven’t had the same impact on İstanbul’s commercial real estate as they have had on other European locations,” the report said. “For those investors who selected industrial as the preferred investment for any city, the majority chose İstanbul. Its strong performance can also be explained by investors’ reasons for optimism about investments in the city. As noted, the general sentiment for most of Europe is that investment successes will be achieved despite stagnant underlying fundamentals through careful stock selection and asset management. In the case of Turkey, those investors who remain fans do so because of the underlying fundamentals,” the report noted, adding that it is one of the few markets where investors remained confident in the city rather than in their own ability to buck the general trend through superior real estate investment skills.
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