Points of Controversy in Turkey on Foreign Home Ownership
The foreign purchase of real estate is a widely discussed subject in the Turkish media and among the public. Some of the opinions put forth in this context may not be based on sound facts, while others are results of in-depth studies. Opponents of liberalisation and internationalisation of the real estate market in Turkey also made allusions based on interpretations of evolutions in Spain and Israel.
Another issue which will inevitably arise is the concern over the specific case of Greek nationals. Despite EU pressures, a national land registry system in full legal clarity is yet to be fully established in Greece (except in the Dodecanese, where the system was set up during the Italian rule between 1912-1945). Thus, a legal move questioning whether there could be reciprocity with a country without a land registry system was indeed launched under the auspices of opposition CHP party, before the application covering the new law in general was made to the Constitutional Court and set the agenda. The issue will almost certainly not be dismissed easily by proponents of a liberal property market. In addition, there are also occasional reports of a more sensational nature, usually specific to some sections of the media. These relate to Israeli or Arab investors buying land en masse in the prospering Southeastern Anatolia Project region, politically-minded purchases in the Black Sea region or in Eastern Anatolia, where sizable communities of Pontic Greeks or Armenians previously lived.
The challenge for the Turkish government will be to negotiate a path which satisfies the sceptical elements within Turkish politics and among the public, while at the same time appeasing liberals and satisfying the open-market criteria which the E.U. expects from Turkey as it moves towards accession.
On a more specific and strictly professional focus, the ongoing efforts by Turkey's real estate agents to demarcate the definition and the boundaries of their profession and to discourage occasional and non-professional intermediaries away should also be mentioned. The compulsory norms to be respected in order to exercise the profession are still rather recent (since 2004). Real estate agents are required to be members to and exhibit their membership of the association set up for their region (such as Kusemder for Kuşadası, or Maremder for Marmaris). These local associations are gathered within the framework of the national federation, Temfed, which provides a full list of the regional associations.
Foreign Ownership Market Data under the new legislation
After the annulment of the 2003 Law in July 2005, during the 6-month period of legal uncertainty, the market (focused on foreign buyers) understandably came to a standstill. However, local Land Registry Offices continued to process applications in anticipation of the new law. 2006 and 2007 data indicates that the market took off to a clear and vivid boost.
Information on overseas buyers provided by the First Economic Counsellor of the Turkish Embassy in London for 2006 was as follows:
Britons were the first in buying property in Turkey among foreign nationals in the first quarter of the year according to the latest data released by the Land Registry Office. From 7 January 2006 when the new law was put into effect, to mid-April 2006, 588 British Citizens purchased 420 properties in Turkey. Secondly 265 Germans bought 258 properties in Turkey. In the same period, total property sale to foreigners and total foreigners bought property in Turkey reached 1,206 and 1,565 respectively. (25 April 2006)"
The newspaper Cumhuriyet reported on 11 June 2006 that, since the 5/1000 limit was exceeded in Hatay Province, sales to foreign nationals of real estate located in that province was suspended until further notice. The congestion is a consequence of 1300 parcels of property that have been bought in recent times by foreign nationals adding up on the 2400 land lots owned by Syrians, some of them quite large. The particular case of Hatay put apart, as of 1 June 2006, Antalya Province was in the lead in the number of foreign purchases of real estate in Turkey with 5566 lots sold, provinces of Aydın (3998), Muğla (3035), İstanbul (1463) and İzmir (722) occupying the following places.
The most recent data provided by the Ministry, covering the period from 2002 (when the incumbent government came into office) to 2008 indicates a total of 63,085 land lots sold to 73,103 foreign private persons, extending to a total area of 25,350,361 square meters. As such, a total of seventy four seventy five thousand foreign nationals own an area of 38,623,661 square metres (415,741,630 sq ft) of lands in Turkey. As of 2007, on area basis the provinces of Muğla (4,445,259 meter squares), Antalya (3,810,118 meter squares), Aydın (3,001,075 meter squares) came in the lead. On the basis of the number of foreign nationals acquiring property, the situation was as follows: Antalya (26,031 foreign nationals), Muğla (12,865 foreign nationals), İstanbul (8,830 foreign nationals), Aydın (7,415 foreign nationals), Bursa (5,241 foreign nationals), İzmir (4,145 foreign nationals). German nationals came the first in Antalya Province and British citizens in Muğla and Aydın Provinces. Purchases by Greek nationals displayed a striking preeminence in İstanbul and, in a more recent trend, in Bursa.