A shocking statement by one of Turkey’s newspapers Hurriyet reads:

“Turkish property sales to foreigners are to be temporarily halted from Wednesday, declared a Ministry of Public Works and Settlement inline with a Constitutional Court ruling three months ago. A new regulation was delivered to the Board of Ministers for approval.”

This is in addition to the restriction of foreign companies owning land.

This ruling has come as a shock to the industry considering the lackluster market in traditional areas such as Spain and the subsequent shift of interest to Turkey, coupled with the release finally of Turkish mortgage products, and the ever improving chances of Euroland entrance, one has to ask what are they thinking?

“It’s still ok for Turkish nationals to buy property, but as a personal opinion, this is only likely to force prices down, and in turn slow development of infrastructure, something I am sure even the local government would state still needs work.” said Peter Mindenhall, Business and Media Manager; Propertyshowrooms.com

The region of Istanbul has suffered from these laws on and off for some years now, and whilst attaching an element of risk to any investment there, people have still invested in the area with hopes of the booming expat population, all that seems to under some question now.

Some $3 Billion USD has been generated for the country in the past 3 years by the sale of Turkish property to foreigners, many of which were looking to sell at a profit on completion, or eventually retire to the region.

The Government has made no indication of how long the suspension is set to last, leaving investors in a sizeable amount of uncertainty. Turkey's full entrance to the EU is likely to come into question as a result now with the inflexible residential arrangements that would now have effect.

All of this will impact heavily upon the local business both Turkish and expatriate, rumors are rife that the law won’t really take effect for another 6 months and will only concern certain regions, but the statements from the local press and government offices are difficult to doubt.

If you would like to discuss the implications of this move by the Turkish government further with others that are affected, please visit our Turkish forum and take part in our online poll.