Impulse buying isn't advised
By James Roberts

Gulf investors warned about impulse buying Turkish property

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Normally the goal of a real estate exhibition is to encourage investors to buy property, but one expert at the recent Cityscape Global event wasn't there with the intention to blindly sell. Instead, Tolga Han, international vice-president of Projebeyaz International, told Arabian Business at the exhibition that Gulf investors should be cautious when buying Turkish real estate. Indeed, he stressed that while the country presents plenty of opportunities for investors, people could also be ripped off.

Impulse buying isn't advised and jumping in without doing any research could leave some buyers being taken for a ride. "Whatever they want to buy, they must consult," Mr Han told the news provider. Currently, there is around $3 billion (£1.9 billion approximately) investment in Turkish property from the Gulf. However, this is set to soar as changes in regulations make it easier for overseas buyers to obtain property in Turkey. Mr Han told Arabian Business that over the next five years he hopes this will increase to $10 billion.

This doesn't appear to be an unachievable target either and 15 per cent of total sales at Projebeyaz now come from the Middle East - a number that is hoped to increase to 50 per cent over the next three years. However, in Istanbul the market is tight. Although price growth now averages between 12 and 14 per cent, it is still cheap at around $2,500 per square metre and demand is high. Off plan projects could double over the next two years and the minimum gain will be 15 to 20 per cent. Rental returns will also average about seven to eight per cent annually. While this is below what many investors would hope for, the market is growing and in the coming years there are plenty of opportunities to be had.

The Turkish government certainly now understands the importance of attracting foreign investment and Justice and Development Party officials told a recent workshop that overseas buyers that surpass average income levels should be the main targets. Environment and urban planning minister Erdoğan Bayraktar stated that creating new regulations to ease off on bureaucratic obstacles would benefit Turkey.

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