Foreign sellers to up Turkish market competition

ISTANBUL

Local real estate sector is to face miscellaneous situations as new codes to boost the market while the European crisis is to strike, sector player says. Company photo

Foreign property owners in Turkey, who have been hit by the European economic crisis, will try to sell off their assets in 2013, warming up market sales, the head of a Turkish real estate group has told the Hürriyet Daily News.

“I expect a boost in real estate sales to foreigners thanks to the recent reciprocity code adjustment. But Europeans who already own properties in Turkey will try to sell-off their properties due to the European crisis,” the Vice Chaiman of Çağdaş Group Burak Çağdaş said.

The recent legislation change in taxation for real estate properties might also damage the sector due to the increase in prices and the complexity of some of the changes introduced with the code, he added.

The new value added tax (VAT) law, which will especially impact small luxury houses located in metropolitan areas, will bring an increase in the tax on luxury houses, but there is confusion about the concept of “luxury,” which has still yet to be defined precisely. Before the licensing process starts this confusion should be eliminated, Çağdaş. said, adding that foreigners set their preferences while choosing houses or hotels based on the price, size and privacy.

The winners of the changes in the sector will be the prestigious housing projects, he said. The Group has been attracting many foreigners, particularly Russians, with its recent agreement with Turkish hotel chain Swissotel. If they want, the property owners of the groups’ houses will be able to rent their houses to Swissotel, which will then be able to rent to other customers.