Istanbul to grow as its steps nearer to the EU

A new report from Jones Lang LaSalle has found that despite the global economic slowdown, the residential market in Istanbul remains buoyant, with plenty of opportunities on offer for investors, especially approaching 2010 when the city will be named European Capital of Culture and may be a step closer to EU membership…

The shortage of available land in the centre of Istanbul has pushed up market prices, and forced residential developers to expand towards the city’s periphery. These emerging areas are being supported with planned transport links, while regeneration plans aim to move industrial production to the outskirts of the city to help the development of residential areas within the city centre.

Jones Lang LaSalle’s new report ‘Istanbul Real Estate Overview,’ showed that there was huge potential for long term growth.

Avi Alkas, Chairman of Jones Lang LaSalle Turkey, said, “The residential market in Istanbul has undergone rapid development over the last five years, and market drivers remain strong, creating further room for continued growth.

“The city offers huge potential with an expanding middle class and their strong investment intentions, ongoing migration into the capital, as well as the need to replace the existing earthquake-vulnerable stock. The global economic downturn may result in a slowdown of some luxury residential projects in the coming years, but demand from the middle classes is expected to remain strong,” added Mr Alkas.

Alan Robertson, Managing Director of Jones Lang LaSalle Turkey, said, “The global economic slowdown has caused a modest correction in residential prices but on the whole Istanbul’s residential sector is proving more resilient compared to other major cities around the world.

“The population is projected to reach 14.5 million by 2015, creating an estimated 1.18 million extra households and this potential growth means that major developers are continuing with large residential projects. The city’s combination of size, scale and location, strategic commercial position as well as strong retail market will also enhance the residential sector’s potential over the long term,” he added.

The Turkish Government, keen to encourage foreign investment, has already reformed aspects of the property buying process to make it more transparent and appealing to investors. Currently, the lack of an efficient mortgage funding infrastructure has caused an imbalance in the residential market. However, the mortgage market in Turkey is still in its infancy and shows strong potential for growth. The appeal of investment property in Istanbul is also set to increase as the city moves towards being crowned European Capital of Culture in 2010.

Apartments and townhouses across the most popular residential and historic areas of the city have seen up to 20 per cent growth year on year until now.

The World Travel and Tourism Council predicts that tourist numbers will continue to rise, so rental potential on a property in Istanbul looks set to be strong. The Government has pumped huge amounts of money into improving transport and infrastructure, which will attract more international tourists and investors. With the European Capital of Culture tag fast approaching, Istanbul is busy improving its cultural offerings. The local museums are now geared towards promoting the city’s European heritage, such as the installations by contemporary Turkish artists at the Istanbul Modern Museum and there are hopes that the European Capital of Culture title will help to progress Turkey’s bid to join the European Union.

In this vein, the Turkish Government is planning to take a number of ‘important steps’ regarding its EU accession process after the local elections at the end of this month, said the country’s Chief Negotiator for the EU membership talks.

Egemen Bagis said, “We are planning to take some important steps, constitutional amendments in particular, regarding the EU in cooperation with opposition parties after the local elections.”

Visas and Permits

When coming to Turkey, whether it is for a week on holiday or to live after buying property as a British and EU citizen you are required to get a visa.

Upon entering the country will have to purchase a sticker type tourist visa. These cost £10 (or €15-$20) per person and is paid in cash before going through passport control, make sure you have the exact money in notes (change is not given and coins are not accepted). Your tourist visa will be stamped with the date you entered the country allowing you to stay in the country for up to 90 days; during this time you can come and go as often as you like.

If you are planning on staying more the 90 days there are two different ways of extending your stay. Many people who wish to stay in the country for longer head over to one of the nearby Greek islands for the day. Kos is only 1 hour away from Bodrum by ferry, during the summer they depart everyday and during the winter (November-April) the travel 3 times a week on Monday, Wednesday and Friday. Tickets cost approximately 55TL (as of March 2009) and when you re-enter Turkey you can purchase another 90 day visa. There is no limit to the number of times you can do this but beware that staying once your visa has expired will incur a hefty fine.

If you are planning on staying in the country for long periods or for work you should apply for a residency visa. This can be done by either; applying through the Consulate General when you are in the UK, this must be done at least eight weeks before the intended date of departure; or you can apply while in Turkey. It is easier and cheaper to apply whilst in Turkey and you can apply at the nearest police headquarters after your 90 day tourist visa expires. This may seem like a daunting task but if you are a Cumberland Properties customer our after sales team is happy to help you with your application. For details on the costs and what documents you require for a residency visa please check the Turkish Consulate

If you are wishing to work in Turkey then you should apply at the Consulate General and will require a letter of job offer or employment contract on which the application could be based since work permit applications are always for a specific position and they are employer driven.

Applications should be made simultaneously by both you and your employer and can take up to 2 months or longer though you can usually start work while the application is being processed. Also you are also expected to get a residence permit within 30 day’s of entry.

Visas & Passports

• In general, visitors to Turkey need a visa.
• Visas may be obtained at the Turkish diplomatic representation outside Turkey.
• In most cases, a passport must be valid for at least 3 additional months from the date of entry to Turkey.
• EU citizens do not need a visa but a sticker-type entry visa must be obtained at the point of entry for a fee of £10-€15-$20
• There is an additional group of countries whose citizens may stay in Turkey on presentation of a passport only, without a visa, for a period of 1 - 3 months.

Residential Permits

• Residential permits for foreign residents are granted for a period of up to two years, with an option to extend.
• Separate residential permits must be obtained for the spouse and children of a foreign worker.

Work Permits

• Foreign residents who are interested in working in Turkey must obtain a work permit.
• A work permit may be obtained, subject to an investigation to ensure that the worker is skilled, and has no criminal record.
• The Turkish employer must deal with obtaining a work permit before the arrival of the employee.
• A work permit is usually valid for two years, with an option to extend.

Marmaray to bring prosperity to regions

Two major transportation projects, Marmaray and Anadoluray, will be in use in three to four years time on the Anatolian side of Istanbul, affecting the regions they are passing through. They will also have a “golden touch” on the residential sites right next to and surrounding the exits of stations.

Two giant transportation projects in Istanbul, Marmaray and Anadoluray, will connect the two continents of Asia and Europe and have a major impact on the real estate market.

The Marmaray Project is an underwater railroad tunnel between Üsküdar and Sirkeci. Anadoluray is the railroad joining Kadıköy and Gebze. Two different consortiums are building the projects. In addition to those, a metro system will connect Üsküdar to Çekmeköy-Taşdelen. Also, this metro line will reach out to Sabiha Gökçen Airport on the Asian side through Sultanbeyli and Kurtköy.

Once these projects are finalized, the city’s traffic problem is likely to be substantially relieved and at the same time several districts of the city will emerge as new property hotspots. Anadoluray and the metro line connecting Üsküdar to Çekmeköy-Taşdeşen will be finished in 2012.

Several lines that are being built on the Anatolian side are as follows: Üsküdar-Söğütlüçeşme-Gebze, Kadıköy-Kartal-Tuzla,Üsküdar-Ümraniye-Sarıgazi, Bostancı-İçerenköy-Dudullu,Üsküdar-Beykoz, Çekmeköy-Sarıgazi-Kurtköy.

Regions such as Ümraniye-Tepeüstü, Çekmeköy, Taşdelen-Alemdağ, Sarıgazi-Samandıra and Kurtköy will emerge as new hotspots of property. Tuzla, Pendik and Kartal on the E-5 highway will also prosper for being in the vicinity of the modern transportation system.

The rail transportation systems will definitely impact commercial property, realtors believe. RE/MAX Yıldız’s commercial real estate expert Ulvi Kocailik says commercial properties will prosper along the E-5 highway, Ümraniye Tepeüstü, Kozyatağı and Şerifali.

Fast connections, transportation and heating

Digital infrastructure is just as important: “Fast connections are important for companies. If transportation, communication and heating are not provided, then those areas cannot develop. When mass transportation is provided, then transportation of personnel is facilitated. Otherwise the property owner or the boss has to provide transportation to at least 30-40-50 staff members.”

This is the reason companies prefer to buy property from areas as close as possible to the transportation network. “Offices are extremely affected by transportation systems,” says Kocailik.

Rails systems will help develop regions such as Kozyatağı and Tepeüstü. “Commercial property will develop in these regions. Stores will be opened in places where pedestrian circulation will increase,” says Kocailik.

History of Turkey

Whether you are just coming on holiday or planning to buy property in Turkey it is always nice to know a little about the history of your host country. Here is a concise guide to the last 10,000 years.

Turkey or Anatolia, as the area was known in ancient times, has a fascinating history and its location between Europe and Asia makes it one of the oldest continually inhabited regions in the world. If you travel around you will find archaeological ruins and architectural treasures left over from successive civilisations like the Hittite city of Hattuşaş and the Library of Celcus at Ephesus to the Byzantine cathedral Hagia Sophia in Istanbul. Two of the wonders of the ancient world were situated in Turkey and the legendary city of Troy the centre of the Trojan War and there are hundreds of smaller sites scattered all across the countryside, even Bodrum has its own antique theatre and the ruins of the “Mausoleum of Maussollos”.

The story begins at Çatalhöyük where excavations found Neolithic settlements that date back almost 10,000 years; these were some of the first real communities of people and the rise of farming, domesticated animals and use of metal tools. Moving into the early Bronze Age, Akkadian’s and Assyrian’s exerted some influence but Anatolia was soon to become one of the busiest bits of real estate around.
Hittles, Persians, Greeks and Romans
The first major empire in Anatolia was that of the Hittites in the late Bronze Age from the 18th to the 13th century BCE who built up a civilisation rivalling that of the Egyptians and Babylonians before a gradual decline and collapse. Various civilisations arose from the old Hittite Empire in the 12th century BCE with the kingdoms of Lydia, Phrygia and Urartu each claiming a part of Anatolia while the Ionian Greeks settled the west coast giving birth to the great cities of Colophon, Smyrna and Ephesus. In the west the kingdom of Lydia captured or made agreements with the Greek cities and over time incorporated Phrygia into its domain while in the east The Urartu kingdom was conquered by the Median Empire. This all came to an abrupt end when in the 6th and 5th centuries everyone was conquered by the great Persian Achaemenid Empire.
In 334 BCE Alexander the Great created a huge army which swept across the peninsula destroying the Persians and spreading Greek rule. Upon Alexander’s death his empire was broken up and Anatolia divided into a number of small Hellenistic kingdoms which by the mid-1st century BCE had all succumbed to Rome. Under Roman rule Anatolia enjoyed a period of relative peace that allowed it to grow and prosper and in 324 CE, the Roman emperor Constantine I chose Byzantium to be the new capital of the Roman Empire, renaming it New Rome (later Constantinople and Istanbul). As the Western Roman Empire fell into decline the Eastern Roman Empire, known by historians as the Byzantine Empire, survived and Anatolia remained under its control for another 700 years.
The Turks and the Ottomans
The House of Seljuk was a branch of Turkic peoples who resided on the edge of the Muslim world and around the 10th century began migrating from their ancestral homelands towards the eastern regions of Anatolia. These eventually became the new homeland of the Turkic tribes and by 1071 marked the end of Roman control. In 1243, the Seljuk armies were defeated by the Mongols and the power of another empire slowly disintegrated. In its wake, one of the Turkish principalities evolved into the Ottoman Empire, thus filling the void left by the Seljuks and Byzantines.
The Ottoman Empire interacted with both Eastern and Western cultures throughout its 623-year history and in the 16th and 17th centuries it was among the world’s most powerful political entities. Spanning three continents, controlling much of South-eastern Europe, the Middle East and North Africa it was in many respects, an Islamic successor to the Eastern Roman (Byzantine) Empire. Following years of decline, the Ottoman Empire entered World War I through the Ottoman-German Alliance in 1914, and was ultimately defeated. After the war, the victorious Allied Powers sought the dismemberment of the Ottoman state through the Treaty of Sèvres.
Ataturk and the Republic
The occupation of İstanbul and İzmir by the Allies in the aftermath of World War I led to the establishment of the Turkish national movement under the leadership of Mustafa Kemal Pasha, a military commander who had distinguished himself during the Battle of Gallipoli. The Turkish War of Independence was waged with the aim of revoking the terms of the Treaty of Sèvres and by September 18, 1922 the occupying armies were repelled. The country saw the birth of the new Turkish state and on November 1, the newly founded parliament formally abolished the Sultanate, thus ending 623 years of Ottoman rule. The Treaty of Lausanne led to the international recognition of the sovereignty of the newly formed “Republic of Turkey” as the successor state of the Ottoman Empire, and the republic was officially proclaimed on October 29, 1923, in the new capital of Ankara.
Mustafa Kemal became the republic’s first president and subsequently introduced a broad range of swift and sweeping reforms - in the political, social, legal, economic, and cultural spheres - with the aim of founding a new secular republic from the remnants of its Ottoman past. According to the Law on Family Names, the Turkish parliament presented Mustafa Kemal with the honorific name “Atatürk” (Father of the Turks).
Atatürk is a hero to the Turks; during his 15 years of presidency he set the country on a path to realising a new future. By the time of his death, Turkey was already becoming an industrial society on the Western European model and many regions had some sort of viable economic security. Today, his achievements are a legacy to the modern state and many see Turkey’s eventual ascension to the EU as the ultimate achievement of Atatürk’s dreams.
He died in 1938 and if you are in the country on the 10th of November, a minutes silence is observed for the “Father of the Turks”.

Guide to the buying process in Turkey

If you think buying property in Turkey is difficult then think again, here is a guide outlining how to buy property in Turkey.

The process of buying property in Turkey is relatively straightforward. Once everything has been agreed, a property transaction between two Turkish people can be completed in an afternoon. For a foreign buyer it takes significantly longer because of the need for official permission from the military authorities.

The military clearance process is required because foreigners are not allowed to buy property in the military, strategic and security zones of Turkey, upon your application the local TAPU office will do a search on behalf. In practice, the military sign-off is a formality – it is only undertaken to ensure that the land on which the property you’re buying stands does not fall within a restricted zone. The procedure takes three to six months and can be undertaken on your behalf by a lawyer appointed by you or a member of the Cumberland staff.

It is customary for buyers to grant Power Of Attorney (POA) to their chosen law firm. POA gives the lawyer authority to act on your behalf in a legal or business matter; in this case relating to the purchase of real estate. Essentially this facilitates the buying process as POA allows your lawyer to be your advocate, enabling you to go ahead with the purchase, without having to be present. This can be particularly useful if you don’t have time to return to Turkey during the buying process and saves you money on travel and accommodation. The following documents are required by the Notary Public when giving POA for each owner:

• Your passport
• Your parents’ full names
• Your contact numbers and addresses
• Two photos of each person who will be named on the deeds

Once you have found your home, you must sign a reservation contract which will hold the property for a limited period, and pay a small holding deposit (usually £2000).

Your lawyer must check the TAPU (title deeds) to ensure the property belongs to the owner, check it complies with building standards and that there are no outstanding charges against the property. For both new and re-sale properties it is important to ascertain that all the appropriate planning regulations were followed and building permission was granted. You can also check on the status of adjoining land if you are concerned about future development. All these searches and checks normally take 3-4 working days.

You will then sign a preliminary contract of purchase, which commits you to the sale and a deposit payment of around 30%. The title deed transfer will take place at the land registry office. As the legal owner, your name and details will now be on the title deed, a copy of which will be given to you. Additional copies of the title deed can be ordered from the registry office for a small fee.

If you are buying off plan, you should receive a İskan (habitation certificate) at the end of the building work. This document is required for all new buildings and shows that the construction of the building has been completed in line with the planning permission given by the local council (Belediye). This document also includes information regarding construction authorisation, completion date of the construction works, the land registry office records on the property, address and size of the property, specifications of the independent parts in the property, and the owners. This document is very important as without out it you can neither live in the property in question nor subscribe to the utility companies.

For purchase costs you should budget on six to seven per cent of the purchase price for fees. You will need to pay a deposit, legal fees, taxes and agent’s commission. Stamp duty is three per cent and split between the buyer and the seller.

It is important to register with the local tax office and open a local bank account. Do it sooner rather than later because you may need to hire a translator and independent accountant. The transfer of title deed will not usually take place until full payment is made. If you are making a bank transfer, remember to transfer enough money to cover the costs involved in the purchase.

Once you have purchased a property you need to register with the local tax office who will issue you with a tax identification number. Your lawyer or Cumberland can do this for you following the exchange of title.

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