IMPORTANT UPDATE: Please note this law has moved on. Please see comments.
Not a very nice headline for those looking to buy property in Turkey but a true one never the less with news that the highest court in the land has suspended property sales to foreign nationals and foreign companies. This is a very interesting thread which shows how divided the property investment market is, some suggesting that the new laws will be introduced in a matter of days and others not prepared to enter into any agreements until the new laws have been passed. As with any investment market, confusion is the worst possible scenario leaving the situation open to rumours and counter rumours which are not helpful.
The thread itself reads like a timeline from the moment the law was passed and the government were given a three month period to introduce new laws, to the time when suspension of property sales to foreign nationals and foreign companies was suspended. There is also a very interesting comment from someone in the Turkish property market suggesting that the country has a history of changing property laws at a moments notice and causing widespread panic only to rectify the problem at a later date.
Many posters are looking at ways to get around the ban on non-Turkish nationals buying property but the market does actually seem to have come to a halt. There appears to be some pent up demand which should kick in when the laws are finally changed, but this has the potential to affect the property market for some time with investors now wary of what the authorities may do in the future.
In order for any property market to prosper and grow there needs to be a degree of stability, something which seems to be sadly missing in the Turkish market at the moment. A number of changes in property laws over the past few years have seen many investors take fright, concerned at what other changes the authorities may make in the future. When you consider that foreign investment in the country is vital this has potential ramifications for all areas of the Turkish economy. For this reason alone it seems inevitable that the government will need to address these problems as soon as possible and create a more workable framework.
So how will this ‘short term’ problem affect the overall Turkish property market?
There is no doubt that the problems have hit sentiment amongst foreign investor with many now fearing for the future security of their investments. It is this nagging doubt that this is not the last of the changes which will be at the forefront of many minds for some time to come.
While there is no mention of how property prices have been affected by the freeze of foreign property ownership there is no doubt that it will have affected prices. Will there be some short term attractive properties for the brave, as and when the new laws come in, or will the markets suddenly return to levels seen before the ban?
The ever increasing tourist market, with UK holiday makers very prominent in the area, will add some support to the future property market but sudden changes in the rules are not helpful for property investors.