“Turkey is Preparing for a Busy Summer Period in Real Estate Sales to Foreigners”
Interview Jul 28, 2021
Housing sales to foreigners in May increased by 106.5% compared to the same month of the previous year, while the sector is very hopeful about the summer season with preliminary requests from foreign investors. Vedat Arslan, the Head of Aremas Real Estate, who predicts that there will be a serious momentum in sales to foreigners as of June, said, “The value of real estate does not decrease in the medium term in world cities such as Istanbul where domestic demand is intense. Istanbul, which is a city followed with interest by foreigners and a very attractive hub, offers an actual real estate income.”
While real estate sales to foreigners in Turkey increased by 416.1% in May compared to the same period of the previous year, according to TUIK data, real estate companies entered an intense pre-demand process in this area. Sec-tor agents, who expect sales to be realized as soon as the flight restrictions are lifted and are carrying out their preparations for this, are quite hopeful for the summer period.
We talked to Vedat Arslan, the Chairman of the Board of Directors of Aremas Real Estate, which carries out the sales and marketing of important projects in Turkey through its offices in Dusseldorf and Baku, as well as in Istanbul, Izmir and Bodrum…
Can we get information about Aremas Real Estate and its activities?
With our Istanbul, Izmir and Bodrum offices, we provide services in the sales and marketing of projects in these regions in Turkey to both resident customers in Turkey and foreigners. We have offices in Dusseldorf and Baku. We also established the Istanbul office of Maya International, independent of Aremas, which we established in Germany. Maya International is an agency structure operating in the sale of projects in Turkey to citizens and foreigners abroad. The Baku office, on the other hand, performs some works towards making different investments in Turkey through business development activities.
How would you define the profiles German and Azerbaijani real estate purchasers based on your experiences?
German real estate purchasers mostly prefer the south-ern and Aegean coasts in Turkey, especially regions such as Antalya-Alanya, Didim, Fethiye, Bodrum, Foça and Ayvalık. In Bodrum, they are more interested in Güvercinlik and Güllük, which are close to the airport. If we look at our customers, we can talk about a target audience with an average budget of 80-100 thousand euros. Turks in Germany also invest in their own country. If you are selling a house to a Turkish person in Germany, this means that you can sell at least 5-6 more units. Because once this trust-seeking audience is satisfied with their investment, their friends and relatives start to be interested in the same project. The customer base in Baku is also a hard-to-trust customer base. When you do not let their trust in you fail, they can invest without questioning. Similar to the Iranian customer, the Azeri customer base seeks to invest in a quality product in a good location. They are not after buying the cheapest product. I can say that although they mostly invest in the south, they are curious about Istanbul and follow every development in Turkey.
Istanbul, as you mentioned, is a world city that foreign investors are curiously on the watch-out about. Which features of the city do you think are attractive in the international arena?
Turkey is a place where investors can feel at home with the warm approach inherent to Turkish people’s nature. One of the most attractive points of Istanbul, on the other hand, is that it is a regional hub. You can go anywhere in the world you want to from Istanbul. Offering “diversity” with the Bosphorus that connects two continents, its nature, historical values, food, drink, entertainment and worship, Istanbul is a very rare city in the world as it provides all of these by itself. It is unlikely that the value of real estate will decrease in the medium and long term in cities with high domestic demand. Istanbul is a city that has a very serious domestic demand. In this respect, it offers real estate investors an actual real estate return. Despite all this, the brand value of Istanbul is far below its current potential.
What should be done in order for Istanbul’s brand value to reflect its potential?
While real estates in Moscow, London or New York are 40-50 thousand dollars or pounds per square meter, even the most expensive mansions in our country are not actually bought at a price higher than 10-15 thou-sand dollars per square meter, except for a very special few mansions. Therefore, square meter values in Istanbul should get its worth. It is necessary to develop the infrastructure of the city and to accelerate its gentrification while preserving its historical texture. It is important that the Ministry of Culture and Tourism conducts a communication operation specific to Istanbul.
What are your expectations about real estate sales to foreigners in Turkey?
While evaluating the number of real estate sales; It would be sounder to compare 2019 and 2021, not 2020 and 2021. The main reason for this is that the effect of the pandemic was observed in Turkey as of mid-March 2020. Despite all kinds of effects caused by the pandemic this year, a better 5-month period has unfolded compared to 2019. This process is an indication that a much better season will unfold as of June in the upcoming summer period. In this light, the decisions to be taken on the subject of citizenship will determine the course of foreign sales in the upcoming summer period and beyond. Unless there is a shift in today’s conditions, maybe 2021 will be the year when we peak in sales.