As a result of changes in exchange rates, the departure of domestic investors from the sector allows foreign investors to show a record level of interest in real estate in Turkey. This situation, which also negatively affects the access of indigenous people to housing, is becoming an even bigger problem with the increase in investment costs in the construction sector. Yusuf Boz, General Manager of PropertyTR, dramatically interprets the current state of the construction sector in Turkey in 2022, the sale of housing to foreigners and the impact of global developments on the sector. Noting that Reva Yatırım and PROPERTYTR, which have achieved great success in the field of construction and real estate, are adapting to changing dynamics, Boz notes that the sector may also be the scene of major changes in the coming period.
So, how will the situation in the construction sector change in the coming days? Yusuf Boz draws attention to different points about the current situation and the future of the construction sector in Turkey.
Foreign Investors Prefer Real Estate
According to the data obtained by the Land Registry and Cadastral Directorate, 708,523 real estate sales were carried out in Turkey in the first quarter of 2022. Housing sales, which account for 307,396 of these sales, are increasing in the first quarter. The fact that the real estate sector saw a 34% increase in March compared to the previous month also signals that there may be moving moments in the sector in the coming months. Attracting the attention of foreign investors with the rise of foreign exchange rates, Turkey aims to increase the sales of 58,576 houses to 70 thousand in 2022, where it achieved a record closing in 2021. Turkey, which is among the top dec0 countries in the field of real estate investment worldwide, plans to reach its top 5 targets in 2025. According to Yusuf Boz, in the early 2000s, mainly investors in neighboring countries came to the fore, while today those who want to invest in real estate from around the world show a great interest in real estate and housing in Turkey. The sales arrangements made for foreigners also pave the way for this increase and support the steady increase in the potential of the sector. In addition, Boz expresses that it is of interest to many citizens of different countries, especially Middle Eastern countries, that investments made in the field of real estate along with current regulations also pave the way for citizenship of the Republic of Turkey. Looking at the position of Turkish citizens in the sector, the effects of the increase in housing prices caused by the stagnant construction sector are clearly visible. Yusuf Boz, despite this situation, real estate sales in Turkey continue to set records, adding that real estate is a non-dying investment.
Although the decrease in investments in the construction sector after the increase in exchange rates has led to a rapid increase in prices in the housing sector, many people, especially citizens who are looking for risk-free investment tools, continue to consider real estate assets as an ideal investment tool. VAT reductions realized in housing purchases are also one of the important developments that have changed the sector. The work on simplifying VAT on housing organized by the Ministry of Treasury and Finance reduces the VAT rate of 18% on housing up to 150 square meters to 8%.
Yusuf Boz: “Irregularities that were previously made due to the high VAT rate can be prevented together with the new regulation. In addition, the new regulation will ease the VAT burden on housing, reducing prices, and there will be an increase in construction and housing sector sales. But it is worth remembering that the regulation also fixes the VAT rate of 1% on housing under 150 square meters to 8%. This may lead to an increase in the prices of apartments with lower square meters,’he said, referring to the developments that may occur as a result of the new regulation.
Despite the Crises, Real Estate Investments Will Gain Momentum
Another current event dec brings about fundamental changes in the sector is the crisis between Russia and Ukraine. After the sanctions imposed on Russia, Russian citizens have achieved a record increase in the purchase of real estate and housing in Turkey. Not only Russian citizens, but also citizens of Ukraine are interested in buying real estate and housing in Turkey, leaving behind difficult conditions. The statements of the president of GIGDER, Omar Faruk Akbal, also confirm the situation and confirm the growing demand. Akbal expresses his wishes for peace, describing the effects of the war and the human drama as sad. Noting the record demands from the two countries, Akbal says that Turkey has become one of the top priority choices, especially after the sanctions imposed on Russian citizens, and there has been an explosion in foreign housing sales made to Russian citizens almost everywhere in Turkey. The mobility brought about by this situation supports the achievement of sales targets to foreigners in the construction and real estate sectors. In addition to the demands generated as a result of the Russia-Ukraine crisis, demands from countries such as the UAE and Qatar also ensure positive developments in the construction and real estate sector in Turkey. Strong demand from Middle Eastern countries supports Arab investors all over the country, especially in Istanbul, to continue to see Turkey as the shining star of the sector.
Yusuf Boz on the subject: ‘When we look at the future of the construction and real estate sector in our country, we think that exciting developments are approaching. It is expected that the new regulations, especially those made by the Ministry of Environment, Urbanization and Climate Change, will further stimulate the construction and housing sector,’he says.
Yusuf Boz, noting the aftermath of June 23, thinks that domestic investors will also create a noticeable increase in demand in the housing sector. Looking at all these developments from a single table, it is possible to say that Turkey, as always, will become the focus of more investors by continuing to grow in the field of construction and real estate.
Boz said, “As Reva Yatırım ve PropertyTR, we are closely monitoring the pulse of the construction and real estate sector in Turkey. By evaluating the developments, we make strategic decisions and manage to take steps in our projects that meet the current requirements of the sector. we are continuing our work in 2022, taking into account the important moments and the future of the sector,’he concludes by saying.
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