A new piece of legislation — often referred to as the reciprocity law — which is intended to allow foreigners to purchase property in Turkey, even if Turks do not enjoy the same right in those same foreign countries, has taken effect.
“Now the citizens of 183 nations can own property in our country,” Environment and Urban Planning Minister Erdoğan Bayraktar said at a press meeting on Wednesday, announcing the implementation of the law.
In early May, Parliament passed the bill concerning the sale of land to foreigners that eliminated the reciprocity requirement and increased the limit on the size of land able to be bought by foreigners to 30 hectares. President Abdullah Gül did not take much time to sign the bill into law, and it was then published in the Official Gazette on Monday.
The new law amends title deed laws and changes the previous reciprocity requirement, which dictated that the citizens of 89 countries did not have the right to own property in Turkey because Turkish nationals are not
entitled to own property those countries. Among these countries were Russia, the Gulf States and the Turkic republics of Central Asia.
According to the new law, foreign individuals and businesses are required to submit their project proposals for vacant plots of land to Bayraktar’s ministry within two years of purchasing the land. If the ministry approves the project, it will be forwarded to the local land registry office for monitoring.
With the introduction of the law, real estate prices are expected to increase across Turkey, but particularly in İstanbul and the country’s highly-touristic southern belt. In a statement released from his office in late May, TAB Real Estate Investment Chairman Ahmet Temeltaş said it will help raise real estate prices in İstanbul by as much as 200 percent. “The price of a square meter of real estate is likely to increase to as much as $6,000-$7,000 from the current $2,000 levels in a short period of time,” he said. He believes particular parts of the province will experience the biggest hikes in prices. He named Ataşehir, Maslak, Çekmeköy, Sancaktepe, Kartal, Pendik and Halkalı as examples of the best İstanbul neighborhoods in which to invest.
According to the Central Bank of Turkey’s latest figures, housing prices increased at an annualized rate of 11.68 percent in July while consumer inflation averaged at 9.07 percent compared to the same month past year. According to the Real Estate Investing Partners Association (GYODER), 96,000 housing units were sold in the first quarter of 2012, 5.5 percent more than a year ago.
Turkey attracted $3 billion in foreign real estate investments between 2003 and 2008. This number was $2 billion last year. Market observers expect the anticipated foreign investor influx to Turkish real estate markets could create as much as $5 billion in sales per annum after the new law.