Market news

Land deals pay well

24.11.2008

The real estate market has been a traditional favorite for investors. Experts say the best vehicle for investment in the Turkish market these days is land for development, but they also warn investments should be undertaken with caution.

Real estate experts have ranked land purchases at first place, ahead of other real estate investments. "If you have a house and savings for an investment, then invest in land," many experts say.

Locations in Istanbul such as Çekmeköy, Kemerburgaz, Halkalı, İkitelli, Mimaroba-Sinanoba, Western Ataşehir, Beylikdüzü, Kurtköy, Zekeriyaköy, Tuzla, Bahçeşehir and Riva have seen increase in prices. Şile, Çatalca, and Silivri have also seen great profits.

While everyone is asking, "how much higher can prices go?," few experts are presenting worse-case scenarios. It is true. Prices in certain places have plateaued and lands there are probably overvalued. Some experts say in order for markets to synthesise these prices, there needs to be a slow down. This was proven correct this year. The steep price increase in the first nine months of the year started to slow and although prices did not retreat to previous levels they did start to level out. Riva, Ömerli, Çavuşbaşı, Kurtköy, Avcılar and Silivri are examples of locations where prices are now steady.

"In Istanbul alone there are 400,000 new units and 600,000 previously owned units up for sale," said Nizamettin Aşa, the vice president of the Istanbul Chamber of Public Realtors. This, according to Aşa, indicates the number of available units is slowing down and has increased land prices. This is why even the increase in commercial and industrial land prices has also slowed, although it is not as evident as in residential prices.

Good investment
Buying land is one of the most important investment vehicles, but it is not like other real estate, it requires expertise, said realty experts who spoke to the Ekonomist magazine. Building permits, road access and water management should be taken into consideration when buying land. There is also the paperwork and necessary reports from the Ministry of the Environment and the Conservation Council on Culture and Nature. Experts said people who are not qualified to undertake land sales should not attempt it alone. They warned that land purchases should not be made without help from professionals like civil engineers, architects or city planners.

There are other factors driving land prices up in certain areas. "The first is the route for the third Bosphorus bridge. Even small villages have been affected by this. The second is the Metrobus route. With the new Metrobus route, E-5 traffic that extended to Mecidiyeköy and Merter will now extend to Avcılar," said Başak Soner, a board member of Turyap, a highly respected realty company.

The Metrobus route from Merter to Avcılar has invigorated the area and helped sales in development projects in those neighborhoods, especially in Bahçelievler and Yenibosna.

"We have seen land prices go up this year, as they did in previous years," said Soner, adding some places have increased 1,000 percent in value. Some of this is an artificial increase in land prices, said Soner. Sales of land to foreigners have also increased over the last two of years, Soner said. Villages surrounding Beykoz and Sarıyer have seen an increase in demand because of the third bridge. Western Ataşehir has been of special interest because that area is developing as a financial center, she said, adding surprisingly she still heard a lot about Başakşehir and İkitelli.

Source: Hürriyet Daily News

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