Market news

Two laws that will revive the construction sector

24.02.2012

It is expected that the year 2012 will be a passive year for construction sector because of the increase of mortgages’ interest rate, the rising of construction costs and the situation on the real estate market. In this regard, two draft laws, suggested by the Government, can become best saving option for the construction sector.

The adoption of the Urban Reconstruction and Development Law and Reciprocity Principle Abolition Law will please constructing companies. The first draft law will allow conducting of repair, restoration and strengthening of dilapidated buildings, which became especially important after the earthquake in Van province, while the second law will remove the ban onto real and land property purchasing in Turkey by citizens of foreign countries.

Construction sector representatives are looking forward to the Cabinet of Ministers decision over Reciprocity Principle Abolition Law adoption. The mentioned daft law will easily open a way for foreign buyers to acquire real and land property in Turkey. After the decision of Cabinet of Ministers over Reciprocity Principle Abolition Law adoption, it will be sent to Parliament for approval, after which the law will come into force.

Contests of projects

One million of living quarters will be put for sale to citizens of foreign countries. In addition, the Reciprocity Principle Abolition Law will allow hundreds of thousands of buyers from Russia, Persian Gulf countries, Arabic and Turkic Republics and other countries, the citizens of which earlier were not allowed to own real and land property in Turkey, to purchase real property without the conditions of Turkish citizens to have right to buy real and land property on the territory of these countries. Together with the expected increase of the demand for real and land property, new projects of residential complexes construction will appear. The best projects will be chosen in accordance with the content results. The real estate sector will receive $ 300 million of investment for period of 10 years.

Cabinet of Ministers enforcement powers

Earlier foreign citizens were allowed to purchase not more than 2.5 ha of land, but now they are allowed to buy up to 30 ha of land. Beside the Cabinet of Ministers was empowered with the right to increase this figure to 60 ha. In accordance with the new Order the Cabinet of Ministers will also have enforcement powers to determine citizens of which 47 countries that have no partnership relations with Turkey are allowed to purchase real and land property. If the purchasing land or object in situated in a military or strategic important zone of Turkey, to buy this real and land property the customer must first of all to receive the official permission from Joint Stuff. In the case of land allocation to a strategic zone outside the military territory, the final decision over its purchasing will be taken by specially created commissions under the Governor control.

Invest to not lose the right

The rights of landowners will be canceled if within two years of he got no investments into the development of his land. Those who purchased a land property for its development must provide a draft of land development project within two years since the moment of land property purchasing. Those who didn’t provide a construction project within the required time or those who do not use the land for its development will lose their ownership rights.

Sale for $20 billion per year

Mr. Bilge noted that the sale of real and land property will yield Turkey more money than even from the export of goods. He also noted that Turkey, due to its geographical location, ample opportunities for investment and young educated population will attract not only willing to invest the real estate market, but will make the country more attractive for international investors. Sharing his assumptions about the fact that the adoption of Law will increase the level of investments into real estate market up to $ 20 billion per year, Mr. Bilge pointed out that foreign companies, entering into a partnership with Turkish firms, will invest billions of dollars into Turkish economy, which means the increasing of employment of Turkish citizens.

Will the prices for real and land property increase?

Mr. Bilge gave his personal views over the issue of the increase of prices onto real and land property purchasing after the adoption of Law: « The real estate sector representatives want the Law to improve real estate market position and increase the level of development of Turkey after its adoption. The increase of prices onto real and land property will make everything vice versa: this process will simply low down the demand. Beside, the adoption of such Law “for foreigners only” shouldn’t be considered as harassment of Turkish buyers. That’s why I think that the adoption of the mentioned Law will not affect prices onto real and land property».

Living quarters’ units will be finished

Construction companies are carefully preparing for the adoption of Law draft. Turkish Real Estate Agencies are recruiting the personnel with the knowledge of Arabic and Russian languages and opening their representative offices abroad. Construction sector representatives are talking about reciprocity principle abolition as about the best variant which can save the position and situation at real estate market in the country. They also note the possibility of living quarters’ units in such provinces as Istanbul, Mugla, Aydin and Antalya to be finished.



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