Foreign investors shift attention to housing
Posted by meb at May 12th, 2007
Following their interest in Turkish hotels, shopping centers and residential projects, foreign investors are now interested in Turkey’s housing sector with European and Middle Eastern investors are offering partnerships to Turkish real estate investors.
Uğur Dumankaya, board member of Dumankaya İnşaat, which is planning to construct 15,000 houses in five years, said that they had many partnership offers from foreign investors that could lead to many future deals. “Turkey is one of the most popular countries in terms of foreign investment. People choose here because of high returns and its young population,” he said.
Dumankaya İnşaat started a major housing construction project, Trend, 18 months ago on the Asian side of İstanbul. It has sold 90 percent of its 1,400 houses. Dumankaya said the construction sector was badly affected by the “mini” economic crisis of spring 2006 but recovered by September of the same year. He also noted that the share of housing investments had increased significantly.
The first evidence of skyrocketing interest in Turkey, especially İstanbul, came at fairs and summits abroad, Dumankaya explained. Interest in partnerships was due to international investors trying to access Turkish real estate market but not wanting to operate on their own in a new market they did not know well. “So they wanted to establish partnerships,” he added. Thus his firm now decides whether to accept an offer based on the company’s potential to attract foreign customers to purchase the houses. Most of the offers come from Dubai. Previous work done in Dubai by Turkish construction companies has given the industry a good reputation. Dumankaya said Arabs also wanted to buy houses in Turkey. “It is a rising star and has competitive prices compared to its rivals,” he noted.
There are difficulties, however, rising construction costs in particular. Labor, land and equipment costs have doubled within the last one-an-a-half years and competition has reduced the profit margins of contractors, Dumankaya complained. For these reasons housing prices will continue to increase and the demand for small one or two-bedroom flats will also rise, he forecast.
source: Today’s Zaman
Related posts: