Property in Turkey

Turkey is considered as having a developing real estate market despite a crisis in global markets.

There are different standpoints regarding the direction of the crises. The chief executive officer (CEO) of Krea Group, Hakan Kodal, assessed the recent credit crunch in global markets as well as the conditions of the real estate sector in Turkey and their investment strategy at press conference in Istanbul yesterday.

Krea Group cooperated with Merrill Lynch GPI, one of the world's leading wealth management, capital markets and advisory companies, in 2006. The operating partner of Merrill Lynch is also responsible from the management and marketing of 14 shopping centers in Turkey, including Adapazarı and Eskişehir.

“Pricing and liquidity are two important factors that fed the credit crunch. The crisis that emerged due to liquidity risks is about to cease; however, we have not come to an end in the pricing crises yet. This is also because of the market-to-market pricing system of the United States, which is the leading actor of the global economy” Kodal said. “The total deficit will be approximately $800 million after the assets are being re-evaluated,” he said.

“There is a problem of growth and development in global markets. Therefore, it will take at least one or two years to defeat the circumstances of the prevalent crunch,” Kodal said, who also noted that the Turkish real estate market is in a 'digestion' period after experiencing drastic rises in property prices.

Most of the investors in the real estate sector have to be cautious enough for their future investment plans given the uncertainties and risks in global markets, said Kodal. “This year does not offer predictable economic conditions. Only those companies with strong capital structure will survive under these volatile conditions,” added Kodal. He also said that in a conference regarding the evaluation of real estate market held recently 80 percent of 350 participants believed the crunch is almost at its depth. "Turkey preserves its charm for investment and 95 percent of all participant companies in the real estate conference were somehow interested in Turkish real estate sector,” said Kodal. “The mortgage crisis is about to end. With a $30 billion mortgage volume, which is 6 percent of total GNP, Turkey is likely to attract more foreign investment in the long-run,” said Kodal.