REAL ESTATE
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The Turkish real estate sector, offering ever-greater opportunities for investors every year, has come to prominence especially in the last decade. Although with the recent economic crisis and the global economic recession the European and US real estate markets have been negatively affected, the real estate market in Turkey is still promising. While the reduction in demand and a downward trend in house prices have been observed all over Europe, according to TurkStat statistics the number of apartment units sold in the second quarter of 2009 increased 72 percent compared with the same period of 2008 in Turkey, which shows that Turkey has a huge growth potential in the real estate sector. |
The entry of global actors into the real estate market is increasing the competitiveness of the sector, while massive mergers and acquisitions taking place help its expansion and overall growth rates. Different surveys and publications such as the “Emerging Trends in Real Estate Europe”, prepared jointly by PricewaterhouseCoopers (PWC) and the Urban Land Institute, show how global and local interest in the Turkish real estate sector has increased. According to the 2009 publication of this report, Istanbul is ranked as the third most attractive investment market in Europe after Munich and Hamburg.
As Turkey progresses along the road to EU membership, the essential legislative reforms introduced have made investing in the real estate market even easier and more profitable. The amendments to the Land Registry Law, the Draft Mortgage Law and the redrafting of tax laws are also designed to improve the competitiveness of the Turkish real estate sector.
The real estate sector in Turkey also has great prospects thanks to demographic factors that are changing in parallel with improving economic figures. The demand for offices and logistical and industrial areas is expected to increase in line with the increasing number of global and local companies.
- Stable, institutionalized, internationalized sector thanks to predictable inflation rates and consistent prices.
- Dematerialization, transparency, auditing, high quality and standards, institutionalization and statistical information in line with the ongoing EU accession process.
- 60 percent of Turkey’s population is under the age of 34, while the country’s GDP was USD 618 billion in 2009. The share of housing loans in Turkey’s GDP is estimated to hit 15 percent in 2015.
- Housing loans increased from TRY 3.5 billion in 2004 to TRY 37.5 billion in 2008, according to the statistics of The Banks Association of Turkey (TBB).
- 27.3 million tourists visited Turkey in 2009, making Turkey the 7th most visited holiday destination in the world. These figures show the great potential of the Turkish real estate sector as regards the tourism industry.
- The number of modern shopping centers increased from 44 to 190 between 2000 and 2008.
- Turkey, as a regional hub providing easy access to 1.5 billion consumers in Europe, the CIS, and as an energy corridor and terminal between Europe, Central Asia and the Middle East, creates more and more enterprises each year within its borders.
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POPULATION
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A population of 74 million people
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Largest youth population compared with the EU
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Half the population under the age 29
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Young, dynamic, well-educated and multi-cultural population
*2010 data
QUALIFIED AND COMPETITIVE LABOR FORCE
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Over 25 million young, well-educated and motivated professionals
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Increasing labor productivity combined with decreasing real unit wage
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4th largest labor force compared with the EU
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The longest working hours, and the lowest sick day leaves per employee in Europe (53.2 hours worked per week and annual average of 4.6 sick days per employee)
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Approximately 500,000 graduates from 156 universities
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Around 663,000 high school graduates, including one third from vocational and technical high schools
*2010 data
LIBERAL AND REFORMIST INVESTMENT CLIMATE
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A dynamic and mature private sector with USD 114 billion worth of exports and an increase of 225 percent between 2002 and 2010
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Business-friendly environment with average of 6 days to set-up a company, while the average in OECD members is more than 13 days
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Highly competitive investment conditions
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Strong industrial and service culture
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Equal treatment for all investors
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More than 25,000 companies with international capital
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International arbitration
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Guarantee of transfers
INFRASTRUCTURE
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New and highly developed technological infrastructure in transportation, telecommunications
and energy
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Well-developed and low-cost sea transport facilities
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Railway transport advantage to Central and Eastern Europe
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Well-established transportation routes and direct delivery mechanism to most of the EU countries
CENTRALLY LOCATED
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A natural bridge between both East-West and North-South axes, thus creating an efficient and cost effective outlet to major markets
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Easy access to 1.5 billion customers in Europe, Eurasia, the Middle East and North Africa
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Access to multiple markets worth USD 23 trillion of GDP
ENERGY CORRIDOR AND TERMINAL OF EUROPE
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An important energy terminal and corridor in Europe connecting the East and West
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70 percent of energy resources are located in the south and the east of Turkey, while the largest energy consumer, Europe, is located in the west of Turkey.
LOW TAXES & INCENTIVES
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Corporate Income Tax reduced from 30 percent to 20 percent
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Individual Income Tax varies from 15 percent to 35 percent
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Tax benefits and incentives in Technology Development Zones, Industrial Zones and Free Zones could include total or partial exemption from Corporate Income Tax, up to 80 percent grant on employer’s social security share, as well as land allocation.
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R&D and Innovation Support Law
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Region and sector-based incentive system
CUSTOMS UNION WITH THE EU SINCE 1996
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Customs Union with the EU since 1996, and Free Trade Agreements (FTA) with 20 countries
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More FTAs underway
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Accession negotiations with the EU
LARGE DOMESTIC MARKET
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35 million internet users in 2010, up from 4 million in 2002
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62 million GSM users in 2010, up from 23 million in 2002
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46 million credit card users in 2010, up from 16 million in 2002
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Over 102 million airline passengers in 2010, up from 33 million in 2002
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28.5 million international tourist arrivals in 2010, up from 13 million in 2002
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Sound banking system
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Recently introduced mortgage system
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Strong construction firms with a good reputation worldwide
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ULI ranked Turkey the leading and the third investment market in Europe in 2008 and 2009, respectively
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High ratio of unlicensed and old housing; ineligible for mortgage credit
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Land area is limited and expensive, particularly in Istanbul
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- Housing supply is less than housing demand, indicating growth potential
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Expected increase in quality of housing in compliance with the earthquake regulations
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Increasing need for residences and plaza buildings
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Restructuring process in the cities leading to slum houses being demolished and replaced by quality housing
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High risk of earthquakes in Turkey, particularly in the Marmara region, which covers Istanbul and the leading industrial zones of Turkey
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Traditional volatility of the secto
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