An increase is observed in the real property purchases made abroad by Turkish investors during the recent years. And, as a consequence of these purchases, we are also observing that parties marketing such overseas projects and companies mediating in these purchases are presenting their services and projects to their target masses intensively at hotels and a variety of organizations. The buyers make foreign investments for 3 reasons in the general sense. One of these is the intention to buy a house abroad and settle there and the second is to make an investment for the future as aimed for the education of the children, while the third motive is to acquire a residence permit as based on real property purchase and subsequently citizenship in the following years.
Foreign investments have become quite attractive recently as a result of the low-interest rates offered by the banks in Europe, the volatility in the exchange rates, the different payment options offered by real property developers in order to get out of the crisis, and most important of all, the fact that real properties are being marketed at very affordable rates as compared to the past.
The most striking point that stands out is the increase in the lease rates of real properties when we analyze foreign real property investments. As a result, the pay-off periods of real properties is reduced significantly.
The United States takes the lead among the countries when Turks invest the most. The US is followed by countries such as the United Kingdom, Germany, Spain, Portugal, Greece, Bulgaria, and Romania.
The downside move in the real property prices in the US following the “Mortgage Crisis” has paved the way for the real property investments in the country and the production of residences has increased as the prices have started to reach the normal market rates.
New York and Miami lead among the cities where Turks purchase real properties the most. New York is preferred by the investors since it takes the forefront with respect to business life and offers 24 hours non-stop dynamic urban life; while Miami is preferred due to tax advantages and its warm climate. In these areas, the lease rates can be equivalent to the loan repayments with 30% down payment and 30 years loan repayment periods in general. In certain areas, the lease revenue that may be generated may even be more than the loan repayments, depending on the projects, and have the potential to generate extra revenue for the investors.
Bulgaria: It is observed that the prices are quite variable between old and new residential units. For example, you have to pay 100,000 Euros for a new 2+1 apartment at the center of the capital city, Sofia. However, older apartments may be purchased for amounts around 50,000 Euros. New apartments may be leased at monthly rates around 500-550 Euros. When we examine the increases in the prices of real properties in Sofia over the last 3 years, it is observed that they vary between 2% to 5% on Euro basis.
Spain: Real property sales have been stimulated through granting citizenships based on real property purchases in Spain, which leads among the countries that have been impacted the most by the global crisis. A 3+1 apartment at Barcelona city center may be purchased at rates such as 450,000-500,000 Euros, and may be leased at rates around 2,000 Euros per month. In the meantime, when we look at more suburban areas, 1+1 apartments may be sold for 130,000 Euros and leased at 600 Euros.
United Kingdom: You may acquire a 1+1 apartment at a central location in London for 550,000 Pounds and generate a lease revenue of 1,500 Pounds per month. Moreover, real property prices decrease as you move away from the city center and thus the payoff periods become much more affordable. For example, while it is possible to purchase a 2+1 apartment in Stevenage for 250,000 Pounds, the monthly lease revenue that may be generated is around 1,000 Pounds.
Germany: A 1+1 apartment may be purchased for 200,000 Euros in new projects in central Berlin and leased for 600 Euros per month. In the meantime, 1+1 apartments may be purchased for 100,000 Euros when you move away from the city center and such apartments may generate a monthly lease revenue of 400 Euros. When we look at the Berlin residential sector considering the foreign demand, we observe price increases in the range of 5%-8% on annual basis, as compared to the previous years.
Greece: Greece, which has not yet been able to recover from the economic crisis, also leads among the countries where Turkish investors purchase the most. Closeness to Turkey and the increase in the Greek Islands’ tourism during the recent years and the low prices have influenced real property investments positively. When we look at the residential sector in Athens, the prices that have constantly been on the downside since 2010 started to exhibit a slightly increasing trend starting with 2016. An apartment that may be purchased for 100,000 Euros may be leased at 400 Euros on the average in Athens. Similarly, when we look at the Greek Islands, it is possible to purchase a villa in Mykonos for 500,000 Euros and lease it at amounts around 30,000-35,000 Euros per annum.
United Arab Emirates: While residence apartments are more in demand in Dubai, it is possible to purchase villas built outside of the city at rates below the city center. For example, the sale price of a 1+1 apartment in Palm Jumeirah is in the range of 450,000-500;000 USD and it may be leased at 2,000 USD per month. In the meantime, a 100 sqm apartment in Burj Khalifa may be purchased for 1,000,000 USD and leased at 4,000 USD.
USA: Florida is the place where the residential sector is most in demand with respect to foreign investors. Orlando region attracts a large number of visitors thanks to the Disney parks and the NASA Kennedy space center and residential projects can be leased to the visitors. It is possible to purchase a 2+1 apartment of 110 sqm area for 100,000 USD or a villa in a garden for 200,000 USD to 250,000 USD. The apartments may be leased at rates around 550-600 USD. In the meantime, the lease rates of the villas vary depending on the region and the project and are in the range of 1,400-1,500 USD in general.
On the other hand, the prices increase when we look at the Miami region and the prices of residences around the Miami Beach Marina may reach 6,000-9,000 USD/sqm.
Meanwhile, an apartment that is worth 1,000,000 USD in New York Manhattan may be leased at 3,500-4,000 USD in the average.
Hungary: 2+1 apartments at the city center in Budapest may be purchased for 70,000-80,000 Euros and leased at 400-450 Euros per month.
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