August 23, 2007
Mortgages could see Turkey property prices soar
Turkey property prices are set to reach new heights after an announcement stating that mortgages will now be available in the country for the first time.
Previously, Turkish property buyers needed to use either cash or bank loans at high interest rates to purchase a home in Turkey. However, buyers from overseas and from within Turkey will now be able to finance their purchase using a fixed interest rate mortgage. The rate can be fixed for either one, two or five years with current local interest rates fluctuating between 5.5 to 6.5 per cent. Turkish mortgages are based on affordability, with 40,000 euros being the minimum amount one can borrow and 200,000 euros the maximum. The maximum repayment period for the mortgage is 20 years.
While this is good news for those hoping to get a foot on the Turkish property ladder, it is expected that the introduction of mortgages could also see Turkey property prices soar, as an unprecedented number of buyers from overseas and Turkish nationals will now have stand more chance of buying a home. Price rises could be especially great in already popular second home destinations such as Bodrum, Dalaman, Fethiye and Istanbul.
“With the introduction of mortgages we can expect to see many first time buyers, both for new and resale property, enter the market”, explains Michael Johns of The Right Move Abroad. “This will have the effect of making the resale market one of the most viable. New developments are also very much in favour with the country’s young population. Those investing now can expect to see huge capital appreciation over the next few years”, he added.
Already the price of Turkey property has been on the move. According to the Assetz investment tracker, Turkey property experienced capital appreciation of 20 per cent in the year to September 2006. The company predicted increases of around the same level for the future without taking into account the introduction of mortgages.
Posted on: Turkey
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