Buying a Property in Turkey under Third Term Erdogan

Buying a Property in Turkey under Third Term ErdoganIn winning the Turkish general election for a third time, the AK Party and the ever-charismatic Erdogan also increased their majority for a third successive occasion, a double-whammy of records. This makes for an incredibly powerful majority of 326 seats in a 550 seat parliament. Just 4 more seats and Erdogan could have changed the constitution on the result of a referendum, and just 41 seats more and he wouldn’t even have needed a referendum.

As it is Erdogan will need some support, if not very much, from the other parties in the parliament, namely: the Republican People’s Party, or CHP, the Nationalist Movement Party, or MHP, and the Peace and Democracy Parliament, or BDP. Never the less the AK Party wields a lot of power in Turkey so it is important to consider what this could mean to those owning, or considering buying property in Turkey.

Well, the first thing to say is that Erdogan is a friend of property investors, a friend of investors from around the world, along with (pretty much) anyone else who puts money into the Turkish economy. When the AK Party won its first election foreigners could barely buy property in Turkey at all. Erdogan firstly allowed them to buy on a zonal basis, and then (because the zones had been pretty much ignored anyway) Erdogan removed the zonal restrictions.

Today anyone and everyone from countries that allow Turks to buy property in their country can buy property in Turkey, apart from in specially designated military zones, or villages (Municipalities with fewer than 2000 inhabitants).

There are hopes that Erdogan could make it even easier for foreigners to buy property in Turkey; one policy in his Constitutional Amendment Bill would bring the military under the control of the civil court system for the first time in Turkey’s history. This could mean no more seeking military approval for every foreign purchase.

In fact the only concerns that I would think justified in potential foreign buyers would be concerns that the continued prosperity the AK Party is bringing to Turkey will lead to a continually strengthening currency, and rising property prices, obviously making Turkish property less affordable.

However, while property prices are currently rising at around 6% per year according to GYODER, Erdogan will have to get a firm grip on monetary policy to bring a stronger Lira.  The policy experiment: keeping rates low to combat the current account deficit even as inflation rose, did not go down too well with the markets. Like the Turkish people however, we are confident he will get it right before too long.