I should begin by declaring that I do have an interest because I am involved in the property market here in Didim.
I don't believe that Turkey is comparable to Spain, (not where I am anyway) because the prices here were never as grossly inflated.
Here a new 2 bedroom apartment that isn't a shoe box can still be had for around £30k. There are also controls, so that there are minimum distances between buildings, roads are wide, and there are no high-rise blocks.
Certainly development in Didim has not only continued but accelerated, and there are many empty properties. The way it often works here is that a private landowner will be approached by a builder who wishes to develop the land, and instead of paying cash to the landowner he will receive a number of the finished properties. (on large developments this can also be the deal for tradesmen)
He can then either offer these for sale, rent them out, use them himself or simply leave then unoccupied as a further investment.
Therefore it should not be assumed that just because a home is unoccupied that it is actively up for sale.
Having said that, not all builders are the same, so that desirable homes at good prices can sell very quickly, whereas others can be on the market for a long time. But I would say that this would be the case anywhere. I would agree from a personal point of view that the rate of building could slow down, but Didim is a fairly new resort, it is building for the future and providing work for a lot of Turkish
people.
The overall standard of build has improved in recent years, and when I compare what my company was building four years ago to what is being produced now, the difference is plain to see. That isn't to say that the quality was poor before, but there are new building regulations (such as a requirement for outside walls to be insulated) and new building and finishing materials have been introduced.
I would certainly advise that anyone considering buying off plan should look at what the builder has previously built, and where possible speak with people who own those properties.
Artists impressions can vary, but this can be gauged by asking the builder for them for those previously constructed properties, and seeing how they compare to the reality. In order to apply for planning permission, the builder would have to submit detailed plans, and a prospective buyer should see those as well.
With the abundance of new properties available, the resale market is depressed. Given the choice of a new building, which is of the latest design and in accordance with current regulations, buyers are looking for a significant price advantage to opt for resale.
In addition, because of financial difficulties some owners have sold cheaply and that has further driven prices down.
However, the biggest problem is perhaps for those who bought perhaps 5 or so years ago, when prices were rising at around 15% per year and were expected to continue doing so. It was at this time that the worldwide economic crisis happened, and the prices stopped rising.
They were paying prices that, with assumed growth, would have seemed very reasonable at the time but not in today's situation.
Of course, this wasn't something that only happened in Turkey, and many owners suffered far worse in other countries.
Something else to consider is that people from the UK (and other foreign countries) are not the main buyers of properties here, it is the Turkish domestic buyers who are the main ones. If a UK owner wishes to sell a home they bought for say £30k, they are usually wanting payment in sterling and are looking to recover what they paid. In addition to the considerations I have already mentioned, there is also the exchange rate. During 2007 the average was about 2.50 (GBP to TL) so that a £30k home was 75k TL.
Today the rate is 2.83 so the same home would now be 85k TL.
Turkish buyers are frankly not interested in UK exchange rates, and they would not pay an extra 10k TL so that the seller can get their sterling back. For them, a 75k home is a 75k home. But if the seller was in a position to leave the money in a Turkish bank, they could recoup the difference within a couple of years at present interest rates.
The upside to this is that for those buying now, their sterling is worth more lira and we are getting buyers from abroad who are particularly looking for bargains which occur because someone needs to sell quickly. One person's misfortune becomes someone else's gain. In addition prices of new properties have remained fairly stable for the last few years. It is very much a buyer's market at present.
I would not advise anyone to expect a good return on rental here. Long term rentals are at Turkish prices, so that e,g. a two bedroom apartment (depending on location etc) would be around 400 TL a month (about £140). During the summer months the same apartment could perhaps be rented out for £200 per week, and many owners who want to rent out prefer that option.
But in either case it isn't likely, after running costs have been deducted, to produce much of an annual gain by UK values.
In terms of property prices, none of us knows for sure what is going to happen in the future but I do advise potential clients that it will be perhaps 5 -10 years before they could be looking for a return.
If I were purely looking for an investment for the short to medium term, frankly I would put my money in a Turkish bank rather than in a property. But I've only ever had one person who bought from us purely for investment, and he is quite happy with the modest rental he receives. The rest bought homes for holidays and/or retirement, ourselves included, so that the possible return was not the main
or even a major consideration. For us personally it was the way of life.
