Istanbul: Bag a Bosphorus bargain

By Laura Henderson
Posted: 2010/05/05

European Capital of Culture for 2010, Istanbul is the latest destination to embrace the second-home-buying scene. LAURA HENDERSON takes a tour

THE WINDING Bosphorus Strait between the Sea of Marmara and the Black Sea separates the European and Asian shores of Istanbul. Legend has it that Jason and the Argonauts navigated its entire length in search of the Golden Fleece.

These days, galley-sailing adventurers have been replaced by snap-happy ferry tourists eyeing up the city's shimmering shoreline with its myriad mosques and palaces. However, while the legacy of Byzantium and old Istanbul lives on in the vintage architecture, it's the modern gloss of trendy restaurants, boutiques and VIP nightlife that's bringing a fresh energy to this cultural hub.

"Tradition is everything in Istanbul but a growing middle-income population, with more than 60 per cent of the 12million residents under the age of 35, is forcing an overhaul, " says David Richardson of Property Sun Turkey.

"Demand for new housing is running at 250,000 units per year, with land being ring-fenced for large-scale residential projects."

David adds: "Many residences in the city's historic old quarter are being spruced up for the second-home market, while new-build resorts in the suburbs are attracting foreign buyers."

A value-for-money getaway thanks to a resilient lira, historically low incomes and a cash-dominated economy have helped keep down both inflation and property prices.

"South-coast stalwarts like Bodrum, Antalya and Marmaris continue to attract lifestyle buyers, " confirms Tracey Ozcan of Nirvana International.
"Istanbul, by contrast, is geared more towards small- to medium-sized investors looking to buy and sell on for profit in a few years' time."

While most long-standing expat owners have put down roots in the touristy quarters of Macka, Beyoglu and Taksim, urban expansion now means previously off-radar neighbourhoods are open for business. "The upscale waterfront districts of Bebek, Emirgan and Yenikoy offer huge potential, " adds Cindy Uriona of Istanbul agents Luxurion. "Properties are selling for 30 per cent less than before the recession hit.

A three-bedroomed apartment in a converted yali [a 19th-century mansion] can be bought for about £200,000."

Head to the city where the lively districts of Levent, Akatlar and Etiler are prime locations for easy-care pieds-a-terre close to the main shopping malls and key sights.

"A small new-build flat will cost you £30,000, while a two-bedroomed apartment with on-site amenities will cost you £60,000, " confirms Darren Edwards of Knight Knox International.

Mainstream investors looking for steady rental returns are taking their pick from the buy-to-let projects in the city outskirts.

Tulip Turkuaz Resort in the northerly suburb of Bahcesehir is one of several developments showcasing the eco-design talents of award winning Malaysian-born architect and ecologist Ken Yeang. "Sixty-five per cent of the project will be given over to parkland, lakes and gardens, " says Seda Aslam of Seda Consulting, marketing consultant for the project.

"Properties will also have sea views."

Prices start from £48,000 for a one-bedroomed unit, with an optional guaranteed net rental yield of six per cent per cent per annum for the first five years.

"Having a rental programme persuaded me to buy new, " says physiotherapist Michael Paxton from Newcastle, who bought his one-bedroomed apartment in the westerly suburb of Cerkezkoy for £25,000 in January.

"I can test the investment waters and still have the cushion of a steady rental income.

"EU accession is seemingly some way off for Turkey but if the government can secure Capital of Culture status for its largest city, it might come sooner than expected."

BUYING IN ISTANBUL:
Applications to buy need to be agreed by the local council and Turkey's Army Office.

Fees include estate agency: three per cent of the purchase price, about £400 legal fees, three per cent purchase tax and £30 land registration.

There is no capital gains tax if you keep your property for five years. Property sold before that period is levied on a sliding scale.

VAT is payable on new-build flats up to 150 square metres at one per cent rising to a ceiling of 18 per cent for larger properties.

MORE INFORMATION:
tulipturkuaz.co.uk, 020 8349 4919.
knightknox.com, 0161 727 1327.
propertysunturkey.com, 020 8349 4919.
nirvanainternational.com, 020 8279 0462.
networkturkey.net, 020 844 6062.
luxurion.com, +90 212 240 4244.