Kalkan Turkey Forum - EnjoyKalkan.com
Everything Else & Classifieds => The Everything Else Area! => Topic started by: Paradise Joe on September 15, 2008, 11:21:19 AM
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This extract taken from a post on a property website.
Once the centre of the European property and holiday home market it seems as though Spain is going though a very difficult time at the moment. Rising debt, rising unemployment and a whole host of issues in the building industry have come together to kill the property market stone dead, but are things really as bad as they sound?
The thread brings a few interesting points into the equation, not least the fact that there are thousands of unsold properties in the region. This has led to problems in the estate agency industry with more businesses than ever closing their doors, thereby reducing the potential sales teams when the market picks up. The Spanish government are also reported to have increased the country’s debt to over £300 billion, a move which will have an impact upon government spending in the immediate future.
On a more upbeat note there are a few posters suggesting that a number of developments are up for sale at a fraction of the original selling prices and there does seem to be some interest. However, the Spanish property market seems to be making a bad name for itself at the moment with many investors being left with partly finished properties as substantial numbers of construction companies hit financial trouble – in line with the sector in the UK.
There is a mixed feeling as to whether the Spanish property market has bottomed out. End
Good news for Turkey ? Discuss
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We are owners of a newly finished apartment in a very nice complex 10km before Marbella, up the mountain in Elviria Hills. While what you say is generally true, I subscribe to 2 Spanish newsletters and read them regularly. I''ve yet to see any real bargains or fire sales, although it is true that some Brits who bought for speculation are walking away from their deposits and letting the banks take over.
What is definitely true is that there is a huge oversupply of properties which it is estimated will take at least 3 years to clear, and many estate agencies are closing. The construction sector is in dire straits and this year''s tourism was not sufficient to keep many businesses open. This, however, has been attributed to the general world financial crisis and to the soft pound.
I''m sure it is true that if you are physically there with cash in hand (next to impossible to get a mortgage now), you might find a few great bargains. It is not significantly different from what is happening here. A few builders here have also dropped their prices by up to 40% but the majority for now are holding fairly firm.
It is also the case that many Scandinavians are now buying in Spain, although Brits are still the largest foreign national population.
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Can''t really see what the Spanish property market has to do with anything going on in Turkey.
Spain''s property crash is linked to the ''credit crunch''
Turkey has a different set of economic circumstances as to why the property market is doing so badly there, far too much supply, not enough turks with money to buy, and difficulty establishing a mortgage system. A strong lira are the main reasons
The credit crunch problems are yet to hit Turkey, that''ll be sometime next year probably
certain areas are massively overpriced, usually where foreigners buy. There needs to be a correction in the pricing for the market to pick up
If a property is on the market at £100,000 at it''s 40% overpriced it''s no good hoping for a to come along, put the property on at the correct value £60,000 and there might be some interest
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What the Spanish and the Turkish real estate market have in common is the lack of available funds for primarily British buyers to buy. This is what has largely caused the downturn in the Spanish property market, and I believe also here. I have very recently seen 3 potential British buyers try to get a UK mortgage to buy a property in Kalkan, in vain. Idem for Spain.
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Cosetta, I would agree with you if you are talking about Kalkan or other areas with a predominately British population, but these are very few and they are microcosms of Turkey as a whole.
It is not British money that dictates the value of the Turkish property market.
These microcosms of British buyers have been unrealistically priced from the beginning, because the Btits have been paying. If there''d been no ''credit crunch'' then the prices would have continued in these micrcosms.
Prices in kalkan have been high, not because there''s anything ''special'' or ''different'' about kalkan, it''s just they''ve asked the price and people have paid.
The taxi drivers have a similar mentality, they think if we set the price, they''ll just pay and usually we do!!
Remember prices overall in Turkey have been declining for 3years or more, long before the ''credit crunch'' came along.
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Yes, in this you are correct. I was really comparing only the tourist destinations in Turkey with similar ones in Spain, both dictated by foreign nationals and their access to loans. It is also a fact that something around 30-40% of the economy relies on tourism or tourist-related sources of income. That is not the same in Turkey. So what hits that sector in Spain will have a huge impact on the economy, as it is now doing. But many of the Brits, Germans and Scandinavians who bought in Spain live there and have no intention of selling.
And even with all its problems, property in the coastal areas of Spain is still expensive even compared to Kalkan. It is difficult to find a 2-bdrm apt on the Costa del Sol for under €250,000 unless very old and in need of renovation. Small villas with a pool run between €700 - €1 million.
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John,
When you look at kalkan, there aren''t ''lots'' of people prepared to pay the price. In fact very few
When you consider kalkan property is up for sale to anyone in the world, not many have taken up the offer.
It must be at least 95% British who have bought the newer properties here and very few people from elsewhere
If kalkan was a great place to invest in property there would be much bigger fish investing here?
With it''s limited space and relatively few properties for sale [I think 500 hundred or so on the market at the moment] only 700 hundred have been sold, and plans to develop another 1500 at least, [these figures I have picked up here and there, anyone please correct me if I''m wrong]
Development is very slow. There were c.25 planning applications last year and likely to be fewer this year. With 40% unsold completed properties in kalkan right now, I think the prices are a tad unrealistic and very few people are willing to pay the price
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OK - if that is true Kalcamp - why do we now have 4 banks in town (when there was only 1 bank in town 2 years ago) and reportedly another on the way - surely they must think there is some investment potential in Kalkan and aren''t some of the big developments around like the ones in Kalamar Bay and that La Vanta one - considered big enough investment fish..???
That said - I do agree that we have enough overpriced properties for sale and I don''t want to see anymore but there are still big fish around dipping their fins in...!! ;)
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Kalcamp - I don''t think the number of planning applications submitted is necessarily an indication of the number of dwellings that will ultimately be built. >:D
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We bought 2 1/2 years ago and looking back we probably paid over the odds - by todays prices - but hey ho, we love our pad. We have also just bought another place! I reckon that whereas the prices were probably over inflated a tadge in the past they have now levelled out and will continue to steadily rise in future. Development will continue and some of the properties that have been unsold have been unsold due to the standard of finishing. Maybe they will be redeveloped or finished properly and once this economic blip has passed then things will even out and return to normal.
I can''t help thinking that there is a lemming/flock of sheep feeling out there and because the government (who are the biggest bunch of crooks and liars going) say there is a recession etc that we all start to worry and act how they want us to. I reckon they manipulate us into doing what they want!! Anyway - to hell with them, I''m still going to drink wine, go to Turkey, and do what I want. (I am using less fuel though and brewing my own wine).
Feel free to fire bullets at me or move the post!
xx
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I recently read an article concerning development in Spain.
They have built in one town 13,500 (yes thousand) apartments of which they had sold 3000.
It said house building in Spain makes up 40% of there economy, in one year they built more properties than the U.K., France and Germany put together for the same period. These figures if true are real over development.
I was told 3 years ago that Kalkan was being upgraded as such to the level of KaÅŸ and i think the coming of more banks and Businesses reflects this.
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Good post Wendy soo agree
Regards Doug 8) 8)
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Yes Wendy,
my sentiments exactly.
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Layla,
You probably are correct as there are buildings errected that do not have permission from the authorities.
It is possible to check in the Kas office to see if a house does have the correct permission.
Wendy,
Let''s hope this economic ''blip'', as you call it, soon passes and things can get back to normal
However it''s not the world economy that is the primary reason for the big declines in the value of Turkish property, as Turkish property values have been in decline long b4 the ''credit crunch'' hit.
When you say things have ''evened out'' over the last 2 1/2 years you seem to be under the impression prices have been rising to compensate the previous over valuations.
As you say, prices were too high 2 1/2 years ago. They''ve been falling steadily ever since, continue to fall today, so how can they have ''evened out''?
Houses valued 2 years ago are still up for sale at the same price today, estate agents are very reluctant to reduce prices to a more realistic level
Let''s hope prices do begin to rise steadily in the future, but for now there is no such indication
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Spot on, Wendy.
We have also just bought another apartment, identical to the one we bought three years ago but 20% cheaper!
We are not looking to make a quick killing so it actually doesn''''t matter to us very much if prices fall a bit further. Statistically, for any long term investment the best time to buy is during a falling market, not a rising one. Sooner or later prices will catch up again. In the meantime, the rental income we achieve (approx 7%) gives us a healthy enough return... better than we could hope to get on a buy-to-let in the UK anyway... plus we love staying there ourselves. no brainer.
We have already had more enquiries for booking next year than in any of the last three, so it doesn''''t look as if the credit crunch is going to affect the rental income too much. Maybe the average Kalkan visitor is crunch-proof?