Keith’s Weekly Property News April 24-2022

Due to time constraints during this unusually frenetic period, I will give brief notes once again this week, hopefully with less typos than last week.

CBI update:

Everything is a bit unclear at this point. When the news broke that there would be a move from investment level of 250K to 400K most industry experts expected the announcement in the Official Gazette to happen almost right away. 10 days later it still has not been published and thus ramps up the speculation mill. Most experts still believe it is inevitable, with many predicting before or after the Bayram Holiday (starts May 2. But because of the weekend and the May 1 holiday, it actually means earlier. Others seemed to have pulled the date of June 1 out of the hat. The truth is nobody seems to know for sure and the ones who do know are not talking. So that is all I really have to say about that. If you do want to do CBI at 250K, you should be in full hunt mode to find properties. I outlined the time frames for that in detail in last weeks notes.

I often try to address many of the issues that get brought up in the whatsapp chats. This week a few people pointed out that people who signed on tenants in lira contracts last year probably took a haircut in terms of USD based yields. That is indeed true, yet we should be non-alarmist in our assessment. 2021 was indeed a truly remarkable year in every sense for Turkeys property market. Certainly not every year will follow that trajectory, from Lira 8 to Lira 15. The consolation for lower yields due to lira collapse is that the properties appreciated anywhere from 20-40%…in USD terms. That is phenomenal and came as a great surprise to me. All we can do with under-performing lira rentals is to jack up the rent each year according to inflation index. Luckily, we did not sign so many of such contracts, but we definitely did some. We are doing many more now and we are much more cautious in our approach, Where possible, and if the property lends itself to it, we are trying to secure currency contracts. This is not possible for every type of property. Difficult, for example, if it is commercial property which has wider appeal  to Turkish market.  I believe we will find our way and these issues will not materially impact the quality of the investment over the long term. We are now also focusing more on securing expat tenants. I have wide experience with this and know all of the places to market, plus the ability to network with key agents in high density expat neighborhoods such as Beyoglu and parts of Sisli. We should be able to, going forward, secure perhaps 75% of our contracts in USD. Mid term rentals will comprise a certain percentage more.

Finally, on that point, we do have to accept some currency risk while investing in Turkey. Entry and exit points are not irrelevant. We need to buy in at the right price, with the time being less of a knowable element. We want to buy at the right price, end of story. Then you will need to exit at the right time. Give it 5 years, is my view, though longer term can be very sensible as well. Turkey has the ability to soar, why would you want to pull out early? Besides, it is a lot of fun and a wild ride, where hardly anyone gets hurt in the long run. Call it the “Pirate Ship” of international property investing. Lots of gut-wrenching swings, but a safe off ramp is mostly there. I am sure we cannot say the same for many other international real estate markets. I have not heard many success stories from many EM markets in the past 5 years. No doubt they exist, but…

Don’t fight the demographic. Turkey has that and it will matter more and more in the years to come.

Last week was an interesting week, as in our bid to close out some CBIs, we hunted high and low and looked in places we had never considered. Fruitful, but punishing on the whole staff, We have 1 more week until the Bayram Holiday, so we will try to sustain the pace until that period, after which there will be a slowdown from at least May 1 to May 6.

The people who are getting the job done are the “squeaky wheels” who give us clear directives and time lines. Don’t be shy about that.

Regarding renovations, the long used 300 to 350 USD per sqm model that I re-iterated for the past several years seems to be quickly getting outdated. Rising labour and material costs are contributing to this, as has the property boom. The property boom, as evidenced by record sales in March to Turkish nationals and foreigners alike, leads to pretty intense competition to retain good tradesman, which I believe we have. Our decision to use Turkish materials wherever possible (a wise choice in my view), allows us to keep pricing within the 4000USD per sqm mark, still remarkably cheap by Western standards. These are based on the net sqm, footprint of the property. Additions, such as terraces and balconies that did not previously exist, will of course push this number upwards, as will Franke kitchens and Gaggeneau fittings.

Prices seem to have stabilized for the time being and we are seeing good opportunities pop up sporadically. Those usually have to be moved on quite quickly in terms of execution, if we want to capitalize. I have set aside some cash to fast-track deposits on the properties I like. We do the initial due diligence and if all looks good, I am ok with backstopping a deposit til a buyer teps in. It is often an effective way of speeding up the process. We are typically getting evaluations returned within 48 hours and are doing our best to get Land Registry appointments as fast as possible. Average time looks like 5 days if there are no procedural snags.

There is a always a lot more to say, but I am sure it will come up in the zoom discussion.

Here is a shorter than usual list of viewings we hope to have this week, subject to availability and initial CBI checks. (distributed in meeting).

Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.

We invite you to join us for:

#IstanbulInsights with Keith

On Sundays at 20:00* Istanbul time

*13.00EST/ 19.00CET/

20.00TRT/ 02.00SGT (Monday)

Via Zoom:

Password for logging in: 1234

‘Just Click’ the above link and be part of the Istanbul Insights with Keith’s property market updates.

Every Sunday we will share more info about the best property deals of the week, market developments, followed by Q+A time.

For more info:

Keith’s Weekly Property News April 17 -2022

This week everything will be abbreviated, including our zoom session, which I will have to end at 21.15 sharp.

Basically, as I am sure everyone knows, it has been announced that the CNI amount will be raised from 250K to 400K USD. Beyond that there is not much we know for sure, nor will we til the decision is published in the Official Gazette, along with all the relevant details.

There has been much speculation, which essentially centers around 3 points:

  • Will people who have their Doviz Alim Belgesi (Or exchange certificate from the Central Bank) automatically be accepted in the 250K USD regime. Keep in mind, to get this document, you already need to have the property details of the property or properties  you intend to buy.
  • It is believed, but not confirmed, that people who have applied for the “certificate of conformity” will continue on with their citizenship process without any effect or change. I also believe this to be true.
  • Whether or not there will be some future date extension for people to complete the CBI program, or a deadline. I am very unsure of this, leaning slightly towards the opinion that there will not be, though hopefully I will be proven wrong.

I repeat that the above items are speculation. There is even speculation that the decision will be reversed or not published at all. I am highly skeptical of this.

Unfortunately, there is not much we can do apart from wait for all the details to be published, likely this week, but again not guaranteed to be.

By way of advice, I cannot really even offer clients much. We have clients who are travelling to Istanbul this week. With quite a bit of luck, we may be able to beat the clock, especially if there is some kind of extended deadline.

One thing for sure is you should be careful about agencies or developers trying to get you to sign onto deals very quickly with the guarantee that they can get you the deed ina few days and apply for the passport. This is a clear falsehood. No one can make such guarantees. There are time farmes for each step, from wiring money to securing valuation reposrts to getting an appointment to close at the registry. Yes, there aqre ways we can TRY to expedite all of the above, but guaranteeing it is just misleading.

For those who really want to close out their CBIs the secondary market is the slow way to go. That is why we have taken steps to source deals from developers, which are in theory faster. However, if that kind of property does not appeal to you, we understand. I suppose in any event, the practical thing to do is to carry on your property searches.

We are currently working one to one with many clients who have their POAs and Turkish accounts funded or at least open, in the belief that it may be possible to get them over the line.

Everyone has to make their own decisions regarding what is the best step for them. Getting a POA issued remotely? Doing the same with the account? Buying online, and so forth. Some will also be in whether it is 250K or 400K, so me advising people in all cases does not seem reasonable as everyone has much different motivations, budgets, timelines and buying preferences.

If you really do want to get it done and done fast, reach out to me and I will try to offer quick but safe solutions. For example, we may want to introduce escape clauses with developers, meaning that if the amount gets raised to 400K mid-process, we have the right to have deposit refunded. In many cases, it may not be accepted, but we can at least try. This will not work, period, on the secondary market.

So, in a way, folks, that is it for updates at the moment. Tonight , we will discuss in more detail how we may want to proceed, in theory, at such a time.

We also have the highly problematic “dangling” CBI, where the client has purchased maybe one or two properties, but has not reached the 250K mark. Obviously, we are leaving no stone unturned for these clients.

Property sales in March were very high, the highest number on record at over 130.000. Turks view property as the only hedge in these uncertain inflationary times.  I expect one of the original aims of the CBI, to sell  the over-supply of new builds on the periphery of Istanbul or other cities, has largely become superfluous.  The need for hard currency no doubt still exists, but we must also consider that there are many non-CBI buyers of Turkish property and the proliferation of new passports being given largely to individuals from a few nations, was becoming a bit of a political hot potato. Nonetheless, there is little doubt that foreign buying will continue, though the CBI numbers will likely drop significantly.

Unfortunately this week we will be doing without a staple of our weekly zoom sessions, the presentation ofm property picks. This is being done mostly on a 1 to 1 basis, but we hope to return to our original format next week. This week we will do more Q&A and let Aybike, CBI lawyer, share a few thoughts. I thank everyone for ntheir patience in waiting for me to get to their whatsapp messages this past week. I believe I returned to everyone. However, if you are really in buying postion, ping me again tonight and we will do extra work and assign staff to your request.

Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.

We invite you to join us for:

#IstanbulInsights with Keith

On Sundays at 20:00* Istanbul time

*13.00EST/ 19.00CET/

20.00TRT/ 02.00SGT (Monday)

Via Zoom:

Password for logging in: 1234

‘Just Click’ the above link and be part of the Istanbul Insights with Keith’s property market updates.

Every Sunday we will share more info about the best property deals of the week, market developments, followed by Q+A time.

For more info:

Keith’s Weekly Property News April 17-2022

Keith’s Weekly Property News April 10-2022

It was a bit of a frustrating week. We had big plans to ramp it up, but were let down later in the week by lots of last minute cancelations of viewings for a host of reasons. Nonetheless, we have a full line up of 6 viewings tomorrow and we hope to add many more for the week.
I will also be holding a zoom session on upcoming Izmir Round 2, so quite excited about that.
To Airbnb or not to Airbnb, that seems to always be the question.
I have made my views known on this several times, but also backtracked a few times as well. Obviously, I want to do what is commercially in the best interest of my clients, but I am also cognizant of the environment that we operate in. Rather than engage in my usual verbosity, I will put in point form the salient and relevant points.
-You collect payment in currency (some properties are also suitable for collecting in currency as mid term and long term rentals, by the way, so I am not sure how vital this pro is

-You can reserve the property for personal use. (You can also do this for mid-term rentals, which are currently in very big demand as well.
-You MAY be able to outperform the yield you would get on a long term rental (do not forget to add your sweat equity and time into that equation). No Airbnb management company takes care of your taxes, btw. Other things will come up that will require your attention and time.
-It is very hard to operate an Airbnb legally in Turkey. You have to get a special license, which in itself is a headache. But the deal killer is you need the permission of all owners in the building to get that license. Good luck with that. As a result, 99% of Airbnbs operate illegally, to put it bluntly. Of course, most of them operate without issue or interference from the authorities. However, there are many notable exceptions, such as:
1- Because you are operating illegally, there is actually no mechanism to pay the taxes and your income can always be queried. To put it shortly, paying taxes is up to you and it is all very fuzzy because you are basically declaring that you are running an unofficial hotel and proving to the authorities your real income is a pain.
2- Somebody, somewhere does sift through Airbnb to check about taxes. I have personal experience through contacts of fines for Airbnb listings.
3- Turkey is home to strict anti-terrorism laws. Most Airbnb operations do not record their guests with the authorities, as proper hotels do. If a terror event occurs, and it turns out that the perpetrator stayed in an Airbnb, widespread closure is not off the table. As is some messiness in the investigation. Very unlikely scenarios. But add in the fact that local hoteliers have some easy leverage here. I suppose they are pleased these days with occupancy, but should that change, Airbnb is low hanging fruit in terms of a target.
4- Neighbors are also a factor. They OFTEN complain and sometimes even try to extract payment from the situation. I was on the paying end in Istanbul and Budapest, so that is no myth.
I ran the #1 TripAdvisor property in Galata for about five years back in the early 10s. There is much more I can tell you about the experience. Suffice it to say, there are many surprises and unknowns. Just crushing out a big fat yield every year is more fantasy than reality. Below are my tips on what makes a succesful Airbnb in Istanbul (and perhaps Turkey).
The property should be in excellent condition. The half renovated places mostly stay emtpty. The successful one are in good hotel standard, Expect to spend from 5K USD to 10K USD on all furnishing and basic set up cost.
If your property is on an upper floor and there is no lift, it had better have a nice view, otherwise it will not perform well.
For Istanbul, the main areas are Sisli and Beyoglu. Fatih is as well, but it is much harder to find properties in the touristic areas. Besiktas can work as well, but some parts are unsuitable. Kadikoy may work, but I suspect the buy price vs income would not be favorable. Areas like Kagithane and other suburbs are largely untested and would probably have marginal appeal.
Sea view always gets a premium, but decent city view with a balcony or terrace can help.
If your property is such that it would likely not generate 70 USD per night, the endeavor may not be worthwhile. I think the successful Airbnbs are a bit higher end. Better profile of guest, greater income to offset unexpected costs and just, lets say, more worth the headache for everyone involved.
“Aile” or buildings that have many families in them will be unsuitable. In Turkish culture, people really want to know their neighbors.
Neighborhoods where there might be elevated security concerns are also off the table as far as I am concerned. No windy, unlit stairwells leading to secret access through back entrance etc.
Garden apartments have limited appeal. People do not travel with their pets or are not so concerned about having a garden for their children when they travel, and these are the appealing sides of those properties.
Proximity to Metro is key. Not more than 10-12 minutes walking.
Expect low bookings in Jan, Feb, March.
There are many other tips you can get from websites. I have just tried to be specific about Istanbul and the property end of things.
Again, I hope I have not discouraged or alienated too much of my client base. I am trying to present a balanced view on an important issue and one in which I myself have been struggling to articulate in the past months.
We are, and will continue, to run Airbnbs, and most likely, more of them.However, I would like to stick to Airbnbs that meet the above criteria. I am happy to evaluate your property and let you know if I think it is suitable for Airbnb or not. Regarding income, with the ever shifting landscape of dare I say post-Covid, I am reluctant to give projections on income, but could probably give you a good idea about nightly rates.
Now what I really suggest is that you target the mid-term market, which is really under-supplied. I get emails every day asking for rentals for anywhere from 1-6 months. I almost never answer. With these types of rentals, you can achieve all of your objectives while also being on more solid ground legally and in better stead with your neighbors:
-paid in currency
-can reserve property for personal use.
-Ultimate flexibility in tax terms (more on that later).
You can also transition into a long term rental or an Airbnb rental if you are not happy with performance in the first 6 months. I suggest this as an excellent avenue and I will fully support it, as well as apply resources to the enterprise, as I feel it aligns with my interests more closely. I have some concerns about being the repository of unofficial, mediocre Airbnbs lol.
Putting aside being tongue in cheek, it really does seem to be a good path. There are so many digital nomads and remote workers, people coming for extended medical treatments, Erasmus university exchanges, business travelers and more. It is a market long time group member, Andreas, has long been a proponent of. I agree with him fully.
Now on to the market. We are looking for a better week than last week and are taking all steps to make it happen. If you are in country, please be vocal. We are here to try to help you meet your needs and I still feel, in so many ways, that we are the best agency to do this, though we are constrained in some ways by the clients demands for the more popular neighborhoods.
Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.
We invite you to join us for:

IstanbulInsights with Keith

On Sundays at 20:00* Istanbul time
*13.00EST/ 19.00CET/
20.00TRT/ 02.00SGT (Monday)
Via Zoom:
Password for logging in: 1234
‘Just Click’ the above link and be part of the Istanbul Insights with Keith’s property market updates.
Every Sunday we will share more info about the best property deals of the week, market developments, followed by Q+A time.

For more info:

Keith’s Weekly Property News April 10-2022

Keith’s Weekly Property News December 21-2021

If ever there were any doubt that we were in a full-blown currency crisis, last week put that to rest. As the USD lurched past 17, Turks let out a mutual gasp of horror. The USD had doubled in just a few months, with most of the damage in the past 30 days or so. Now, looking forward is of no use; nobody knows what will come day to day. In a bold move, the minimum wage was doubled almost overnight, a move that did nothing to revive hopes in the currency. Anyone who has debts or commitments in USD must feel this rather acutely as their burden would have exactly doubled in a short span of time.For our little corner of the world, downtown Istanbul real estate, it has indeed caused havoc. Most of the budget properties are snapped up right away as Turks seek safe havens and the overwhelming majority of sellers are sitting on the fence. Many, of course, have been raising prices, but that hardly matters as it seems unlikely that they will find buyers, foreign or otherwise. In my 15+ years in the market I have never seen anything like it, have never witnessed such a paralysis. We make 50 calls and we end of with two viable and real sellers. That is surely an all-time low. As I have said in previous weeks, there needs to be a stabilisation period before some sense can be made out of what is happening and for the market to return to whatever kind of new norm it will be. There was certainly no evidence of that this week.

There were articles highlighting record numbers of sales to foreigners, and perhaps there were, but one wonders where those properties were being sold. I would imagine that would be bargain hunters snapped up what appeared to be discounted properties in developments in the far outlying reached of the city. The kind of properties that had been virtually unsellable a short time ago probably became irresistible for a certain segment of buyers. But what kinds of yields will they produce? What are the future prospects of some of those locations? It is anyone’s guess. It is more like gambling than real estate investment purchasing in those remote areas where transportation to the city is a vast and time-consuming endeavour Also, probably those stats were bolstered by numbers of sales on the coastal regions where property values often appear to be cheap and particularly so these days. But anyone who knows the coastal areas knows that good locations there are often expensive and largely is a hard currency denominated market. Nonetheless, it is a fact that more Turks than ever are buying right now. They fear housing prices, along with everything else, will soar. I have not seen the breakdowns but I would imagine the first-time buyers are also at record levels. Given all of the above, we should certainly expect to see rather large Lira increases in pricing. In the end savvy USD holders should experience some benefit from the chaos.

We also must link our contracts to USD at time of signing if we want to hold deals together. In a nasty twist fate, work at the registry and with valuations all appears to be much slower these days, so our average closing time has jumped from 7-10 days to perhaps 20 days, which is more or less an eternity these days with ever-changing landscape. Stabilising USD price with deposit agreement is a must use tool these days. Speeding up the processing of deals is largely out of our hands and the waits can be agonising, knowing full well sellers can back out at any moment after a lot of effort has been put in to get to that point.

As some solace, I try to take a long term view on matters. Will you still be able to purchase real estate in solid downtown locations for under 1500USD/sqm in 3-5 years from now? If so, surely this will be the cheapest global mega-city in the world to purchase real estate, probably on par with downtown Quito. Does that even make sense? If the past few weeks had not knocked the bravado out of me, that would be a bet I would still take. I think it will prove to be true, but a lot of patience and fortitude will be required to ride out the storm.

In this environment, writing anything with an optimistic note would seem an act of oblivious madness to what is going on around. All I can really muster myself to say is that I have experienced every kind of crisis under the sun in my tenure here in Turkey. Somehow, Istanbul real estate makes a come back each time. Is this an existential crisis for the country or for the property market? I just am not sure. Will it result in profound and hitherto unthinkable changes? Also, I just am not sure. Rather than making sweeping claims to having any of the answers, as is the fashion with this little community, I am going to float the above questions and the essential dilemma to the group and see what we can come up with collectively; a collective response to the current maelstrom that we, in one way or another, all find ourselves in, being Turkey lovers, hard-nosed real estate investors, or simply those seeking Plan A/B/Cs in favourable climes.

I am sharing far fewer links than usual this week as there is a strong likelihood that many of these will be invalid by the time we hit the phones tomorrow.

Property links to be distributed during Zoom session.

Keith’s weekly property news November 17-2021

If I had known what kind of week it was going to be, I probably would have planned a vacation. The rapid deterioration of the lira left sellers, myself and just about everyone feeling anxious and disoriented. Most deals that we were working on collapsed. New property arrivals on the market have been very limited in the past few weeks; many owners opted to raise their prices.

I am still trying to process it and have been hesitant to accept a re-set on prices. I believe that things have to stabilise before I can sift through the detritus and see the way forward. At this point, all I can say is that the volatility has caused a significant dislocation in the market and it might not be sorted out for an undetermined period of time.

Developers are also facing huge price increases in their costs in lira terms and are raising their prices across the board. But will there be buyers at those prices? For currency holders, you will certainly not be paying more, but the fact is, you should probably be paying less. As I have maintained in the past, house price increases can only close a portion of the gap in currency depreciation. So, if we posit that the currency has depreciated 20% in a matter of weeks, we could allow for a 10% increase in housing, but certainly not 20%. Some sellers even overcompensate and put their prices even higher. This is untenable for us and we will not transact under those conditions.

The silver lining playbook? Adapt. Keep focussed on value. Move lightning fast when opportunity appears and also adjust the way we frame deposit contracts. From now, we will be fixing the contracts at USD at the time of the deposit agreement. In that way, if something slows up the closing, the sellers will not panic and we will be able to close the deal. It seems like an equitable solution.

How else can we adapt? Istanbul is a mega-city with 20 million people. We mostly focus on neighbourhoods where our clients would enjoy living. We are making a combination of lifestyle plus good, common-sense real estate investments. 

Perhaps we have to modify this somewhat. Could a percentage of our clients just go where the good deals are, regardless of the lifestyle component? This is tough in practice. Most people invest by emotion and want to identify with the property they are purchasing. I am in favour of a more pragmatic, opportunity-driven strategy, at least for that percentage of clients who prioritise the investment angle.

 I think places like Kagithane, on the secondary market, will see less increase in lira pricing. This can be a great opportunity. We should be snapping up properties there that are close to large development projects and transportation links. That neighbourhood will be unrecognisable in 5-7 years. Of course, it takes time to source deals there, but if a client commits to my proposal, I will try to find a basket of new build properties there that offer 6-7 % yield with good capital appreciation prospects. I have even considered opening a small office there in order to make it a new base. Beyoglu, Besiktas, and to a lesser extent, Şişli, will continue to be tough deal making environments if this latest madness continues.

Owners in these areas are often Western-leaning and certainly view the world through USD terms. In Kagithane and Eyup we can say that it is less the case. That is an arbitrage moment.

I certainly make no promises, but it seems that crisis often brings opportunity. It would be a pity to miss it because we were asleep while at the wheel or fearful when we should have been greedy. I hope we can address this head-on in tonight’s meeting and , as always, I am counting on the brilliant minds in our community to help me tackle the issues hand in hand, as we are all in this together and seek not only the best outcome for ourselves, but also keeping a mind’s eye on the future welfare of the country we have chosen to invest in.

What other arbitrage possibilities exist? Perhaps focusing on developers who have almost completed projects, but not sold all their units. Negotiate bulk purchases at previous lira prices? They will effectively be taking a USD loss, but this might be palatable if other alternatives for them are less appealing. Their overall costs will have already been paid for (labour and materials costs will have already been booked). They might adopt a GMTHO attitude (get me the hell out)

Hunting for distressed developers seems to be a perilous task and one I am not really confident enough to seek out in this milieu of uncertainty. Developers who have just started projects seem also to be risky. Undoubtedly, their preference would be to delay projects as much as possible as their budget projections must have run amok in the past few weeks. Therefore, a projected finish of January 2023 looks unattractive as that might very well be July 2023 or beyond. It seems foolhardy to tie up your money over such a period.

I have been in close contact with 2 developers in particular to try to strike a deal on group purchase, but rather predictably one fell through last week. Hopefully, I will have good news on that front  this week.

Forgive a rough Canadian colloquialism, but the past week was mostly pi%+ing in the breeze. Much of what we tried to do just blew back at us without any result. Next week, we are going to slow things down a bit, take a broader look at the market, and then when we feel we have our bearings set, move forward with sure steps.

I feel confident an opportunity will present itself. We just need to keep finely attuned so that we can catch it.

There were several other news-worthy items from the week, but we can discuss those in the zoom session.

Property links to be distributed during zoom session.

Keith’s weekly property news November 14-2021

Even compared to challenges in the past weeks, this week was hands-down the most arduous week for sourcing properties in the secondary market. Every single factor seemed to lean towards a poor deal making environment; super slow execution of valuation reports, the USD cracked the psychological barrier of 10, generally higher prices, sellers who either turned out not wanting to sell or to sell very reluctantly, and the inefficiency of some of the agencies we by necessity have to work with to find additional properties.

We had lots of last-minute calculations, were taken to locations very far from what pin maps indicated, and taken to properties that hardly resembled the photos. In one instance, we were even taken to a nursing home, only to have one of us allowed entrance due to health risk. Obviously that property was not going to work out for us as I would not even want to touch negotiating the termination of the rental agreement. That episode had me thinking it was just not going to be our week.

In addition, I suspect that many would-be sellers held off on putting their properties on the market in such an uncertain market. The property market, I have always maintained, functions more smoothly and efficiently when the environment is stable and people are able to have some visibility on large financial decisions and transactions. We are clearly not experiencing that at the moment. Therefore, I expect sourcing of properties on the secondary market to remain challenging during these volatile days when inflation is rearing its ugly head and currency depreciation has been extreme.

For CBI buyers who want multiple properties on the secondary market, all of the above can slow down the process of finding 2-3 quality properties. Therefore, a bit more insistently, we are encouraging our clients to consider the 1+1 model; one property on the secondary market and one from a new build project. With that in mind, I have over a dozen visits to new build projects planned for this week alone. I hope to have 2 viable alternatives by the end of the week. We already have one, but the unit size and entry price may be high for some investors, so we want to also offer one where there are a decent selection of studio or 1 bedroom properties at lower entry level prices. Our standards of what we expect are quite high; we need properties that value well, that are not very far from the city centre or at least part of a new emerging city centre, offer prices where there is some expectation of growth, and where yield expectations are at least moderate. I do not think we will be so lucky as last time, where we managed to do a bulk purchase with USD backed rental guarantees. However, I think we will have some attractive units to propose.

Of course, if clients have a strong preference for the secondary market, we are trying to accommodate that. It is, after all, our signature play. Yet, given the USD/Try dynamic and rising prices/reduced stock on the secondary market, we would also do well by trying to get the best of what the new build market has to offer. This video Ladislas, The Wandering Investor, yet to be made live, sums up my thoughts on the subject.

Now, to end on a very positive note. The valuation system is changing back to the old system, effective tomorrow. Why is this such good news? The new system was beleaguered with inconsistencies and was painfully slow. That slowness led to broken deals especially when currency shifts of 10% plus were occurring in the time between ordering the valuations and receiving them. Also, in that system, the process was entirely out of our hands. Now, we are back in the driver’s seat and can get the reports lightning fast, once again. Also, we can have a dialogue with our chosen appraiser. In the case of the gentleman I work with, if something comes in lower than I expect, I simply pick up the phone and request the rationale behind the discrepancy.

In almost all cases, we end of seeing eye to eye, as this individual knows our particular neighbourhood very well and is attuned to real market prices. In the centralised system that they experimented, I heard stories of appraisers from Ankara giving very low valuations. The real estate prices in Ankara are quite low, so it is not that surprising. In the end, the main issues were the clunkiness of the system; we could not get reports issued or they were rejected because the owner of the property owed a few dollars to the municipality, or they could not work out how to even pay for the report and we were sometimes only notifies a few days or week later. Some owners just got frustrated and said they would prefer to sell to a local than go through the headache. Now, all that is changed again. We will have reports issued mostly within 48 hours.

And now a peak at next week’s hopefuls.

Property links to be distributed during zoom session.