Voices Newspaper Altinkum Didim Turkey - Mortgages for foreigners on the horizon

REAL estate demand from Britons and the Scandinavian countries has led to Turkish banks preparing a special mortgage product for them.

The announcement for the mortgage laws have not been made yet but Turkish banks, such as Garanti Bank, İş Bank, Akbank and Finansbank have taken action to offer new products to sell real estate to foreigners.

Banks are working carefully on their new projects for foreingers, since mortgage is a new and risky business.

In this competition, demand from Holland, Denmark, Germany, England and Skandinavian countries for real estate in Turkey played a crucial role.
Turkish banks that took on debt from abroad to finance long-term home loans, have activated their law departments for this demand.

Since foreigners live abroad, they cannot measure their risks, banks say; and so to minimize risk with mortgage loans, they are developing special new tools.

They also state that within the past two years, demand has increased but when Turkey enters the European Union, foreign demand for real estate in Turkey will continue to increase.

According to bankers, Turkey is more attractive, compared to investors' home countries when comparing real estate prices, with Istanbul and Bodrum the most attractive areas.

Residents of England and Germany prefer Didim in the Aegean region, Fethiye, Alanya and Side in the Mediterranean. Residents of Ireland, Denmark and Holland also would like to buy a home in Turkey.

Ergun Özen, general manager of Garanti Bank, said that foreigners might create large volumes in the future in this sector.

He also said that banks are working to respond to demand from foreigners, but they can not measure the risks taken on with home loans given to foreigners because information is only available in institutions in their countries.

“We don't have any customer information and because we cannot access information easily, we have to keep the guarantee ratio high when granting a loan to foreigners,” says Özen -- when a loan is granted, they finance 65 percent of the total value of the real estate instead of 80 percent.

According to Özen, the main demand (through intermediate agents) is for summer homes and mainly by elderly people from Skandinavian countries and England.