Real estate demand from foreigners have caused Turkish banks to act. Garanti Bank, İş Bank, Akbank and Finansbank, getting demand from Holland, England and Skandinavian countries into consideration, prepare a special product to sell real estate to foreigners.

The announcement for mortgage has not been made yet but Turkish banks have taken action to offer new products to sell real estate to foreigners.

Well known 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.

Bodrum stands out

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.

Residence and summer homes are preferred

Demand in the real estate sector in Turkey makes foreigners investors and buyers. Real estate companies attack the sector in Turkey, and foreign consumers want to buy a home. Both aspects are taken into consideration by Turkish companies who built homes for foreigners, mainly as residences and summer homes.

After the announcement of the act which makes sales of real estate to foreigners easier, companies like Ağaoğlu, Yapı Endüstrisi and Koray have started construction in Bodrum and Milas.

Foreigners might create large volume in the future of Turkish real estate

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.