Some might view the title of this article as a typical attention-grabbing tactic. However, it's important to note that since March 2024, a new law has been enacted by the Ministry of Environment, Urbanization, and Climate Change, in collaboration with the General Directorate of Land Registry and Survey and the Real Estate Valuation Department.
Making Over 90% of Istanbul Projects Unsuitable for Turkish Citizenship!
Then we realize that this title is very specialized and the content writer has over a decade of experience in real estate investment and Turkish citizenship acquisition.
So What is this law, and how has it created such a significant imbalance in the market? It is also crucial to ask why only a few are discussing it, while most of the real estate sector—including brokerage firms and sales offices—seem to overlook it and carry on with their usual practices?!
What is the real estate valuation law in March 2024?
The official text of the law spans 10 pages, detailing the directives to official authorities, the rationale behind the legislation, and specifics related to real estate valuation. Here, we will focus only on the aspects relevant to our discussion.
We also know that To obtain Turkish citizenship, you must have a property evaluated at a minimum of $400,000, even if the actual purchase price is lower.
In the past, certain state-licensed real estate appraisal companies in Turkey would value new properties at their sale prices without thorough examination. For example, if you buy an apartment under construction, even if it is in the first stages of construction, at a price of 400 thousand dollars, you get a real estate evaluation. It is more than 95% identical, and therefore it was sufficient to ensure obtaining an appropriate real estate evaluation to obtain Turkish citizenship if you purchased a property worth $420,000.
The amendment introduced in the March 2024 law specifies that, moving forward, only evaluations from GEDAŞ will be accepted for applicants seeking Turkish citizenship.
What is GEDAŞ company?
GEDAŞ, a government-approved real estate evaluation company with a branch in the Küçükçekmece area of Istanbul, is now the sole entity authorized to provide evaluations for Turkish citizenship applications, according to the new law.
So far, everything is clear. But how does GEDAŞ's involvement affect the eligibility of most Istanbul projects for Turkish citizenship?
GEDAŞ conducts real estate evaluations by comparing property prices within the same area, aiming for fairness in its assessments. However, this method can be problematic. If local price data is inaccurate, the evaluation may undervalue the property by as much as 50%.!
In practical terms, this means that to get a real estate appraisal worth $400,000, I must buy a property worth $800,000 to be on the right side, whatever the outcome of the appraisal.
This idea itself is completely rejected by the foreign real estate investor who already finds that the amount of $400,000 is not small at all, let alone double it in order to obtain Turkish citizenship!
Of course, the property valuation does not have to be 50% less than its actual price. It could be any lower percentage, but this is the maximum percentage.
Now, before discussing the projects excluded from this law, let’s explore the rationale behind this amendment and why only GEDAŞ has been selected for real estate evaluations.
Why GEDAŞ?
Excessive pricing of new properties has spread in the Turkish real estate market, especially in the past three years, due to high demand and low supply. This trend emerged as Turkey recovered from the effects of the COVID-19 pandemic, with a lack of ready-to-move-in properties and a excess of under-construction properties, often priced higher than similar completed ones in the same area.
This situation led real estate developers to collectively take action by raising the prices of properties under construction thereby forcing buyers to pay elevated hidden commissions, The goal was to maintain substantial profit margins for developers and various stakeholders in real estate marketing, including sales offices and brokerage firms.
GEDAŞ claims to offer a fair and accurate evaluation of properties, helping foreign buyers understand the true value of what they are purchasing compared to the price paid.
This is intended to reduce the excessive profit margins often enjoyed by developers, particularly from foreign investors.
While this concept appears beneficial for foreign buyers, the actual implementation has proven to be quite different.
Why did GEDAŞ not succeed in developing a correct real estate evaluation?
- The properties to be evaluated were compared with old properties in the same area that do not share the same features, and this is considered a clear flaw in finding a correct evaluation.
- The properties to be evaluated were compared with properties found on local buying and selling sites with random prices set for the purpose of marketing and attracting customers and do not reflect the true value of the property offered, but GEDAŞ adopted these properties as a cornerstone and built upon them an unfair real estate evaluation for the sake of properties that deserve a better evaluation.
- The properties of developers participating in the Istanbul Real Estate Investment Exchange (GYO) were excluded from this evaluation and were given an accurate evaluation of more than 95% even for properties under construction in their early stages.
- The routine work system in it, as it belongs to the public sector, makes the issue of real estate evaluation require two weeks of time on average, and this in itself is not suitable for foreign investors who want to obtain the result of the real estate evaluation during the period of their visit, which often does not exceed several days.
What real estate projects are suitable for obtaining Turkish citizenship in 2024?
Generally, real estate projects with accurate evaluations are those offered by developers participating in the Istanbul Real Estate Investment Exchange (GYO). However, to apply for Turkish citizenship, the title deed must also be available. Since the availability of projects and their eligibility for citizenship can change, it’s not feasible to list specific projects here, as conditions may shift by the time you read this.
To assist investors, we offer direct support through our specialized team. Please fill out the form below or reach out via chat or WhatsApp for personalized advice on finding suitable projects that meet both the requirements for a correct real estate evaluation and Turkish citizenship.
