Turkish Investors Take Note

According to international property solicitor, John Howell, on March 14th, the Turkish Supreme Court overturned part of Article 19 of the New Land Registry (TAPU) Act, a Turkish law that was amended in 2003, to allow foreigners to buy property in Turkish villages. The 2003 law also allowed foreign companies to own property along with more than 30 hectares of land in Turkey.

However the Supreme Court has now overturned Article 19, and in three months time the amendments made to the law in 2003 will no longer exist.

John Howell comments: "Thousands of foreigners, many of them British, have bought property in Turkey over the last year or two. Most of them have bought in purpose-built coastal developments and so are unlikely to be affected too much by this law. Some, however, have bought inland and some have bought large amounts of land for development purposes. Those people and any others who are concerned about their position should seek urgent legal advice."

According to the president of the World Travel and Tourist Council (WTTC) Jean-Claude Baumgarten, Portugal now accounts for 0.7% of the world's tourist market, yet this figure is set to rise by a further 45% by 2015.

Consequently Baumgarten has called for greater investment to be ploughed in to the country, to improve infrastructure and transportation, which in turn may help property prices to further rise.

Foreigners applied to buy $269 million worth of New Zealand property in the first two months of this year, well down on the $1.3 billion worth of applications made in the same months last year.

Overseas Investment Commission chief executive Steve Dawe said it was not that foreigners were showing less interest. "It just tells me that in the first two months of last year, we had one large transaction which involved a forestry sale."

US housing market experts remain divided on the likelihood of a price crash.

Property prices in the States rose last year by 8.3%, the fastest pace in a decade, to a median level of $184,100, government figures show.

But in some big metropolitan areas including Washington and San Francisco, prices are up about 20% and million-dollar homes are becoming increasingly common.

The National Association of Realtors found 23% of homes sold last year were bought by investors, and there are widespread reports of buyers 'flipping' homes for quick short-term gains in many markets.

David Berson, the chief economist for mortgage finance group Fannie Mae, notes that the level of investor ownership of housing hasn't been this high since the late 1980s, which led to a crash in housing prices.

"Many analysts think that a high investor share in the Northeast and California helped exacerbate the housing downturn that happened during the 1990-1991 recession," he wrote in a recent commentary, adding that "the risk of regional home price declines is higher" as so many purchases are by speculators rather than residents.

South African buying patterns may be changing

Absa research released this week shows the price gap between newly built houses and existing houses is narrowing, and could change the buying patterns of potential home owners and investors.

Economist Jacques du Toit says the price of erecting a new house was 12.8% higher than buying an existing house in the fourth quarter of last year.

While this may seem high, it is the lowest differential since the 13.1% recorded in the fourth quarter of 1989 and far lower than the record high of 31.4% reached in the first quarter in 2003.

Gerhard Kotz, chief executive of estate agency Era SA, says: "Such declines in the differential generally occur when consumers, resisting high building costs, decide to buy pre-owned rather than newly built homes and cause prices in the pre-owned sector to rise as demand exceeds supply."

At the peak of the property boom in the early 1980s, the price differential between old and new homes dropped to almost zero.