Turkey still promising business volume for property developers
ISTANBUL - Anatolia News Agency | 5/18/2011 12:00:00 AM |
The improvement of the middle segment of the housing business in Turkey is discussed during a real estate summit in Istanbul. The country’s real estate stock is expected to double by 2020 from a total of $239 billion. Noting the growth potential of Istanbul, an expert from MIT highlights the balance between growth and sustainability
The middle segment of the housing business in Turkey is still in a phase of development while the luxury houses and residence market is reflecting rather stable growth, according to a recent report discussed during the REState summit held in Istanbul.
The real estate stock in the country is expected to increase to a volume of $582 billion by 2020 from last year’s $239 billion, said the “Real Estate Sector in the Developing Countries and Turkey” report announced by Can Fuat Gürlesel, director and founding partner of the Economy and Strategy Consultancy Services, a local advisor, on Monday.
Along the middle segment residences market, the housing financing system is also developing, the report said.
The luxury houses and residence market across the country and office building in Istanbul are also posting steady growth, it said.
Highlighting the importance of Istanbul, for the market thanks to its big population, Brian Anthony Ciochetti, head and academic director of the real estate department of the Massachusetts Institute of Technology, or MIT, said that the city has a higher growth potential than leading international markets in Japan and France.
Still, the academic raised some concerns of the rapid expansion of the city.
Commenting on the recently announced Istanbul Canal project, a plan to connect the Marmara Sea and the Black Sea via a manmade canal, Ciochetti said, “These kinds of issues are often put on the agenda all over the world.”
This issue is mainly related to the equilibrium between growth and sustainability, he said. “There is more need for housing, building, transportation opportunities and commerce, but on the other hand we should be much more attentive to the sustainability,”
Turkish Prime Minister Recep Tayyip Erdoğan made the project public last month, calling it mainly a safety plan to secure Istanbul Strait from the dangers of oil-carrying tankers.
Still, it is important how much the natural habitat will be affected due to the project, saidr Ciochetti. “It is easy to get into action. But if you face a negative result, it is very hard to turn back. It is important to take cautious steps,” he added.
[HH] $1,000 houses for low-income earners
The real estate capital has taken a global format, according to Ciochetti. “The sector is searching for markets across the world to invest in, but risk and return should always be taken into consideration.”
The United Nations pointed out the world population may reach 15 billion by 2050 and more than half of the world’s population lives in city centers, Ciochetti said, adding that this figure is expected to increase to 60 percent in 2030.
The number of cities home for more than 10 million people is 26, according to him.
There is a great need for new houses for low-income groups, according to Ciochetti. Speaking about his $1,000 house project that he announced before, Ciochetti said, “The first prototype of these houses is built in the sub-provincial city of Chengdu in southwestern China. But it totaled $3,000 instead of $1,000. Using better materials during the construction of the house was the reason for this increase in the price and we also built the house larger than we planned. There is a family living in the first prototype,” he said.