Keith’s Weekly Property News August 29-2021
The market remains very competitive, with Turkish buyers starting to make their presence felt after returning from summer holidays. I am starting to see the same investor-types I used to see in Cihangir 10 years ago. They usually camp out at one of the real estate offices and closely follow what is going on. They move lightning fast when they see a deal and often skip the deposit process and go right to the Registry the next day.
Furthermore, as the neighborhoods that we target become cooler and more gentrified, wealthy Turks can be seen picking up weekender properties and they often buy multiple units with their friends. They often buy without much concern for appreciation or yield, rather opting for something that they really like. They often will not even negotiate when they find the right one.
Borrowing rates are still prohibitively high so it is the average Mehmet who gets the squeeze with rising rents. Those buyers are very keen on units on the lower end of the range.
For the above reasons, we try to close quickly once we have identified good leads. I will often be putting down smallish deposits to try to hold the properties til we can get valuations done and lawyers on board. That is the only way to level the playing field with the above Turkish buyers. We use a full array of tactics when negotiating. Sometimes one of the clients in the country goes in and acts as a pessimistic buyer and makes a low offer, then we present a more reasonable offer very soon with a real buyer. Sometimes I negotiate, sometimes Selin or Eren. We look at it on a case by case basis.
Nonetheless, we generally do not get much penetration on negotiations, which I have often highlighted. I am very confident that out targeted neighborhoods will see price increases of 15-25 % in the next 12-18 months and 3% yearly after that for the foreseeable future. Many of our properties should outperform that. I have recently revised that number upwards from my ultra-conservative mantra of 3-5% for the next 3-5 years.
We are also ramping up however and wherever we can. More staff will be coming, we will basically go anywhere in the city where we sense value. We still have our core 5-6 neighborhoods, but we felt it prudent to be more capacious in our view and loosen the chains a bit. I have brought in another guy for that. He seems to know just about everywhere and has a real nose for deals, so I am expecting some major production from him. Does not come cheap, but…
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