Many people who are interested in real estate investing usually ask the same questions about the quality of the investment, the expected returns on it and the duration of the return of the capital, but few of them ask questions about the best destination for real estate investment, and because the comparison of investment destinations is not easy, we will discuss in our article how to compare the most important investment destinations in The world . We will compare it to the favorite destination of most real estate investors in the world, Turkey.
In this article, we will compare the real estate investment in the Middle East capital Dubai and the capital of Turkey Istanbul.
What should you know about the real estate market in Dubai?
The real estate market in Dubai has suffered a series of ups and downs in recent years. Although the overall market is generally flat, house prices have fallen by 17% between 2014 and 2016 and are likely to fall further in 2018 despite a slight rise In December 2017. At the moment, experts are divided into between the belief that the market is very variable on one hand, predicting it is static on the other.
In general, this may be a good time to buy against rent in Dubai, as property prices are low and will eventually rise as the UAE Dirham is closely linked to the current strong US dollar.
Turkish real estate market
Economic growth is a great advantage for those who want to invest in Turkey or Istanbul in particular. This city has one of the most attractive investment markets in the world. The development of the real estate finance system, massive housing complexes, modern design methods, and technology development has created a new understanding of the real estate market in Turkey.
After tracking the events of recent years in the region and the situation of the Republic of Turkey, we can only conclude that the real estate market in Turkey is a promising market and has strong immunity against the crisis, real estate prices in Istanbul is still high in most areas of the city, The Turkish governments projects , such as Istanbul Canal, the third airport and other projects will make Istanbul the largest investment opportunity in the world, despite the political problems experienced by the Middle East and the military coup that passed through the Republic of Turkey, but the Turkish market proved to be a stable market and resistant to shocks .
The importance of the strategic location
Istanbul is a world-class center, apart from the city’s great history. The strategic location of Istanbul makes it a trade hub across the world. It is the only city in the world that is located on two continents (Asia and Europe) and is located just a few hours away from the world’s largest capitals, Istanbul III airport , which will be the largest airport in the world in terms of passenger capacity will make the capital of the Ottomans the largest tourist destinations, commercial and investment of the century. This makes Istanbul’s strategic location a favorite in comparison of Dubai’s strategic location, which is also an important economic center for the Middle East and a unique tourist destination.
Can foreigners buy real estate in Dubai and Istanbul?
Yes sure. In Dubai, due to the legal changes made in 2002, foreigners can buy, sell and rent real estate in Dubai without any regulations or special permission. The same applies to Turkey. After the repeal of the reciprocity law, foreigners have the right to own property in Turkey, but there is a huge difference in the type of ownership Between the two countries.
In Turkey, you can own your house entirely. This is called freehold ownership, where the property becomes yours after you buy it. The children can inherit the property simply without any legal complications. This is contrary to the limited ownership in Dubai and some of the major cities of the UAE. Limited, often between 49 and 99 years, making inheritance of property difficult or impossible.
Property prices in Dubai are much higher than in Istanbul?
In Dubai real estate prices in some parts of this big city are very high. In the table below, we will compare the price of owning a two-room apartment and a lounge between Dubai and Istanbul. The most appropriate market Property ownership is Istanbul because its prices are very competitive compared to other real estate markets.
| Dubai | Area | Price |
|---|---|---|
| 2+1 | Dubai Marina | 667.000 USD |
| 2+1 | Al-Barsha | 816.000 USD |
| 2+1 | Al-Garhoud | 950.000 USD |
| Istanbul | Area | Prices |
|---|---|---|
| 2+1 | Bahcesehir | 150.000 USD |
| 2+1 | Maslak | 400.000 USD |
| 2+1 | Zekeriyakoy | 500.000 USD |
Real estate prices change according to the change in supply and demand, and the large demand in the real estate sector in Turkey makes the market prices in a constant rise and the return on investment is very satisfactory to investors, and must bear in mind that the demand for real estate in Turkey far exceeds supply and this is because of the increasing demand of Turks on real estate and facilities provided by the government to the owners in Turkey.
The return on investment in Istanbul is higher than in Dubai
We can say that the return on real estate investment in Dubai has become very low in recent years due to the economic fluctuations in the UAE markets, but investment in hotel property is the best option in Dubai can have good return on investment. Istanbul, one of the fastest growing cities in the world, as explained above due to high demand from the local population, which guarantees the investor a guaranteed and high return on investment.
Laws of Ownership and Ownership Fees
The most important strengths of the property laws in Turkey are that they guarantee the rights of foreigners to the extent that they guarantee the rights of Turkish citizens. After repealing the reciprocity law, Turkey has strengthened real estate investment sector and provide a safe environment for foreign investors to raise the confidence index in the Turkish real estate market, Turkey has reduced the ownership fees to become very suitable for low-income earners.
The table below shows the fees you will encounter when buying real estate in the UAE compared to Turkey.
| TYPE OF EXPENSES | FEES | Example of buying an apartment 1 + 1 70 meters in Dubai at a price of 400 thousand dollars |
|---|---|---|
| Property transfer fees in Dubai | 4% in addition to 540 AED | 16140 USD |
| register fees | 455 dollars for the property whose price is less than 136000 dollars or 1000 dollars for the property, which exceeds the price of 136 thousand dollars | 1000 USD |
| Mortgage registration fees | 0.25% of the loan + 10 dirhams | |
| Other fees for mortgage processing | Up to 1% of the loan amount | |
| Real estate agency fees | 2% of the purchase fee | 8000 USD |
| Tuition transfer fees | $1600 - $2700 | 1600 USD |
| Average Total Costs * Approximate | 26740 USD |
Ownership fees in the Republic of Turkey:
| Type of Costs | The amount | Example of buying a 1 + 1 apartment of 70 sq meters in Turkey at a price of $ 200 thousand |
|---|---|---|
| Translation and ratification of the owner's passport of the Turkish language | 100 USD | $ 100 |
| Fees for obtaining title of property (Tapu) in the name of the new owner | 90 USD | $ 90 |
| Property tax in the Republic of Turkey | 3.9% of the total value of the property. | $ 7800 |
| "English - Turkish" translator fee and registered with the Translators' Association of Turkey | 100 USD | $ 100 |
| Fees for applying for transfer of ownership of the property | 200 USD | $ 200 |
| Annual Municipality Fees | 0.03% of the value of the property. | $ 60 |
| Annual mandatory real estate insurance (DASK) against earthquakes and natural disasters | 2 USD per square meter | $ 140 |
| Average Total Costs * Approximate | $ 8490 |
The Exit Plan
Do not just think about purchasing the property and the ease of ownership steps in your preferred destination, you should also think about the exit plan, the exit plan, the sale of the property.
Selling real estate in Istanbul is very easy. Due to the increasing demand for real estate (second sales category), it is very easy to sell your property. The real estate sites in Turkey can help you with this without high costs. While selling the property in Dubai, you will need some of the necessary expenses to complete the sale.
This table shows the fees to be paid during the sale of the property in Dubai,
| Fees | The cost |
|---|---|
| NOC and supervisor fees | Between $ 300 and $ 1,300 |
| Mortgage Cancellation Fees | 1% of the remaining amount or $ 2500. |
| Transport charges (if applicable) | $ 1600 - $ 2500 |
| Home Loan Closing Fees (if applicable) | $ 700 |
The strength of the Turkish real estate market is due to the latter’s reliance on internal demand for real estate. Turkish property ownership exceeds 93%. Local demand for real estate in Turkey is very high, unlike Dubai’s real estate market.
Conclusion …
Real estate experts in the region say that real estate investment in the Turkish market provides more guarantees and better value than investment in the UAE real estate market due to the stability and balance of the Turkish market and the growth witnessed by the Turkish real estate sector (due to the high demand for supply) We are confident that the smartest investment in the real estate market will result in full knowledge of the market and its details. This is what makes Extra Property team work every day to provide the right and reliable information to all customers.
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