Buying a New Property in Turkey

Many people prefer to buy and own new houses and other property. There are a number of reasons:

  • They will be the first owner of the property. No-one will have used the kitchen or bathroom before. Strangely, this is the most common reason why I am told that people like to buy new property! It is probably the worst reason. It is also probably not true. Your builders will almost certainly have been making their tea and eating their lunch in your kitchen, and their bottoms will have sat upon your toilet seat.
  • Repairs costs should be very low for the first few years. In fact, the property will come with a guarantee against any major defectsfor the first five or 20 years (depending on the nature of the defect).
  • Running costs and, in particular, energy bills will be much lower than in an old property. This is because of ever-improving building standards and, in particular, increasing levels of insulation. This is especially true in Turkey, where older properties were often very poorly and cheaply built.
  • New properties are better equipped than properties built a few years ago. Many will now come, as standard, with fitted air conditioning. Kitchens and bathrooms are of a far higher calibre than they were five years ago.
  • The property will be built using the latest designs. Of course, in ten years, tastes will have changed and your house will look as old-fashioned as the one built ten years ago does to you today!
  • Depending on when you agree to buy the property, you may be in time to get design changes incorporated into the property. For example, you may be able to choose the style of your kitchen or bathroom, to have a bedroom converted into a study, or even to combine two rooms into one.
  • Depending upon how early you agreed to buy, you may get the best plot: the one with the largest garden, the best views, the easiest access to the communal pools etc.
  • Depending upon when you buy, you may benefit from buying at (say) 2018 prices but take delivery of a property in (say) 2020, by which time it could have risen significantly in price.

The potential problems of buying a new house in Turkey

There are three main problem areas when buying a new house:

Every new house has teething troubles

As it dries out, plaster will shrink a little, and small cracks will appear. You may get drips from taps or pipes. There will be bits of painting that have been missed. And so on. These are not a disaster but they do need to be fixed.

This process is called ‘snagging’ and you need to make sure that your contract sets out a clear procedure for dealing with these problems.

It will usually be the responsibility of the builder or developer to fix them (see below) and, in Turkey, they will generally be fixed quite quickly but it can be a problem if you’re buying a new house for use as a vacation home.

This is because you will not be living there and so it may take time for you even to identify that the problems have occurred. It may then take time for you to liaise with the builder and then for you to arrange to get them fixed.

This shouldn’t necessarily put you off buying a new property, but it is a factor to consider.

In practical terms, the most important thing is to make sure that the property is thoroughly inspected before you take delivery of it and pay over the balance of your money. This might be done by you personally, or you might have it done by a surveyor. In most cases, it’s done by the owner in person in order to reduce cost but, unless you have special skills and knowledge, a professional is more likely to spot any problems.

When it comes to inspecting the property, do take a bit of time. I am always surprised by just how slow and detailed a proper inspection is.

Bad developers and builders

Your biggest nightmare is if the developer or builder is a rogue or goes bust.

Fortunately, we do not have many rogue developers or builders in Turkey; but we do have some who go bust.

This causes you a problem because it is the developer or builder who issues the guarantee that your property will not suffer from any serious defects: anything substantial for the first five years, and anything very serious for the first 20 years (see below). This guarantee is not backed up by the government or any other organisation so, if the developer goes bust, the guarantee can become valueless.

Luckily, most people will take out insurance against this risk. It is fairly low cost, typically about €500 for the full ten-year period, but this is rising quite quickly.

The second problem if the developer or builder goes bust is that it is they who are responsible for sorting out all the little problems referred to above. These are not big enough to be caught by the guarantee.

Happily, these smaller problems tend to come to light quite quickly and so – with a bit of luck – the developer or builder will still be around to deal with them! If you’re concerned about this, insurance is again available to guard against this risk. A typical policy on a three-bedroom home might cost €150.

Note that neither of these risks will be included as standard in your homeowner’s insurance.

Falling prices

The moment you turn the key in your door, the price of your house will fall in value. This is just like a car. It will usually happen even if the general property market is rising in value.

This is because of people’s liking for brand new property. They’re prepared to pay a premium for buying it.

This is such a significant factor that some wealthy investors will buy investment property and then keep it, empty and un-let, until they see an opportunity to sell it on at a profit. This way it will still benefit from the ‘new property’ premium.

This fall in value may come as a surprise to you as many people assume that all property rises in value. Of course, after the initial fall, the property will rise or fall in value in the same way as the rest of the property market.

You can guard against this risk to a certain extent, but you can’t eliminate it.

It is worth quantifying the potential loss. Check out how much properties more-or-less identical to yours but which are, say, 12 months old are selling for in your area and compare that price with what you are going to be paying for your new property. You can often do this online.

Until about two years ago, you could approach the developer and strike a hard bargain on price, so making a big dent in the loss. With the improving property market, there is now much less opportunity to do this. Nonetheless, it’s worth having a go to see whether there is any possible movement on the price.

Guarantees on property in Turkey

These are sometimes called warranties.

By law, the developer of a new property is responsible for fixing any ‘major’ defects that occur within the first 20 years from the date when the property is delivered to its first buyer.

‘Major’ is defined by Turkish law. Basically, it means any structural defects. In other words, if the house begins to subside (sink) or it develops major structural cracks (rather than tiny little cracks from the plaster drying out) or if the roof is defective, the developer will be legally obliged to fix it. This guarantee will apply both to the main structure of the house and to any ancillary buildings such as garages or swimming pools. It will not apply to things such as garden walls.

The developer will also be responsible for fixing any ‘serious’ defects during the first five years after the property was first delivered. These, more minor, defects are defects that are less of a problem than major defects but still more than you would expect from routine wear and tear.

Minor defects do not include things caused by routine wear and tear, by soiling or by damage outside the builder’s control. So, for example, if the outside paintwork of your house becomes grey and discoloured this will not be covered. If the central heating stops working because you allowed the oil pump to run dry, this will not be covered.So, for example, if the central heating plant or the air conditioning plant breaks down within five years, the builder will have to fix it. If the exterior paintwork develops serious problems – rather than just needing a bit of touching up – the builder will have to fix it.

These guarantees are transferable when you sell the house.

There are no guarantees if you buy a resale property unless it was built less than ten years ago. In that case, it will benefit from the residue of the developer’s guarantees, if any. However, this benefit must be specifically transferred to the buyer when they buy the property. This is easy. Your lawyer will deal with it.

The guarantees are from the developer. This may not be the same as the company that actually built the house; though, if work by a sub-contracting builder was defective, the developer should have rights against the builder and you would inherit those rights if the developer went bust.

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