Property values have kept us all in dinner party conversations for many years now – how much you bought for, how much you sold for, how much something might be worth in five years time if you put in a new kitchen and bathroom.
The question that concerns us Didim dwellers as we enter the 2010 summer season is, how well have Didim property prices fared over the last few months, and what is going to happen as we count down to 2011. Some reports seem to reflect that the town is on its knees and you cannot give the properties away. I wanted to try and make a fairer evaluation based on my own observations over the last 12 months.
Before we attempt to answer, I want to take a very basic look at what helps to govern property prices in the first place. And I want to focus on the two main property ‘types’ that affect the majority of readers of Voices – new builds and resales. Many of you would have purchased new builds, some now may want to sell them as a resale.
It is probably the resale market that we understand better, however in the UK our resales do not compete on the same level with new builds as they do here in Didim. The UK market is mature. The Didim market is barely out of nappies.
For a new build project, the price of a single unit would be worked out in the same way as any other product manufactured in a factory – cost of raw materials (land, construction costs) taking into account cost of sales (commissions, marketing) plus profit margin. Any business-minded professional developer will work out the unit price of a potential project. If this comes out at a reasonable level then the project is probably worth pursuing.
Once that property becomes a resale property, the new owner would usually at least want to recoup what he paid for it, and preferably make a little more into the bargain.
The nineties and noughties in the UK made property experts of us all. It started with Thatcher enabling council house dwellers to buy their own property. The banks then jumped in on the bandwagon by making mortgages more easily and widely available. The explosion of property shows on the TV told us how we can clear £10,000, £20,000, £50,000… become property millionaires just by giving a place a lick of paint and a new front gate.
It was the extortionate property prices in the UK which made Turkey seem so attractive at the turn of the 21sy century. A 2-bed brand new apartment could be bought for anything between £10-20,000 – credit card amounts as some even joked at the time.
As the demand from foreign purchasers grew, so did the desire for better quality ‘products’ – complexes with pools, European standard installations, better quality bathroom and kitchen fittings. Local builders learnt fast. Land prices rose steeply. Property prices reflected the growing demand, but were still comparably much lower than competing markets (ie Spain). In fact, in many overseas property publications, Turkey was being touted as the new Spain, where property prices had climbed steadily over the last couple of decades.
Then a couple of things happened – a world recession, and, more specifically to Didim, the unraveling of several fraudulent activities involving discrepancies with deeds transfers and a significant number of understandably irate and vocal property non-owners.
While the recession, has had a definite impact on the property market worldwide, it could be fair to say that the effect on Didim is not massive, and definitely not irreparable, if only because the domestic market has grown in strength. Throughout the winter months, there has been a steady stream of Turkish purchasers visiting the area, bringing with them a demand for property that has enabled prices to remain relatively stabilized.
The fall out from the tapu fraud issues continues to be a source of concern for both those affected and for many businesses in Didim who have long term interests in the area. If we were to take a more positive stance on these issues, they have heightened awareness of the loopholes in the system for the future generation of buyers. And there is an active body of people pushing towards closing up those loopholes to create, hopefully, a more fraud proof system in the future.
So where does all this leave us with regards to current price levels?
As a unscientific snapshot, I did a quick tot up of the resale properties on our own books – both still available and sold, all British owner.
The total sale price of all the properties actually gave an increase in value across the board of nearly £300,000 over what they were originally bought for. Of those that had been sold (about 35%), the average purchase price was at least 10% more than the original price.
What is also important to bear in mind is that many of those properties were purchased by Turkish buyers who, though tough negotiators, still purchased at a price acceptable to the UK sellers.
The most difficult prospective purchasers over the last 12 months, and who normally left our offices empty handed, were UK buyers who came over believing they could pick up some rock solid bargains.
We are a long way from properties flying off the shelves – I wish. Every week is a struggle but we soldier on and there is definite movement of goods out on the market place, and prices seem to be holding up. Back in the UK my neighbours have had their house on the market for three years without a sniff of a buyer. One resale apartment we had on our books here took just a couple of months to sell.
We work on the premise that every property has a buyer whatever the current economic circumstances. We just need to stand firm, work hard, and have a little faith.