Get loan, buy home

Times of crisis are the best time to invest, according to Güzin Ervardar, who served at TURYAP, a real estate company, as both president of organizational development and a member of the company's board of directors.

"I have been in the real estate business professionally for 15 years. The time following the 1994 and 2004 crises proved the best investments in real estate are made during times of crisis," said Ervardar, who is still within the industry as the general manager of Yuvataş İnşaat, a construction company.

Property as investment
"Quality projects are not discounting their prices. In terms of houses that were previously owned, examples of devaluation are very few and far between," she said. "Some builders who are strapped for cash may lower their prices but that does not mean that one should take those examples and generalize about everyone," she said. "Thinking that the prices will fall even further and waiting because of that is just not logical," said Ervardar. Real estate has proven itself as a good investment in the past, she noted.

"At this point, if people have some savings, they can adjust their lifestyles to invest in residential property with financing of up to 10 to 15 years," she said. "If you are living in a rental unit, how long are you going to carry the burden of rent?" she asked rhetorically, to highlight why it was better to buy than rent. "You can pay rent till kingdom come! But if you take out a real estate investment loan, in five, 10 or 15 years those loan payments will come to an end. Someday the payments will end and you will be living in your own home," she said. "That is why I always recommend buying rather than renting. Instead of paying rent for the rest of your life, you should just take the burden of loan payments and eventually own your own home," she said. "Everyone, including people who do not have savings, can just get into debt and pay it off in the long run," Ervardar said. "Loan payments will end but rents never do."

Prices hold up
Construction firms have not been increasing prices lately regardless of how much costs rise, according to Ervardar. "As construction companies we look at the market conditions and say, 'Wait a minute, let's just stay at this price.' In the last couple of years cost have been catching up to profits. They are very much head-to-head these days," Ervardar said. "In a little while, the markets will reach a new equilibrium where costs will be reflected in the prices."

People who waited to exchange their currency and have profited from the high exchange rates are on the market now as real estate buyers, according to Ervardar. These currency speculators are now directing their interest at property that was once out of their reach, she said. Whereas they were looking at investing in a property valued at YTL 200,000, now because they have made money in the markets, they are setting their sights on something more expensive, maybe something worth YTL 300,000, she said.

Exchange rates
With the rise of interest rates, three months' interest on YTL 100,000 will earn roughly YTL 5,000, according to Ervardar. "When the new equilibrium is reached in the real estate markets, returns of that kind will not be YTL 5,000.

People who invested in the money markets and did not invest in real estate are not going to be able to buy real estate once the new equilibrium is reached," she said. "People who invest in real estate will have invested in a steady and profitable investment vehicle. This is definitely what will happen after the crisis."