“Revolutionizing real estate”: Türkiye presents master plan to solve the housing crisis

Minister of Treasury and Finance Mehmet Simsek presented details of a new initiative aimed at increasing the transformation of urban areas and housing supply.

“This will lead to a reduction in the number of apartments and an increase in rental prices,” Simsek said, expressing confidence that the initiative will contribute to financing and increasing the supply of apartments.

Simsek announced that the Capital Markets Council (SPK) is in the final stage of work on the regulations for establishing Project Real Estate Investment Funds (REIF Project).

“The Board’s regulation will pave the way for real estate investment trusts (REIFs) to invest in real estate projects. Thanks to this regulation, the portfolios of these funds will be adjusted and their type will be changed. As housing supply increases, market pressure on housing prices will decrease, making housing more affordable for everyone,” he added.

Emphasizing that before the introduction of the new regulations, real estate investment funds could not invest in these projects or undertake construction activities, Simsek emphasized that the SPK regulations will remove these restrictions.

Simsek pointed out that real estate investment funds can now invest in projects developed by themselves or others.

“Thanks to this, project real estate investment funds will be able to have in their portfolio projects relating to land and real estate in which projects will be implemented. These investment funds, which meet the detailed conditions contained in the regulation, will have the term “project” in their title and title. be called “project real estate investment funds,” Simsek added.

“In this respect, real estate project investment funds will have a different content than existing real estate investment funds, which cannot include projects in their portfolios,” he maintained.

Investors to home owners

Simsek stated that the project to be implemented by SPK introduces a security mechanism that is intended to reduce investors’ risk related to the project, thus ensuring the rights arising from agreements on the division of fund revenues.

“This regulation will also provide investors with the right to exit the fund in the event of changes that may affect investment decisions related to the fund’s operations, thereby preventing investor complaints,” Simsek said.

Simsek explained that investors can generate income by selling or renting the property after the project is completed, or they can choose to exit in-kind and become homeowners.

“Currently, there are 184 real estate investment funds whose prospectuses have been approved by the SPK. Although there are currently 149 funds with established portfolios, the total portfolio size of these funds is approximately 82.7 billion yen. Thanks to the new regulation, the number of these funds will increase. It is also expected that thanks to a solid structure based on securing funds, the production of real estate projects will be able to be safely implemented. In such an environment of trust, investors will be able to become home owners, using their small savings based on the logic of cooperation,” added the minister. .

Downward trend in prices

Simsek also drew attention to the expected increase in the tendency to save in society due to regulation.

“The regulation will be an important instrument for financing the transformation of cities and increasing the supply of housing. These investment funds will increase the supply dynamics in the housing market, both through the projects they implement and through the housing units they can obtain from other projects, potentially leading to a downward price trend. This recovery will spread throughout the housing market,” Simsek said.

“The regulation will also create a valuable alternative for housing manufacturers to access the financing they need from capital markets. Thanks to this, savers will be able to spend their small savings on real estate projects,” added the minister.

Price increases for apartments and rent will “fall”

“We are introducing regulations regarding the creation of Project Real Estate Investment Funds. This will contribute to financing the transformation of cities and increasing the supply of housing. As a result, increases in apartment prices and rents will decrease, making apartments available to everyone,” Simsek concluded.

Source: Newsroom