There are many questions that revolve in the investor's head before he accepts any step in which he sacrifices his capital, and there are many options for employing this capital in the investment process, and among these options is a discussion of investment opportunities in several countries from all economic and administrative aspects until that The choice is based on the most appropriate investment opportunity, and for this reason we will discuss one of these investment opportunities and address the differences in real estate investment between Turkey and Georgia.
The differences in real estate investment between Turkey and Georgia in economic terms
There is no doubt that the economic motive is the strongest motive behind any investment process, and the return on investment remains the only concern that worries the investor to ensure his capital. Therefore, he seeks to study the economic feasibility of any investment project before taking any step in the project. As for real estate investment in Turkey, it is located Under the influence of several factors in order to achieve the desired profits from the investment, including real estate prices.
Real estate prices between Turkey and Georgia and their impact on real estate investment:
Perhaps real estate prices are one of the most important factors affecting the success of real estate investment and reaching its goal
If we want to compare real estate prices in Turkey and real estate prices in Georgia, we will find that studies indicate the similarity of the price per square meter of real estate in both countries with some minor differences from one city to another, but the differences in real estate prices are very clear in the diversity of options in Turkey Especially in Istanbul in terms of the enormity of housing projects and the diversity of real estate investment fields in them and in terms of the aesthetic characteristic of the urban style in Istanbul:
In Turkey: The average price per square meter of real estate is estimated at 800 USD.
In Georgia: The average price per square meter of real estate is estimated at 950 dollars.
personal income:
Income is a source of purchasing power, which determines the ability to save and then invest, and studies indicate that there are differences in average income between Turkey and Georgia.
In Turkey: the average per capita income is about 400 US dollars.
In Georgia, the average per capita income is approximately $200.
These differences indicate that the expected real estate investment movement is more active in Turkey than in Georgia.
Inflation and exchange rate fluctuations
It has become known the impact of global crises, which casts a shadow on the economies of countries and the activity of the investment process in them, and the change in the exchange rate of the currency is considered an indicator of stagnation or inflation.
In Turkey: The Turkish lira has recently been suffering from inflation, despite the Turkish government’s continuous intervention to reduce inflation, as the inflation rate reached 10% annually.
In Georgia: The inflation rate in Georgia has reached only 1.8%, so you will find that the lari exchange rate is relatively fixed.
Geographical area
The area of Turkish land is not compared to the area of Georgia, but what is the relationship of the geographical area with the differences in real estate investment between Turkey and Georgia?
Extension of the geographical area necessarily means the spread of real estate in those areas, and thus increasing the volume of real estate investment and the diversity of investment opportunities and real estate projects for investors in the country. From this point of view, Turkey opens a wider horizon than Georgia for real estate investments:
Turkey: The area of Turkish land is 780,000 square kilometers.
Georgia: Georgia covers an area of 69.000 km².
local production
The GDP is an important economic indicator of the profitability of the trade balance and the growth of the economies of countries, and you will be surprised by the results of the studies concerned with the subject:
In Turkey: The average Turkish GDP amounted to 745 billion US dollars, with a growth rate of 3% of the total output.
In Georgia: The average GDP in Georgia amounted to 42 billion US dollars and a growth rate of 5% of the total output.
Rental Yield
We mentioned that the return on investment is the main driver of the investment process. As much as the profits achieved by real estate investment, the capital is attracted to this type of investment. Otherwise, what is the benefit of risking the capital employed in the investment process?
In Turkey: The return on annual profits achieved by real estate investment is approximately 5%.
In Georgia: While the return on real estate investment in Georgia was approximately 3.5%.
Differences in real estate investment between Turkey and Georgia in terms of administrative and legal terms
Among the matters that affect the investment decision are the regulations and laws issued in the concerned country that regulate the investment process in terms of features and facilities, as well as in terms of conditions and procedures. The most important of these aspects are:
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The subject of residence
Obtaining residency and foreign citizenship has become a target at the present time for investors and non-investors, so the Turkish government dealt with this aspect wisely, linking obtaining Turkish residency to real estate investment to encourage foreigners to invest in real estate in Turkey and revive the Turkish economy, as it guaranteed the investor in the real estate sector to obtain a residence permit for two years Renewable, while in Georgia, the government did not take this step in terms of granting residencies to foreigners. On the contrary, it prevented the holders of residency from entering the country and the investor is always expecting to leave.
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Nationality topic
In Turkey, the law allows investors to obtain Turkish citizenship when they purchase a property worth $250,000, within a maximum period of three months, provided that the property is not sold during this period.
In Georgia, there is no law in Georgia that authorizes the investor to obtain citizenship through real estate investment, but all that is required is for the investor to obtain a residency once buying a property worth 100,000 US dollars, and this residency can be renewed every year for a period of ten years in order to obtain Georgian citizenship.
Own the property
In Turkey, the Turkish real estate law allows the investor in the real estate sector to obtain a property title deed once the full amount is delivered to the construction company or to the owner in the case of cash purchase, and there is another type of title deed called an easement title if the owner purchased the property in installments while it is still under construction, once the sale or purchase contract is signed between the two parties, the contract can be officially ratified by a notary, which makes the real estate investor feel safe and reduces the risk factor that accompanies the investment process.
Whereas in Georgia, the investor cannot obtain the title deed until after the project is completed in full, with the contract signed between the two parties not being officially ratified by a notary even after the end of the project, but this contract is considered a symbolic document only.
Advantages of real estate investment in Turkey
If investment does not have competitive advantages, why invest! Let's get acquainted with some of the advantages of real estate investment in Turkey:
- The investment attraction element. Approximately 15 billion US dollars are pumped annually into investment in Turkey.
- One of the reasons for this investment attraction is the stimulating legislative and legal environment that guarantees the rights of the investors and gives them encouraging advantages such as residence and citizenship.
- What we mean about nature and the charming atmosphere is that it makes Turkey a lively destination for investment.
- Real estate investment, in general, is considered one of the secured investments with the least risk or adventure rate that encounters other types of investment.
- Globally, real estate investment is witnessing remarkable growth and development, let alone if all the incentives in Turkey support this growth in this type of investment.
- The Turkish government has established an Investment Support Agency backed by a 12-language website to address investors from all over the world and attract them to invest.
- In general, there are no restrictions on those coming to real estate investment in Turkey. On the contrary, the Turkish government grants many facilities and stimulating measures such as tax exemption and reductions in customs duties, leading to exemption from them.
- The Turkish government has provided investors with the opportunity to open branch offices for international investment companies, whether these companies are real estate or otherwise, provided that they are linked to the main company.
We hope that we have clarified the differences in real estate investment between Turkey and Georgia, so that the investor in the real estate sector is aware of the upcoming investment environment and the expected returns.
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