(MENAFN- Arab Times) Real estate experts split on the impact of the currency's woes on sector
KUWAIT CITY, Aug 12: Investors in Turkey are looking forward to the return of foreign exchange markets Monday following the dramatic decline of the Turkish lira last Friday, reports Al-Anba daily.
The Kuwaiti investments in Turkey are about $2 billion. More than 60 percent of these investments are owned by 300 Kuwaiti companies whose investments are estimated to be about $1.6 billion, while the remaining $400 million — a variety of investments – are owned by Kuwaiti individuals.
The real estate sector accounts for 70 percent of the total Kuwaiti investments at the level of companies and individuals in Turkey worth about $1.4 billion.
The real estate experts speaking on the impact of Kuwaiti investments in the real estate sector in Turkey as a result of that crisis say they split between those who see it as an opportunity to invest due to the decline of the exchange rate of the Turkish lira, while the others say there need is a need to wait because it goes beyond normal events and indicators, which can be likened to economic war.
General Manager of Amar City Company Samir Al-Kaddoumi said the current time is not suitable for buying or selling the Turkish property, since no one can predict the position of the lira in the next few days, especially when the global financial markets take the floor Monday morning.
He added what is happening now is 'economic war' with unexpected results and therefore it is preferable for the investor to remain cautious until the stability of the exchange rate of the lira.
However, Kaddoumi bet on the stability of the economic situation in Turkey, evidenced by the high rates of tourism in the past few years, and the number of Gulf tourists doubled because they found this country clean Islamic tourism, and Gulf citizens in large numbers have bought in recent years large swathes of real estate in various Turkish cities.
Deputy General Manager of Infiniti Real Estate Ahmed Al-Shammari has a different opinion. He considers the current opportunity very suitable for real estate ownership in Turkey.
He said investors wishing to buy should take advantage of this opportunity. He pointed out the lira is currently at its lowest level and will not fall further after hitting rock bottom.
He pointed out investors in the past were reluctance to own real estate in Turkey because of what was published in the local newspapers about fraud operations in real estate.
This news reports had a negative psychology effect on investors, but solving this problem is very simple through direct ownership in the Turkish market through reliable companies and projects, especially that the property ownership document is issued very quickly in the Turkish market.
He added, Turkey in recent years has seen huge investments in real estate at international level because of the confidence of investors in this market, which is growing rapidly, and the laws and guarantees provided by the Turkish government to investors have encouraged the investors to own real estate in a safe and stable environment.
The Kuwaiti and Gulf tourists in general have been the biggest beneficiaries of the decline of the Turkish lira against the rest of the currencies. Those who visited Turkey in the first quarter of this year and until April saw that one dinar was equivalent to 12.5 Turkish liras the exchange rate fell dramatically to 15 lira in May and June this year. On this basis, the Turkish lira lost nearly half its value against the dinar since the beginning of this year.
On the other hand, the rate of inflation in Turkey reached 16 percent, that is the prices of goods and services obtained by the Kuwaiti tourist in Turkish lira increased by only 16 percent against an increase in the value of the dinar against the lira by at least 50 percent, which means that a Kuwaiti tourist receives services and goods at a discount nearly one-third as compared to its value at the end of last year.
In light of the sharp declines that hit the Turkish lira and the effect on the Turkish economic conditions on the Kuwaiti oil exports to the Turkish market, an oil source said the refineries of the Turkish company Tabras, which consumes Kuwaiti oil, are committed to paying on time with no delays seen during the past two years.
Kuwait supplies two million barrels of crude oil to Turkey every month.
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