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Turkey Property: Mortgages Still Available

Posted on 13 March 2009

Yesterday Forbes ran a story on how Turkey was more resilient to the credit crunch, because of reforms made to its banking sector years ago.

Turkey’s banking system collapsed in 2001, when “toxic assets, sloppy management and bad credits caused 24 banks to “go south”, the article explained. The reforms that the credit crunch is now forcing other countries to make were made in Turkey shortly after the collapse, and thus Turkey’s banking system, and therefore its economy stand robust against the credit crunch.

The story in itself carries weight because it is written by Asli Aydintasbas, who was born and raised in Turkey and has first-hand experience of how the country was rebuilt after the banking system collapse.

On top of that the story quotes many sources including a banker who said:

“What Americans are experiencing now is not very different from what we had back then. Even the exit strategy looks the same,” one banker told me. Having seen their key financial institutions collapse in 2001 has made Turkish banks today more risk-averse than many in the Western world. The sector remains transparent and closely supervised. Its debt is manageable; reserves are high.”

And NYU professor and Forbes columnist Nouriel Roubini who is called Dr Doom for having predicted economic crisis 2 years ago, who said:

“I don’t expect a full-fledged crisis in Turkey, but it’s going to be a rough year. … I don’t expect a real financial crisis in Turkey like the one they experienced in 2001–the banks are in much better shape, much better regulation of the financial system, the fiscal position is sounder.”

All in all, it is safe to say that the mortgage lending situation in Turkey is unlikely to have changed much, and while Turkey will never have been the easiest country to get a mortgage in, this has left it in better shape now. Mortgages are not as seemingly impossible to obtain in Turkey as they are elsewhere.

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