Luciano Capaldo Chairman RICS Europe

Giacomo Morri ERES President

Güniz Çelen Çelen Valuation

Andreas Schiller Editor, SPH Newsletter

Master Studies in Propertyat University of Sarajevo SEBS

JULY AUGUST 2012 / YEAR:1, VOLUME: 6

Editor-in-chiefHalil KARLI

General DirectorM. Melih AKYURT

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News TeamHalime BAYERMelis Gizem KONUKHazal ÖZGÜL

Guest EditorYener COŞKUN

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Advisor LecturersProf. Dr. Cengiz Erolcengiz.erol@ieu.edu.trDoç. Dr. C. Coşkun Küçüközmencoskun.kucukozmen@ieu.edu.trDoç. Dr. Hasan Fehmi Baklacıhasan.baklaci@ieu.edu.trYrd. Doç. Emin Akçaoğluemin.akcaoglu@ieu.edu.tr

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The Turkish real estate market has shown noticeable developments in recent years due to various reasons. According to sta-tistics, Turkey is considered to be a prom-ising country in the greater European region. If it is managed effectively, the country offers several economic benefits to its trade partners and investors. Like other immature sectors, the real estate market also offers opportunities. In this context, there are positive foundations on which to build, in demographics and ur-

EDITOR

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banisation. Istanbul, as an emerging mega-city, offers several advantag-es for investors/developers. Additionally, there are public policies on infrastructure investments, land development and social housing. There is an atmosphere of dynamic and creative entrepreneurship. Other fac-tors favouring strong demand are the advantages of Real Estate Invest-ment Trusts (REITs), the advantages of being a late comer, developments in regulatory framework and developing academic knowledge. These factors would all be classified as opportunities (or positive factors) sup-porting the potential of the Turkish economy and real estate business.*

So, we decided to have real estate sector as our main topic for this edition. I would like to thank you all who have a contribution on this special issue; especially Dr. Luciano Capaldo, Prof. Giacomo Morri, Andreas Schiller, Güniz Çelen, Prof. Dr. Muharem Karamujic, Lejla Ha-lidovic, Laura Lindberg, Prof. Dr. Cengiz Erol, M. Melih Akyurt and Burcu Tanrıöver.

Dr Ing Luciano Capaldo, FRICS, Chairman RICS Europe, talked about RICS Turkey and also Ecobuild which is an important topic at all over the world. Giacomo Morri, Professor at SDA Bocconi and president of Eu-ropean Real Estate Society (ERES), answered our questions about Turk-ish real estate markets, ERES and its contributions on real estate sector and students. In his article, Andreas Schiller, editor-in-chief of the online medium SPH Newsletter, focused on an old, but always new connec-tion between real estate sector and finance. And, Mrs. Guniz Çelen, CRE, MAI, FRICS, Chairperson, Çelen Corporate Property Valuation and Counseling, analysed valuation profession in Turkey. Moreover, she is talking about her company which is the first appriasal company in Turkey.

Meanwhile, Yener Coşkun, MRICS, senior specialist at Capital Markets Board of Turkey, and M. Melih Akyurt, student of Izmir University of Economics, share their articles about housing finance and mortgage markets in Turkey.

Last but not least, you may also find interesting to read Master studies in Property program of University of Sarajevo School of Economics and Business Sarajevo (SEBS), in cooperation with University in Melbourne, Australia. SEBS is the only educational institution in Bosnia-Herzegovina that has been a member of The Association to Advance Collegiate School of Business – AACSB. And this program is the first in the Balkan region in academic year 2012/13.

I hope you will find what you are looking for in real estate sector in this special volume. For further information and feedback, you may just send me an e-mail (ycoskun@spk.gov.tr)

Yener Coşkun, MRICS

*Coşkun, Yener. (2011). The Establishment of the Real Estate Regula-tion and Supervision Agency of Turkey (RERSAT). Housing Finance In-ternational 25 (4): 42-51 (available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1874648)

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Dr Ing Luciano Capaldo, FRICS, Chairman RICS Europe, answered the question that are prepared by the students of Izmir University of Eco-nomics.

Andreas Schiller editor-in-chief of the online medium SPH Newsletter shared his article about an old, but always new connection between real estate sector and finance.

M. Melih Akyurt focused on housing finance and mortgage markets in Turkey this month.

The article which is written by Yener Coşkun, MRICS, “A Brief Analysis of Turkish Housing Markets”, is giving information about Turkish housing market.

Güniz Çelen, CRE, MAI, FRICS, Chairperson, Çelen Corporate Property Valuation and Counseling, analysed valuation profession in Turkey in her article.

Giacomo Morri, Professor at SDA Bocconi and president of European Real Estate Society (ERES), respond-ed questions about Turkey, ERES and, its contributions on real estate sector and students.

The information about Master studies in Property program of University of Sarajevo School of Economics and Business Sarajevo (SEBS), in cooperation with University in Melbourne, Australia is detailed.

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Dr. Ing Luciano Capaldo, FRICS,

Chairman RICS Europe

Dr. Ing. Luciano Capaldo FRICS is Chair-man of the Royal Institution of Chartered Surveyors in Europe. He is member of the American Institute of Architects, Licensed Engineer with the Italian Professional Order and Fellow of The Royal Society of Arts.

External Lecture for Italian University and International Professional Associations, Ca-paldo is the author of published work on the subject of Real Estate Valuation and As-set Management as well as guest speaker in various roundtables and TV debates on real estate issues.

With many years of experience in the areas of Real Estate Valuation and Project-Property Management, he has worked for internati-onal investors on valuation, development, design and rehabilitation of property assets in Italy, UK, Spain, Ireland, Russia, Canada and UAE, as well as on asset protected by UNESCO.

Court-appointed expert on high-profile ar-bitration cases within the Italian property sector, he is acting as Independent Techni-cal Consultant and International Arbitrator and Strategic Advisor to international Asset Management companies.

Architect and Project Manager on several projects for major fashions houses in Russia, Italy, Ireland, Spain, Japan and Korea, he divides his professional life between his Lon-don and Milan offices.

He is also actively involved in the RICS Disaster Management Commission and is a Build Action volunteer, ensuring that vul-nerable communities hit by disaster receive effective professional support in order to improve their chances of social and econo-mic recovery.

INTERVIEW

QUESTIONS

- Turkey is in the earthquake zone and lots of buildings are weak for even 6.0 severity earthquake, but audit firms and municipality gave permission for strengths of this buil-dings. How can we overcome ethical problems?

- Turkey is a country with significant exposu-re to earthquakes. However, according to estimations, less than 25 percent of Turkish construction complies with earthquake buil-ding standards, drastically increasing eart-hquake vulnerability, especially in big cities.

In Turkey, local governments are responsib-le for the enforcement of building standards and project supervision. However, being seriously understaffed, they often informally transfer this duty to professional organi-sations, like the Chamber of Engineers or Chamber of Architects, so those who actu-ally control the construction are not legally responsible for enforcement of standards and regulations. Local governments are not even able to keep registers of contractors in their jurisdictions. The law does not clearly

define the necessary qualifications of tho-se who should check the design complian-ce to building standards. Additionally, site engineers are responsible for ensuring that construction complies with building codes and standards, while at the same time they usually receive their salary from contractor – meaning that the prospects are illusory that site engineer will exercise vigorous control on the person who remunerates his salary.

Therefore it can be said that ethical prob-lems that sometimes arise in relation to construction are a result of wider, systematic issues, such as improper building standards, poor definition of responsibilities and the lack of local governments’ capacity. This brings into focus the need for greater pro-fessionalization of construction industry and built environment professionals together with building the capacity of local governments, and a need for national government to work on the development of construction and pro-perty standards together with local govern-ments, professional organisations and cons-truction industry, in order to increase their implementation.

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- As it is well-known, RICS is one of the lead supporters at Ecobuild. Also, RICS really puts emphasize on ‘green value’ and ‘creating an energy-efficient property sector’. Do you think that the world is re-ally aware of the importance of the-se points? Which countries engage themselves in these topics at requi-red levels? And what do you think about Turkey’s attitude and stan-ding on these topics?

- RICS is convinced of the importance of applying sustainable development princip-les to the built environment. Sustainability is a critical business issue in companies today - there is mounting legislation affecting the property sector such as cap & trade, the possibility of an introduction of carbon ta-xes, etc. Moreover, the sustainability of an asset is increasingly coming under scrutiny by world investors as part their own overall Corporate Social Responsibility strategy. Occupiers and clients are increasingly de-manding sustainable practices in property from the design stage to disposal. The push towards sustainable property is based not only on ethical requirements but also the significant savings in cost, energy and emis-sions. In the 27 countries of the European Union, measures to promote energy efficiency in buildings are a core priority despite the eco-nomic crisis. Turkey has also taken strong initial steps in the areas of energy legisla-tion and now has focused on tapping the significant potential for energy efficiency in

buildings (for example introducing energy certificates and promoting eco buildings). RICS of course welcomes these measures and encourages property professionals, po-licy makers and consumers to invest further in these green initiatives.As part of its commitment to protect the pub-lic interest, RICS has its own sustainability action plan, which demonstrates how it is engaging with the environmental global agenda and working towards a fairer, more sustainable world.

Initiatives range from green business stra-tegy to responsible engagement with emp-loyees, and from promoting fair access to the profession to action on the ground in international development. For example initi-atives over the past year include:

• influencing international organi-sations, EU Institutions and governments to ensure that policy sets the right conditions to transform the property market as intended • benchmarking RICS’ carbon footp-rint, including displaying CO2 emissions in real time • disaster risk reduction and interna-tional development projects in Africa • an EU funded project to produce training materials for energy efficiency mea-sures in homes across Europe • research underpinning the business case for sustainability in commercial buil-dings

- How can Turkish Professionals can join RICS and attend your training programs?

- RICS welcomes new members from di-verse backgrounds and has developed a number of Routes to membership to enable individuals - from school-leavers with RICS accredited degrees through to professionals with years’ of relevant experience in land, property and construction - to gain full RICS membership. The correct route to RICS mem-bership to suit our candidates will depend upon the professional’s academic and pro-fessional qualifications and relevant expe-rience. So whether you are straight out of University with an RICS accredited qualifica-tion or already have years’ of experience in the property profession and a first degree– RICS will be able to offer you a qualifying path to membership!.First of all, candidates need to send their CV to RICS Europe and then RICS informs each candidate which route to membership they are eligible for, or if they are not, what they need to do to be eligible.

Potential members then join RICS as a Tra-inee and complete their APC (Assessment of Professional Competence) training on the online platform MyAPC. Depending upon their professional experience this will take between a few months (Senior Professional and Adaptation route) to 1-2 years (Gradu-ate routes).

Finally, this process is completed by the Fi-nal Assessment which is a one-hour intervi-ew of the candidate with two-three asses-sors (specially trained RICS members).

RICS Turkey is still in the development sta-ges and for the first time it held final assess-ment interviews in the winter of 2010. To date there are 46 qualified members, 18 students and 16 trainees in Turkey. The next final assessment interviews will take place in September.

- What makes RICS members diffe-rent from other professionals?

- Behaving ethically is what distinguishes professionals from others in the marketpla-ce. Having a clear set of professional and

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ethical standards to guide behavior gives all those we deal with confidence in the way we do things.

RICS membership brings confidence to the market. Today RICS has more than 100 000 qualified members worldwide - over 5 000 work in continental Europe- maintaining and increasing trust in the real estate profession. Despite the volatile times, globalisation of the property market continues apace, with inter-regional volumes more than doubling year-on-year. So it is little wonder that go-vernments and regulators, clients and cus-tomers will continue all calling for proven performance and high professional stan-dards. They all see the difference between services provided by an RICS qualified pro-perty professional and those delivered by a non-qualified one. The difference is not only high quality of services and expertise but also it is a question of integrity. People want the best possible service, advice and support from someone they can trust, some-one with an ethical professional behaviour.

Employers and firms working in the property sector are also recognising the added value that RICS members bring to the market. It is not a coincidence that every year a survey on European Property Remuneration trends, published by MacDonald & company, out-lines the advantages to become a charte-red surveyor in Europe. This year, despite of the crisis, findings shows that a member of RICS earned on average 15% more than a professional without this qualification, and this gap is even wider in countries such as Germany, the Netherlands or Belgium. This clearly shows that employers rewards integ-rity, professionalism and trust.

With regards to firms, it is important to high-light that in less than a year; around 225 firms from 23 countries in continental Euro-pe have signed off to adhere to RICS stan-dards, showing their commitment to follow a strict code of conduct and benefit from the recognised RICS’ brand – the mark of pro-perty professionalism worldwide. Also more and more key European financial institutions

recommend the use of the RICS Red Book as a reference for valuers and users.

The number of property professionals willing to join RICS and applying the global stan-dards of the organisation to their business practices has not ceased to grow. As an example, since RICS launched in September 2011 its new Valuer Registration Scheme in continental Europe with the aim to ensure the quality of valuations, raise the credibility of valuers and provide clients with a clearly identifiable marker for the best-regulated and qualified professionals in the field, over 13 500 European registered valuers have joined the scheme.

Another milestone for the organisation in its mission to increase transparency and clients’ confidence in Europe’s real estate markets has been the launch of the RICS Real Es-tate Agency and Brokerage Standards (RE-ABS) in October 2011. Since then, more than 50 multinational and national firms in the continent have adhered to the new RICS global set of standards on how bro-kers and estate agents should operate their business. Among those firms in Turkey we can highlight: Celen Corporate Valuation & Counselling Co, Besiktas; EVA Real Estate Appraisal Consultancy Company, Istanbul; Kalme Corporate Real Estate Appraisal and Counseling Inc., Besevler-Çankaya/Ankara and TSKB Gayrimenkul Degerleme A.S., Is-tanbul.

- Which ongoing opportunities for professional development does RICS offer its members?

First of all, RICS members are part of an international network of highly trained and competent property Professionals and this obviously helps you a lot in your professi-onal life.

Also, as surveys show every year, they have much increased career and earning potenti-al than their non-qualified colleagues, which means that employers rewards the professio-nalism, integrity, ethics of our members.

They also benefit from continuous learning and knowledge sharing opportunities as part of the RICS international network. RICS members can update and enhance their

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skills, knowledge and competence throug-hout their working life through RICS’ Conti-nuous Professional development.

All qualified members and event students, can have free access to many services ava-ilable for “members-only” on our website, including:

•influential property related journals •informative articles on market trends and developments•Websites and electronic documents•Legal precedents, documents and case law sources•Key text books for study and continuing professional development / lifelong lear-ning•A document delivery service •An enquiry service •help on surveying work and practice •knowledge alert email: every student can register for this email alert that is sent every 2 weeks with top news in the property bu-siness •Discounted prices for a selection of RICS publications and big property fairs.•Free access to job ads in the whole of Europe •Free access to the RICS Red Book in seve-ral languages.

•They also receive help and technical infor-mation from the RICS library •They have the opportunity to attend semi-nars and events

And finally, they can always count on the support of their national association and RICS Europe whenever they need any help or advice.

For more details, please visit www.ricseurope.eu

About RICS

RICS is the world’s leading qualifi-cation when it comes to professional stan-dards in land, property and construction.

In a world where more and more people, governments, banks and commercial orga-nisations demand greater certainty of pro-fessional standards and ethics, attai-ning RICS status is the recognised mark of property professionalism.Over 100 000 property professionals working in the major established and emer-ging economies of the world have already

recognised the importance of securing RICS status by becoming members.

RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been com-mitted to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.

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REAL ESTATE AND FINANCEan old, but always new connection

Real estate is in fact as old as the history of human civilization. It started with – what today we would call – the market segment housing, especially for owner-occupied housing, and later on so-called publicand commercial properties were added: Public buildings, representative and religious pla-ces, infrastructure constructions, offices and retail came along. And as soon as the finan-cing industry started and grew, theconnecti-on between the real estate and the finance world was given. For centuries this happe-ned in a pretty simple structure: Money was lent for something necessary and promising. The profit for the banks was clear: There was a return in form of interest rates or other benefits.

During many centuries good and bad ex-periences were made, but more or less this easy-going model worked till the end of last century. But starting in the 80s of the last century we saw a diversification in both the real estate and the finance industry. The real estate industry began to define its segments – like housing, offices, retail, logistics and more – and to diversify its investment vehic-les. In Germany, for example, to the well-known two traditional instruments “open real estate funds” and “closed-end real esta-

te funds” as well as to direct investments, the latter mainly from companies, family offices or high net worth individuals,which domina-ted the market for centuries, new construc-tions were added step by step: We have gotten real estate companies listed on a stock exchange, later on we learned about Real Estate Investment Trusts (REITs), speci-ally from the US, and finally we saw the me-anwhile well-established vehicle of “special funds” for a limited number of institutional in-vestors, or sometimes even a range of such vehicles in one real estate company. And, let me add, that some other developments which have started at the beginning of the 90s, are very important: The academic education for the real estate industry was established, specialised media entered the market and the mass media became aware of property topics, and organisations, con-ferences as well as fairs were formed. To sum it up in one sentence: The real estate industry became more and more organised and public.

Diversification also appeared in the finance sector: The biggest change was establis-hing investment banking, in Western Europe right from the start as an international cross-border business. It did not take long that the term “real estate investment banking” came along, and with that so called “as-set backed securities” (ABS) and “mortgage backed securities” (MBS) in the context of the new financial model of securitization. Not only internationally operating private banks like Commerzbank, Deutsche Bank, and Dresdner Bank were keen of it, and ad-ded securitization and investment banking to their classical loan business. As well it were the land banks of our federal states (“Landesbanken”) and the mortgage banks (“Hypothekenbanken”) – both in former ti-mes operating pretty noiseless and within a local reach – who became bigger and bigger, and more and more international.

All this could have continued for ages, if there would not have been the crisis. It is unnecessary to sum it up one more time, what happened beginning in the U.S. and

ending up with a large world-wide dilem-ma. Let me only tell one good joke I heard in that time: “How does the balance sheet of an American investment bank look like? – No idea? – It is easy! On the left nothing is right, and on the right nothing is left.” Well, some people did read the book “Limits to Growth”, published by the Club of Rome even in 1972, and already at the beginning of the 21st century some experts pointed outthe danger of only financial constructions – with no real money in it. However, very few bankers and politicians listened, espe-cially some Brits were laughing about the “German Angst”, but meanwhile we know the results. In Germany only, for example, “Hypo Real Estate HRE” came under state control, and “Eurohypo”, once formed out of a local mortgage bank and the mortgage departments of Deutsche Bank and Dresd-ner Bank and once an international active financing bank with a very good reputation, meanwhile is to be sharply reduced and restructured. Probably parts of it will show up under a new brand.

But these are just two examples; of course the result of the crisis includes much more. To put a long and complicated story short: The growth of both, the real estate industry and the appetite of the financing world towards real estate (as well as vice versa) caused a fatal situation, in which some real estate companies went bankrupt, or had to be purchased resp.to go into a merger, and some banks even stopped new lending or to very different conditions than before. In parallel, state control as well as new and more specified control instruments by the Eu-ropean Union were developed or are close before introduction (like Basel III, Solvency II, and the new Alternative Investment Fund Management AIFM directive). Too, the-re was a strong impact on the “open real estate funds” – operating international, but headquartered in Germany. Due to the fact, that end investors could put their money in and out by every day, many institutional in-vestors used those vehicles for parking ca-pital – a parking place with nice yields. But when during and after the crisis such money

Andreas SCHILLEREditor-in-chief of the online medium “SPH Newsletter

was taken out in enormous sums, some of those former large investment vehicles got smaller in terms of underlying capitalisation, and due to a lack of liquidity, had to be closed by law. To put it a bit cynical: Ger-many showed the innovation how to chan-ge an open real estate fund into a closed one. Meanwhile several of such funds have disappeared, and in this spring “SEB Immo-Invest” as well as “CS Euroreal” currently are the ones to go into liquidation.

Although the crisis hit investing as well as fi-nancing companies hard the results of it can-not be reduced to just those two segments of the chain of supply in the real estate in-dustry. It hit the whole chain, starting with architects and developers, and ending up with asset, facility and property managers. Add the tenants, and their problems, then you get the whole picture of the dilemma. Important as well is the impact on internati-onal business.

Up to 2008/09 both, real estate industry and financing institutions, acted more and more international. Not only in Europe, but somehow globally. No country was too far away for not being invested there. Japan, Latin America, Singapore, Australia – why not? After the shrinking process in funding, of course, reduced capital and capacities combined with unclear future outlooks led to mainly reduced activities of developers and investors, or even to purchases, which in some cases could even be called fire-sales.What lessons have been learned from the crisis? In general, one can say, that the in-dustry realized that the term “real estate” includes the word “real”. Most of the pla-yers became – voluntarily or not – realis-tic. (And, of course, they became “green”. Or, for putting it into another way, they are conscious about sustainability. This term, ori-ginally from forestry, corresponds not only with what was said in “Limits of Growth” by the Club of Rome, but – understood in a more complex way – deals with ecologic as well as economic aspects. Albeit it is an old and simple truth that economics should be sustainable as well.) Becoming more realis-tic means for example to give a company a clear profile, to develop a manageable stra-tegy, to invest not only in the so called “hot spots”, but in so called B- and C-locations

as well, and – although it sounds contradic-torily – either to diversify or to specialize. Some examples explain what is meant: An investment and development company – re-equipped with a new management – follo-wing the motto “reduce to the maximum” decided for a more simple investment stra-tegy sheet with countries on the horizontal, and market segments on the vertical side – both with a limited number. Instead of being “here and there” and “in this and that” like before, now everybody can see and unders-tand with a quick check where what is hot and what is not. Others decided to reduce or even to quit totally international activities and to act only or primarily in their home co-untry. Here they know the markets, the pla-yers, and the way the business goes. More and more smaller cities gained momentum for developers and investors, because being not that volatile markets like the big agglo-merations, they may look a bit boring, but at least like save heavens. The same is with market segments: In Germany housing has seen a strong renaissance – and the reason for this is the same: Perhaps a bit boring, but at least (hopefully) a save heaven. Too, beside office and retail, investments in stu-dent apartments, parking garages and ot-her so-called alternative investments shows growth. But maybe the most important fact is that not only the real estate industry, but the financing institutions also became awa-re of the importance of such questions, or in other words: No longer only analysis of quantity, but analysis of quality counts as well. Albeit this sounds good, one has to be aware, that meanwhile sometime it looks as if although everybody learned the lessons, for some in the industrymany lessons start to be forgotten again.

But the most important fact is another impact of the crisis. Investors in general, either indi-vidual or institutional, are no longer keen of finance products only. “Material assets” is the slogan. And looking towards the list of material assets real estate simply is on top or at least among the tops (beside gold e.g.). This result from the crisis definitely is a good one for the real estate industry, and another good one is that regarding financing both the real estate as well as the financing in-dustry became more attentive and more cre-ative. This sounds a bit like another contra-

diction, but in fact it is not. Attentiveness for example is definitely given to securitization, because this instrument is not a bad one in general, but it depends on the size and the underlying assets. Creativity, which does no longer mean foolish calculations by excel sheets, can be found with the introduction of new real estate debt products like funds for the institutional market. This role, so far occupied by banks and some private equity companies, is currently taken over by traditi-onal real estate companies.

Finally: Was does that mean for Turkey? Compared with Western European countri-es Turkey is in the lucky position that levera-ge effects in financing real estate were and are not that common. Given this, of cour-se Turkey was hit by the crisis as well, but mostly by external impacts and not so much by home-made problems. The very traditio-nal approach of Turkish banks towards the real estate market – for what reasons ever – has not propelled Turkey into the league of the big international players, but on the other hand missing activities in former times-helped to avoid a lot of problems in the near future. Too, the fact that only a limited number of international players became se-riously active in Turkey nowadays is a plus.

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About Andreas Schiller

Andreas Schiller is Editor-in-chief of the on-line medium “SPH Newsletter”, and a regu-lar contributor to German daily “Frankfurter Allgemeine Zeitung”, to Austrian daily “Der Standard”, and to “Schweizer Immobilienb-rief” (Swiss real estate letter), among others. His main focus is on real estate and invest-ment topics in Central and Eastern Europe, South East Europe, Russia and CIS (Com-monwealth of Independent States) as well as Turkey. Too, he is Owner and CEO of the two companies “Andreas Schiller Invest-ment Insight” (ASII) and “Schiller Publishing House” (SPH).

ASII is for all activities, which are beyond writing, like conferences, panels, and other events, moderations, business tours about real estate development and investment to-pics and so on. SPH publishes monthly “SPH Newsletter”, and books are about “Real Es-tate Asset Management” as well as “The Int-roduction of REITs in Europe”.

After his master degree he wrote as a free-lance journalist mainly about real estate as well as urban and regional development to-pics from Germany and Western Europe, before in 1996 he joined the editorial staff of German real estate magazine “Immobili-en Manager“, which he managed as Editor-in-chief from 1997 to 2003. From 2003 to 2007 he was the Publisher of “Immobilien Manager”. In 2003 he was awarded with the “Deutscher Preis für Immobilienjournalis-mus” (German Award for Real Estate Jour-nalism), in 2004 he was announced editor-in-chief of the then new yearbook “Europe Real Estate” In 2007 and 2008 he was ap-pointed a member of the jury for the ULI (Ur-ban Land Institute) Awards for Excellence Eu-rope as well as of the jury in the category real estate economics for the „German Jour-nalists Award“.

Andreas Schiller is Member of the Board of Directors at ERES European Real Estate So-ciety and visiting lecturer at Danube Univer-sity Krems (Austria).

Buchmühlenstraße 21 D-51465 Bergisch Gladbach

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Another important fact is that compared to other countries, financing in foreign curren-cies in Turkey was and is not as common as e.g. in Hungary. On the other hand traditio-nal financing can not be the only approach for a prosperous future. Some changes and some adaptations of international structures have to be made. But if this is done step by step, like for example modifying classic debt financing into the direction of a cash-flow-calculation, financing real estate can have a good future for both – the banks as well as the real estate industry. For the latte-rone should be aware of the different market segments like office, retail etc. on the one hand and housing on the other side – with housing being a highly diversified market in terms of segment and geography as well.

Add city transformation and infrastructure topics to that, this would mean not one, but many other articles, papers and/or exchan-ge on conferences.Indeed, real estate and finance is an old, but always new connecti-on, in Turkey as well.

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Giacomo Morri, Professor at SDA Bocconi and president

of European Real Estate Society (ERES)

The European Real Estate Society (ERES) was established in 1994 to crea-te an international real estate network between academics and professionals across Europe. ERES is dedicated to promoting and advancing the real es-tate discipline and specifically property based research throughout Europe. The Society incorporates national rese-arch societies, academic researchers, practitioners and doctoral students en-gaged in real estate. The core activities of ERES include an annual conference, industry seminars and education semi-nars.

QUESTIONS

- For the first time, it has been deci-ded to establish the “ERES Doctorate Student Committee” within the body of ERES.This committee definetely carries big importance for both the ERES and Europe.Could you please inform us on the goals of this com-mittee and its importance for Euro-pe?

- The ERES Doctorate Student Committee was created during the ERES 2010 Confe-rence in Milan in order to create a network of young academics interested in real esta-te. The main purpose is to exchange experi-ences between PhD students and to get the support of more experienced academics, in order to facilitate the development of the next generation of European real estate aca-demics. It is important both for ERES, beca-use it creates a stricter relationship between people involved in real estate research and ERES, and for Europe as a whole, because it enhances the possibility to have better qu-ality European academics and researchers in the future.- ERES has several activies that have

INTERVIEW

regularly been ongoing such as se-minars and workshops.Could you please also explain the goals and strategies of ERES in the field of real estate education?

- ERES was established in 1994 by a group of academics, mainly coming from UK and The Netherlands. The main purpose of the Society is to enhance research and educa-tion in real estate fields. In order to reach this target every year industry seminars are organized linking together universities and practitioners. There are also educational se-minars, aimed at sharing teaching techniqu-es and new methodologies. The most important event is the Annual Con-ference when, during four days of works, over 200 papers are usually presented. In 2012 it will be held in Edinburgh from June the 14th to the 17th. Moreover, in 2008 ERES launched the Jour-nal of European Real Estate Research ( JERER) with the aim of publishing the most relevant European researches.

- Can you briefly describe the contri-butions of ERES to her members?

ERES Members are people attending the An-nual Conference. The main benefit of being part of the Society is to belong to a qualifi-ed network of academics and practitioners interested in property related research and education, where they can exchange ideas and collaborate together on new projects. Members receive also the Journal of Euro-pean Real Estate Research, a peer reviewed scientific journal published by Emerald on a quarterly basis with a focus on European real estate issues.

- How can real estate/ finance mas-ter programs, and doctoral students participate in ERES?

- Students participating in ERES will take ad-vantage of the possibility of meeting with leading academics of the sector. Moreover, special events during the Conference, such as Doctoral Sessions, with PhD papers pre-sented and discussed, and special classes for students, are good opportunities to learn and improve.

- What do you think about the futu-re of Turkish real estate sector and

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what attracts foreign investors for making real estate investments?

- In many countries the real estate sector has been slowly developing only following the industrial and financial sectors evolution. In Italy, for example, a great development in the best practice of the property sector mainly occurred from the end of the nineti-es when many foreign investors entered the market bringing new capital and new pro-fessional practices and techniques. Turkey’s economy is now growing above the Europe-an average and this has been driving fore-ign investment because of the expectations of good returns both for higher rent values, due to an increase in the demand, and for a yield compression, due to a lower risk in the future. So I expect that this trend will be favorable for the development of a professi-onal real estate sector.

- There was an essential increase on real estate prices according to data announced by Royal Notary Associ-ation last year in Belgium. Moreover this says detached houses prices inc-reased 10,7%, meanwhile flats pri-ces increased 8,4 % even there is a crisis in Europe. What caused this si-tuation and do you expect continuity on that trend? What are the implica-tions of crisis that Europe faced with at the moment to real estate market in Italy, and Europe?

- Real estate markets are mainly driven by local factors, so it is not easy to forecast

future trends on a European base. Countries where the economy has been already reco-vering are now facing a new property pri-ce growth, but others, like South European countries which are still facing public debt issues, are not recovering. A positive trend can continue only in those areas where the-re is already an economic expansion; it is very unlikely to have in increase in property prices not related to a good economy or to a credit loosening.

- Can you give us information abo-ut programs related with real estate in SDA Bocconi School of Manage-ment?

- SDA Bocconi offers several executive programs for professionals and a post ex-

perience Master in Real Estate, all taught in Italian. Executive programs are four-day full time courses on specific topics (valuation, financing, asset management, development and marketing) and a six month program du-ring evening time covering all main property related issues. Those courses are intended to provide professionals, already working in the sector, with all the essential tools in-vesting only a limited amount of time. Diffe-rently, the Master in Real Estate is targeted to younger people intended to begin and develop a career in the property sector. The one year full time program provides students with all the most advanced methodologies and knowledge in economics, finance and technical topics related to real estate, thro-ugh 24 different courses and many com-pany presentations and guest speakers.

The objectives of ERES are:

• To encourage research and promote education in real estate and closely allied areas, especially in European Countries.

• To improve communication and exchange information in real estate and allied matters among college/university faculty members and practitioners who are teaching or engaging in research in property, real estate and land use.

• To facilitate the association of academic, practising professional and research persons in the area of real estate and closely allied areas.

• To encourage professionalism in practices related to real estate and closely allied areas as well as other activities promoting the purposes of the foundation.

• To organise events where researchers and educators in the broad area of real estate can interact.

• To organise events where researchers and decision-makers from both academia and practice can exchange their views with res-pect to the research needs in the field of real estate, but also discuss the best ways of using research results to enhance decision-making in the field to promote in any other feasible way the development of real estate research and education in Europe.

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Yener CoşkunMRICS is Senior Specialist,Capital Markets Board of Turkey.

It is believed that home ownership offers both material and non material benefits to the individuals and also society. However this belief may be also related to psycholo-gical/economical issues, economic/financi-al agents enjoy to satisfy the need of better housing. Turkey, having nearly 68% home ownership rate and also very dynamic hou-sing markets, is not an exception.

In this article, the author briefly analyzes the Turkish economy and housing markets. The rest of the study is organized as follows. Section 2 presents overview of the Turkish economy specifically for the last decade. In section 3 and 4, we analyze general struc-ture and the latest developments in Turkish housing markets. The last section is reserved for the concluding remarks.

Overview of Turkish EconomyTurkish economy has experienced seve-ral important financial (banking) crisis after 1980’s. The first big crisis, called banker crisis, occured in the period of 1982-1985. The second crisis was 1994 Crisis and the latest one occured in 2000-2001. The last crisis has changed the way of everything in the country from politics to economy. Weak governments, high inflation/unemployment rates, less developed financial markets were the complementary elements of the above structure. So, it seems that this picture may strengthen the idea of “sick man of Europe”

A Brief Analysis for Turkish Housing Markets

which once refers to late period of Ottoman Turkey. According to crisis figures and new sick men of Europe, Turks feel relatively bet-ter in last decade.

It is to the country’s credit that, as it came out of the 2001 crisis, Turkey succeeded in fixing traditional sources of fragility. Mone-tary policy is now pursued within an inflati-on targeting framework and governed by an independent Central Bank.

Fiscal policy has been generally restrained, and the public debt-to-GDP ratio is stab-le or declining. Banks have strong balan-ce sheets, and regulation and supervision are much tighter than before. The currency is floating. When it comes to macroecono-mic management, Turkey has adopted all the best practices (Rodrik, 2012: 42).However one side of the coin is bright, one may be also note that there is still a long to do list for Turkish economy. For examp-

le, Turkey still addicted to short term capi-tal movements for financing her twin defi-cits. Moreover, higher unemployment rate, inequality of income, less developed finan-cial markets etc. may strongly imply that the-re are still important unsolved problems in the country. But it is also fair to say that Tur-kish economy did a good job in last deca-

de and has made happy to local/internati-onal investors.

Additionally, according to figures, Turkey has faced relatively limited negative im-pacts during the global crisis. But it is im-portant to note that the reason of the limited negative impacts on the Turkish housing sec-tor is related to small and inefficient mortga-ge economy in Turkey rather than a success-ful crisis management or market dynamics (Coşkun, 2011b: 13).

Housing Markets in TurkeyIt is important to emphasize that real esta-te (and hence housing) markets reflect the dynamism of the Turkey’s growth/develop-ment process (Coşkun, 2011c: 3). The Tur-kish real estate market has shown notice-able developments in recent years due to various reasons. Turkish real estate markets offer important opportunities. In this context,

there are positive foundations on which to build, in demographics and urbanisation. Is-tanbul, as an emerging mega-city, offers se-veral advantages for investors/developers. Additionally, there are public policies on inf-rastructure investments, land development and social housing. There is an atmosphe-re of dynamic and creative entrepreneurs-

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hip. Other factors favouring strong demand are the advantages of REITs, the advanta-ges of being a late comer, developments in regulatory framework and developing aca-demic knowledge. These factors would all be classified as opportunities (or positive

However, Turkey faced two key challenges that continue to negatively impact the further development of her mortgage market. First, ac-cording to the latest figures (see, Table 1), the housing loan/GDP ratio is nearly % 5.5 in Turkey. This ratio implies that the official lending market and hence financial intermediation for housing finance are comparatively less developed in Turkey.

Secondly, however it has observed very limited non-public securitization volume in last 8 months, there has been no (open market) securi-tization in secondary mortgage markets since the mid 1990s. This picture clearly indicates that the country’s housing finance structure has not used modern mortgage finance techniques. Overall, it seems that the Turkish economy continues to show resilience in the near future and that the Turkish housing market may still offer benefits to investors/developers. But a lack of efficient primary and secondary mortga-ge markets raises the question as to whether the current picture of the mortgage market is sustainable in the long term (Coşkun, 2011c: 4).

On the other hand, Turkey has a problematic market structure in the context of affordable housing. Mortgage markets tend to less deve-loped and help housing finance of relatively higher income groups (Coşkun, 2011a: 15). Therefore, as seen in the Table 1, outstanding residential mortgage debt and per capita mortgage debt are comparatively lower in Turkey than most of the European housing markets.

factors) supporting the potential of the Tur-kish economy and real estate business. The-se factors can make positive contributions to the expected rate of return on investment in the Turkish the real estate market (Coşkun, 2011d: 42).

Housing and also real estate markets in ge-neral have showed noteworthy performan-ce during the last decade. In this context, one may also objectively argue that hou-sing markets were one of the important ele-ments of succesful economic period occured in last decade.

Table1: Overview of EU Residential Mortgage Markets in 2010

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Table2: Short-Term Initial Fixed Period Rate, from 1 to 5 years maturity (%) Source: Turkish Central Bank.

Source: TurkStat.

For further analysis of the weaknesses of the housing market and housing supply/finance mecha-nisms in Turkey, see, Coşkun (2011a: 14-15).

The Latest Selected Developments in Turkish Housing Markets

However both Turkish economy and housing markets have funde-mental problems, the dynamism of the housing market seems attrac-tive to all market players. We may analyze selected positive points related to Turkish housing markets. Those are declining interest rates, rising house sales and increasing house prices.

First, as seen in the below figure interest rates on TL credits has dramatically decreased in Turkish banking system. But it would be also important to note that interest rates are still higher in Tur-key. For example, interest rates were 10% at the end of the 2010 in Turkey. Although this figure represents historical low for Turkish financial markets, interest rates seem still higher, comparing other countries (see, Chart 1 and Table 2).Secondly, Turkish housing market has also showed positive outlo-

ok from the perspective of house sales (see, Table 3). As seen from the below table, house sales has increased to 419.000 unit at the end of the 2011. However this number is well behind the 2009 figure (531.746), we may argue that Turkish housing markets may go behind the negative impacts of global financial crisis.

Both Reidin Turkey Composite House Sales Price Index and Reidin Turkey Rental House Price Index peaked in March 2008 and continued to fall the first quarter of 2009. After this period, both indexes have showed increases.

In this context, Turkey Composite House Sales Price Index increased to 92.6 in September 2010 from 87.4 in January 2009. At the same time, the Reidin Turkey Rental House Price Index has slightly increased to 91.6 from 89.1 (Reidin, 2010: 3-5).

Source: TurkStat.

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Thirdly, house prices has also started to inc-rease in Turkey after April, 2009. As seen in the above figures (see, Chart 2) (Nomi-nal house prices year-on-year growth rates in selected European countries and also Re-idin index), this should be also noted as im-portant development because it seems that most of the European markets still show weak market characteristics because of the global financial crisis.

Source: European Mortgage Federation (2011: 3) and Reidin (2011: 4)

However Turkish economy is very familiar with financial crisis, country has experien-ced an exceptional period in last decade. Thanks to strong growth dynamics during the period of 2003-2008, housing mar-kets and also real estate markets in gene-ral have showed noteworthy performance. In this context, housing markets were one of the important elements of this succesful eco-nomic period. Turkey is classified as one of the riskiest eco-nomies in the European region based on

the economical/political fundementals. But it would be valuable to note that the country still offer strong benefits in housing markets. It may be observed from the above figures that Turkish housing markets were very dyna-mic in recent years. But, it seems that, long-term success in the market would be related to capacity of solving fundemental problems rather than short-term positive market move-ments. Good news is Turkey has a potential to manage her long-term benefits, if econo-mic stability would manage effectively.REFERENCES

Coşkun, Yener. (2011a). Does re-design of the policies on housing finance and supply help to solve housing question of Turkey. 18 th Annual ERES Conference. 15-18.06.2010. Eindhoven, The Netherlands. Avaiabl at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1641211.

Coşkun, Yener. (2011b). The Global Financial Crisis and the Turkish Housing Market: Is There a Success Story?. Housing Finance Inter-national 25 (3): 6-14.

Coşkun, Yener. (2011c). Housing Markets in Turkey: An Overview. October. European Mortgage Federation (EMF) Mortgage Info: 2-4.Coşkun, Yener. (2011d). The Establishment of the Real Estate Regulation and Supervision Agency of Turkey (RERSAT). Housing Finance International 25 (4): 42-51.

European Mortgage Federation. (2010). EMF Quarterly Review Q1.

European Mortgage Federation. (2011). Annual Report Activities 2011. Available at: www.hypo.org

Rodrik, Dani. (2012). The Turkish Economy after the Global Financial Crisis. Ekonomi-tek 1 (1): 41-61 (available at: http://ekonomitek.org/pdffile/6_dergi_ makale2_dani_rodrik.pdf).

Reidin. (2010). Index Focus. No. 22.Reidin (2011). REIDIN.com Real EstateIndices: March2011 Results. Available at: http://www.reidin.com/

“This article is published in SPH Newsletter 10 (April), 2012 edition. The author thanks to reprint permission.”

About Yener COŞKUN

Yener Coskun is senior specialist at Capital Markets Board of Turkey (CMB), Financial In-termediaries Department. Yener has on-site and off-site supervision experiences mostly for securities firms and did perform/contribute several CMB projects. Some of those projects are currently on the agenda. Selectedly, those regulation and research based projects are related to; investment advisory, portfolio management, repo-reverse repo, risk manage-ment/risk based disclosure/risk based audit in securities firms, performance measurement and presentation, dividend policies in publicly held firms, OTC markets and derivatives trading, demutulization etc.

Coskun’s expertise on property (mortgage, appraisal, real estate finance) is based on the academic researches and government business oriented experiences. Yener spent 10 months at Wharton School, University of Pennsylvania, as a visiting scholar in 2002-2003 and currently PhD Candidate at Ankara University The Graduate School of Natural and Applied Sciences, Real Estate Development Department.

Yener holds MRICS designation since 2010 and various local professional designations re-lated to capital markets and real estate apprasial. He has two published books and several journal articles on capital markets, real estate and housing finance. Yener is consultative member of RICS Sustainability Task Force Europe since 2012/July and also have been acting as the chair for European Real Estate Society (ERES) PhD Student Committee since June 2010. Yener will be visiting lecturer at University of Sarajevo, School of Economics and Business (SEBS) in 2012/September.

Personal Web-Sites

http://ankara.academia.edu/yenercoskunhttp://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=467174http://www.linkedin.com/profile/view?id=66753299&trk=tab_pro W4: http://ideas.repec.org/f/pco541.html

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The first formal introduction of the valuation profession is adjunct with the law for the Real Estate Investment Companies in 1998. The fixed assets of the REICs were to be valued periodically by the two state companies established

THE VALUATION PROFESSION IN TURKEY

by law in 1994. Thus there was no market for any services to be provided in the private sector. There were few companies providing valuation services alongside other services as agency.

The first professional valuation company; Celen Appraisal Center, was established in 1995. The profession was little known of in the business environment and it was much difficult to explain the need and value the service would contribute to the community.

I am drifting back many years as I remem-ber how difficult this endeavour was. Even my family had difficulty in understanding why I was in practice of such a profession whilst I already had such high qualifications in three fields. We came together with 17 people who were involved in valuation and established the Appraisers Association of Turkey in April 2001. The association was accepted to TE-GoVA The European Valuers’ Organization and IVSC International Valuation Standards

Committee as an associate member. Turkey is still represented in both organizations by The Appraisers’ Association of Turkey.

The Capital Markets Board of Turkey has passed two communiqués regarding the re-gulations for licensing valuers and qualif-ying valuation companies within the same year, in August 2001. This event has been the turning point of professional valuation practice in Turkey. The communiqués stipu-lated simple standards, qualifications for the valuer and status of valuation companies who were to take place on the CMB’s list.

The most important stipulation was the clear separation of the valuation profession from agency services. Agency and commission based fees are strictly forbidden for valuers.

20% of the valuation companies were to be-long to senior valuers who carried responsi-bilities of the company and it became com-pulsory to employ five licensed appraisers in the company. The paid capital requirement was 75,000 TL and this has been escalated to 300,000 TL until today. The main chan-ge in the regulations has been made in Au-gust 2007 where 51% of the company sha-res were required to belong to responsible senior appraisers. Afterwards an amend-ment was made to the communiqué stating that banks and state institutions were exempt from this status which meant that the state and banks could enter the competition with independent valuation companies. This was a blow to the profession which had star-ted in a very healthy way, appreciated very much by international organizations. The Appraisers’ Association of Turkey has made an appeal to cancel this amendment and has gone to court with the statement that this will lead to unfair competition.

The Mortgage law has passed in February 2007. The need for residential valuers be-came apparent and thus the CMB has ta-ken provisions to exercise the exams for the licensing of residential valuers. The Mortga-ge law also stipulates the Appraisers Union

Güniz Çelen, CRE, MAI, FRICS

Chairperson Çelen Corporate Property Valuation and Counseling

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to be established. The union, which will be responsible for education, licensing, stan-dards and disciplinary act, is expected to be established very soon. All licensed app-raisers will become members of the Union. IAS, International Accounting Standards have been accepted and the Turkish acco-unting standards have been adapted to IAS. IFRS, International Financial Reporting Stan-dards have become mandatory since 2005 and IVS, International Valuation Standards have been adapted since May 2006. The valuation profession has come a long way in terms of a structural basis. The situation for the companies is also chan-ging. There are two state companies and a valuation company which belongs to a bank and overall more than one hundred valuation companies. This of course, does not represent the condition for free market competition where other types of relations-hips are put into the picture. There is word that five companies are having economic difficulty and four of them are closing. There are basicly four types of valuati-on companies in the market. The first type works only for banks where the structure and procedures are designed only to va-lue residential units for banks for collateral purpose. The second type includes compa-nies which only work for banks, but value commercial property as well. The third type works for banks and the market for different purposes. The fourth type is those which do not work for banks but only value commerci-al property for other purposes than collate-ral purpose. The latter exercises consultancy services as well. Consultancy is a product of valuation practise and requires years of senior professionalism. Valuation compani-es provide services for many purposes: As mentioned above; for securitisation, finan-cial reporting, transaction. Appraisers are also expected to serve for counseling pur-poses.

As of today, there are one hundred valua-tion companies which have been qualified to take place in the list of the Capital Mar-kets Board, at present total number of valu-ation companies with appraisal license is 119. As of October 2011, there are 1766

appraisers who hold appraiser license and 632 people have full filled the preliminary criteria to obtain the license. while 40% of the licenses appraisers are civil engineer, geomatics engineer and urban planner, re-maining 60% come from economy, mana-gement, public administration and other fi-elds. The interest in the profession is still very active and it is not surprising to expect the numbers increase in the recent future, as the market is developing, the career op-portunities and earning potential are signifi-cantly increasing.

The contribution of the valuers to carry the appraisal profession in high level is substan-tially high. As the board members election of Appraisers’ Union is approaching, appra-isers are very keen to take a role in the uni-on to provide credibility and influence with the sector players at national and internatio-nal level. I believe that appraisal profession in Turkey is very promising since the requi-red regulations are in place, and the players are qualified, and the need for independent appriasal reports in the market is evident.

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HOUSING FINANCE AND MORTGAGEIn Turkey

Turkey is an emerging market and the real estate sector has an essantial role on her development process. That’s why, espeaci-ally starting from the big cities, goverments attach importance to urban transformation. Moreover there are also lots of people who are not home owners. So, they are potential

customers for buying a house. Additionally, there is significant exposure to earthquakes for Turkey. According to L. Capaldo, cha-ir of Royal Institute of Chartered Surveyors (RICS), only less then 25 percent of Turkish construction complies with earthquake buil-ding standarts. (Sfinance, 2012, volume 6). There by, an increase in the sector is potten-tially expected. In addition to these, foreign investors invest to residential and some other projects in Istanbul. Also, a recent law pro-vides more options to foreigners for having real estate in Turkey.

Housing finance has an essantial role on devoloping real estate sector, and the eco-nomy in Turkey. Moreover, starting from se-cond half of the 20th century housing de-mand has increased in big cities because of migration, urbanization, and increase in population (TOSUN, 2006). It seems that real estate projects are well designed and companies are good enough for carrying out these in Turkey. However, finance sector does not support to housing sector and ho-using finance, thus mortgage finance is not well devoloped in Turkey and securitization vechile is not effective

M. Melih AKYURT

Izmir University of EconomicsInternational Trade and FinanceRisk Management and Insurance Certi-ficate, 3rd year student

There are various housing finance systems. In some of the devoloped countries like in the U.S., Japan, Canada, and Australia the system is managed by private institutions, but in some other devoloped counries like in the Netherland, and some Scandinavian co-untries governments have an essantial role on housing finance for only poor, older or disable people (TOSUN, 2006). Moreover, the legal structer In Turkey is mixed with the-se two concepts and covers both American and European models. If there is needed to deal with housing finance systems, we can see that there are several different types of financial systems that can be applied; such as direct financing, agreement system, de-posit financing, and mortgage bank system (see Graph 1). Mortgage bank system is used commonly in the context of American and European model. In Turkey mixed type model which consists of American model and European model is used. Before discus-sing mortgage bank bussines, I will explain the other types of systems in brief.

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Direct Financing

Direct financing is a very basic system and the finance of the projects is provided by the idividuals or firms without brokerage houses. People who want to buy a house directly pay its value by using equity and/or. Moreover, direct financing is generally used by countries whose housing finance system is not devo-loped.

Aggreement System

Individuals, who want to buy a house, tempo-rarily invest their savings with low interest rate for a spesific period to intermediaries, which are specialised on this system. After that peri-od, they have right to get a credit in proportion to their savigs. However, new housing buyers should allocate a fund to provide a continuity of the system. And new participants’ savings are put in fund that is used for giving a credit to the individuals who are already joined. Moreover in this sytem there is always needed for new participants. And government propor-tions are one of the advantages for the system (Akçay 1993: 34).

Deposit Financing

In this system the financial institutions like banks, credit unions, and pension funds, who have right to collect deposit, offer a credit with the market interest rate to individuals. Financial institutions give credit to individuals . However, they may also benefit from government subsi-dies when they give credit.

Mortgage Bank System

Mortgage system is based on two broad con-cepts which are called European type, and American type. These two different types of system have both similarities and differences, but the aim of the systems are the same. The aim of these two systems is to provide long term cheaper credit for buyers.

European Model

There are two different methods in European system. First banks may offer credit and ab-sorb the credit risk in their balance sheet. In this method there is one pool and it can be

financed with obligations issued by banks. Moreover banks can offer housing credits to in-dividuals by using that fund. This system is also called Pfandbriefe model (TOSUN, 2006). Denmark mortgage banks can be shown as second model. Moreover, these banks play a key role as a brokarage house in the process. Therefore, mortgage banks do not issued an obligation, but they just arbitrate. That’s why they do not bear responsibility of credits and they transfer these to the holder of obligation who are individual investors or firms that they demand for these. The banks only get fee from this transaction and they create different pools for this. (Guttentag, 2010).

American Model

In American model, mortgage system is based on securutization proces. The mortgage banks offer credit to their customers and then sell their credit portfolio in the secondary mortgage markets. The aim for the selling these credits in secondary market is to create liquidity.

There are severeal reasons which caused 2008 mortgage crisis in the U.S.. Those are FED’s interest rate policies, the probems oc-cured in RE appraisal system, inadequacies in auduting and regulation and problems in credit issuance etc (Coşkun, 2009: 2).

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References• AKÇAY, Belgin. (1993).Türkiye için Yeni Bir Finansman Modeli Yaklaşımı, (Gök İnşaat Tic. A.Ş. 30. Kurluş Yıldönümü Nedeniyle Düzenlenen Ulusal Yarışmada Derece Alan Çalışmalar) ODTÜ Mimarlık Fakultesi• ALP Ali, UFUK. Yılmaz, (2000), Gayrimenkul Finansmanı ve Değerlemesi, IMKB yayını, İstanbul.• COŞKUN, Yener (2009), Küresel Finansal Kriz ve Kredilendirme ve Değerleme Sorunları: ABD ve TÜRK İpotekli Konut Finansman Sistemleri Hakkında Bir Değerlendirme TM-MOB Harita ve Kadastro Mühendisleri Odası İstanbul şubesi Yayını: 223-249Internet:http://ankara.academia.edu/yenercoskun/Papers/304594/Global_Financial_Cri-sis_and_Mortgage_Finance_and_Valuation_Problems_An_Assessment_of_the_U.S._and_Turk-ish_Mortgage_Systems• Coşkun, Yener. (2011). The Global Financial Crisis and the Turkish Housing Market: Is There a Success Story?. Housing Finance International 25 (3): 6-14.• DAĞLAROĞLU, Afşın (2006), Türkiye’de İpoteğe Dayalı Konut Finansman Sistemi ve İkincil Piyasaların Oluşumu, Yüksek Lisans TeziInternet: http://www.belgeler.com/blg/1a0x/turkiye-de-ipotege-dayali-konut-finansman-siste-mi-ve-ikincil-piyasalarin-olusumu-mortgage-system-in-turkey-and-the-formation-of-secondary-markets

• Gökmen, (2012) Ekonomist, Yabancıya Satışlar Ülke Listesine Takıdı, Volume 22; 44• Guttentag, (2010), Three Ways Danish Mortgage Market Trumps U.S., Assosiation of Danish Mortgage Banks.Internet: http://www.realkreditraadet.dk/Research_-_Articles.aspx• Luciano Capoldo (2012), Interview, volume 6, Sfinance magazine internet: www.sfinance.org • Official Gzette (2007), 6th March, Konut Finansmanı Sistemine İlişkin Çeşitli Kanun-larda Değişiklik Yapılması Hakkında Kanun.• TOSUN K. Elif. (2006). Türkiyede Konut İhtiyacı ve Konut Fİnansmanı PARADOKS Ekonomi, Sosyoloji ve Politika Dergisi (e-dergi Yıl:2 Sayı:2), ISSN 1305-7979Internet: http://www.paradoks.org

“The author thanks Yener Coşkun, MRICS, Senior Specialist Capital Markets Board of Turkey, to help for preparing this article.”

Mortgage System in Turkey

The mortgage system becomes actual after the law of no. 5582 in 2007 in Turkey. The law which is in question involves essential regula-tions about primary and secondary mortgage markets. It is certain that changes in the sec-tor are occured conjunction with enaction, but it seems that market conditions have cre-ated natural boundries for further development. Mortgage systems may help to solve housing question in Turkey. However, high interest rates, short term maturities, and lack of suffi-cient income of most of the households have prevented mortgage system to be devoloped.

In conclusion, housing finance should be im-proved and well regulated in Turkey. At that point, mortgage system comes into question. Stable market conditions and effective social regulations make mortgage system more ef-fective and serviceable. In this process both private market players and also central/lo-cal government may play important role (see, Coşkun, 2011: 13).

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The School of Economics and Busi-ness, University of Sarajevo (SEBS), in Sarajevo in cooperation with Uni-versity in Melbourne, Australia, anno-unces the new Master studies in Pro-perty, for the first time in this region in academic year 2012/13. The stu-dies is organized in English langua-ge which will enable the students with opportunity to meet the most challen-ging and contemporary experiences in this field, which is the crucial ad-vantage in today’s business environ-ment.The aim of this program is the acqu-irement of professional accreditation of international accreditation agency Royal Institution of Chartered Surve-yors - RICS in Property, which will help the students to efficiently apply their knowledge in real challenges of professional business world.

The aim of the School is not only to provi-de academic and professional education in the above mentioned spheres, but to provi-de an integrated access of highly professi-onal education and practical application of these contents in the wide area of the Bal-kans.

Curriculum of these Master studies has been undertaken from University in Melbourne, where it has been acreditated by RICS. The process of accreditation on the School of Economics and Business in Sarajevo is cur-rently in process. The program will be reali-zed in cooperation with accredited lecturers and professionals in this sphere from aro-und the world, and will be completely ta-ught in English. The studies are organized as a two-year program (Master of Manage-ment – Property Applied Finances).

Course OverviewThis professional course is intended for gra-duates keen to acquire an in-depth unders-tanding of the structure and operations of the property (real estate) sector. It is rather popular because it encompasses a diverse range of skills. It allows students to deve-lop / enhance expertise in professional fi-elds such as property funding, property va-luation, property management and property development. The ethos of the course is to offer learning that introduce underpinning theories and then through case study analy-sis examine its practical orientation. The co-urse has a strong commercial focus, a prac-tical orientation, and provides the student with the essential knowledge and necessary skills.

Career OutcomesGraduates with a property specializati-on find employment as property values (e.g. employed by various financial institu-tions, consulting firms and all levels of Go-vernment), property funding specialists (e.g. employed by banks, finance brokers, non-banking lenders, collection agencies, cre-dit rating agencies, etc.), land economists (e.g. employed by real estate companies, property development companies and Real Estate Investment Trusts), property mana-gers (e.g. employed by real-estate agenci-es, property marketers, property maintenan-ce firms, rent collectors, property landlord insurers and property accountants), pro-perty analysts (employed by private consul-ting firms and all levels of Government), pro-perty investment advisers (e.g. employed by pension funds, property stock brokers, insu-rance companies, etc.), property develop-ment (e.g. employed by funds managers, banks, property investors, etc.).

This program is intended for those who want to specialize in the property industry, and by doing so gain professional qualificati-on in this increasingly demanded professi-onal field, and have the opportunity to ex-pand their existing but also embrace new knowledge in the areas such as: property

Master Studies in Property at University of Sarajevo SEBS

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valuation and analysis (such as consulting); property funding/finance (such as ban-king, insurance and superannuation); de-velopment/Investment and management of property (such as property development/investment, property construction, asset ma-nagement and facility management); and other professional practice in a property context (such as and real estate agencies, property funds management and property stock exchange).

Duration2 years full time master studies (120 ECTS) – primarily intended for those who completed 3 years of undergraduate studies in the cog-nate areas such as property, finance, eco-nomics, commerce, etc.

ContactsFor more information about the program, you may contact with the following names.

About SEBSThe School of Economics and Business in Sarajevo (SEBS) was established in 1952 as the Faculty of Economics. It was the first in Bosnia-Herzegovina to adopt and imp-lement (during the 2001/2002 acade-mic year) a curriculum based on the Eu-ropean Credits Transfer System – ECTS in 2011/2002. SEBS is the only educatio-nal institution in B&H that has been a mem-

Prof. Dr. Muharem H. Karamujic, MRICS, Associate Professor, The Sarajevo School of Economics and Business, muharem.karamu-jic@efsa.unsa.baLejla Halidović, Public Relations Office School of Economics and Business Saraje-vo, University of Sarajevo, lejla.halidovic@efsa.unsa.baYener Coşkun, MRICS, Visiting Lecturer, The Sarajevo School of Economics and Business ycoskun@spk.gov.tr

ber of The Association to Advance Colle-giate School of Business – AACSB. SEBS has been granted the accreditations by the Austrian Agency for Quality Assurance and European Foundation for Management De-velopment (EFMD) – EPAS accreditation. At present, SEBS is the only faculty in Bosnia and Herzegovina that holds European acc-reditations, which means that this institution and its diplomas will be recognized in the European Education Area.

According to Webometrics, world universi-ties’ ranking system of the WEB activities, SEBS, was ranked 390th, among the top 400 business schools in the world.

See for more accrediation facts of SEBS on the following link

http://www.efsa.unsa.ba/ef/en./