13th ERES Education Seminar in ALICANTE, SPAIN 1st-2nd Dec 2017 Academy vs Industry. A case of Real Estate Education in Emerging Market Perspective Dr. Kerem Yavuz Arslanlı, İTÜ arslanli@itu.edu.tr

TURKEY REAL ESTATE MARKET … Then & Now... •Inflation rates in single digit after 25 years(9-8) Now staring to rise again ~%10... •Interest Rates drop down from %80 to %8-9 Around %13... •Economic Crises in 2001’s, near miss 2008’s •Mortgage System introduced 2007 (Act. 5216) •%40 Foreign Banks (Fortis,HSBC...) Minor Problems with National Banks... •GDP to Mortgage Loans less than 6 percent !! •Real estate market booming, after 2015 starting to Bust?!

Then... After 2002 economic crisis in Turkey real estate market is evolved with respect to international globalization agenda. Between the years 2002 and 2008, Turkish economy has grown by 7.5%. Consequently, private consumption expenditure have increased by 8% annually, by 6% per capita and private sector investments in fixed assets have increased by 23%. In parallel, the housing and commercial real estate sectors have also demonstrated a considerable growth. Foreign capital investments and the shares of international investors in commercial real estate’s have also increased (PwC, 2012).

GDP per Capita Turkey vs Istanbul

GDP per Capita Turkey vs Istanbul

House Sales 2016-17

Real Estate Sales to Foreigners

Housing Projects & Sales Ratios to Foreigners

Banks & Mortgage Loan Shares

REITs

Inflation & Dollar

Mortgage Interest Rates 2002-2017

House Price Changes YoY

TURKEY REAL ESTATE EDUCATION The Real Estate Masters Program at Istanbul Technical University was started in 2002. The program was the first one in Istanbul and Turkey which has given more than 250 graduates in last 10 years. After 2005, the growth of real estate sector in Turkey provides new business opportunities to the educated young professionals. Alumni survey reviews the Real Estate Masters program at Istanbul Technical University and its graduates with respect to changing business environment of real estate sector. Findings of the survey reveal the need for more flexible and short-term lifelong education methods for real estate professionals.

Real Estate Education 4 Universities Real Estate Education Masters Programs (2 years with thesis) (ITU/IU/Kultur/Yildiz) 3 Universities Certificate Programs 2-3 months (Bogazici-Bilgi) 1 Undergraduate Program at IU 10-15 students graduate annually >500 total graduates since 2001

Real Estate Education in Turkey Real Estate Education Certificate Programs (3 Programmes) Real Estate Education Msc (4 Programmes) Real Estate Education Undergraduate (8 Programmes)

Real Estate Alumni Survey In order to get the contribution of courses, thesis and networking abilities of student to their future career planning, questionnaires were asked to alumnus. Their feedback is give valuable information for detecting new vision of Master’s program. The outcome of the contribution of courses for their career development get higher percentage. This might caused by multidisciplinary scheme of student undergraduate programs

Real Estate Alumni Survey The contribution of the thesis gets a hard critic from alumnus that long and demanding workload of thesis is taken little effect on their career.

Real Estate Alumni Survey Alumnus respond to contribution to their business network gets the higher score where little critic from few where their work on public enterprises. Which might get little help for static structure of government job pursuits.

Real Estate Education ITU Masters Program in Real Estate Development in Istanbul/Turkey in 2001 First Graduates in 2003 Followed in 2008 by other Universities Mortgage Regulations 2007 expand RE market and Education Sector 2007 Mortgage Regulations lead to Education Sector to short term Certificate base programs rather than 2 or 4 years Bsc or Msc

Real Estate Education Demand Side Real Estate Sector demand on internationally standardized Regulations (Valuation and Foreclosure Issues) Construction Sector dominates the market. Demand for short term executive masters international joint programmes

Real Estate Education Supply Side Real Estate Education separated into different departments Regulations and Laws affect Curriculums, Few departments run on international standards Sectors volume shrink / High Qualified Human Resources demand Way of making business in real estate is changing so the sector professionals

Real Estate Education: Turkey Joint International Programs Regulations for International Standards Highly Qualified but disconnected human resources Demand on «Asset Market» oriented programs

Q & A... Thank you… Kerem Yavuz Arslanli PhD. arslanli@itu.edu.tr