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Kaya translated into English means rock and was given this name because of its stone architecture. The earliest remains are from the Lycian city of Karymlassos. Following World War I and the Turkish War of Independence in 1923, which precipitated an exchange of populations between Turkey and Greece, the Ottoman Greek population of Kaya (then known as Levissi) were forced to abandon their homes. They left expecting to eventually come back, not realising the exchange was for good. They resettle north of Athens, and called the new village Nea Levissi. The muslims who arrived from Greece were offered the houses but as they were a smaller farming population chose to live elsewhere. To this day they remain largely uninhabited and for this reason it is known as the ‘Ghost Village’.

There are several restaurants in Kayakoy including some Mangal or barbecue restaurants, where you barbecue the meats yourself. You can also find gozieme (pancakes) and mezes. There are a couple of wine houses which offer a more sophisticated style of meal. There are a few small markets in the village but for a larger shop there are supermarkets in Fethiye or Hisaronu.

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