In contrast to the less-than-rosey outlook in the United States and much of Europe, the Turkish real estate sector is moving at full steam ahead due to a rapidly growing population and sustained economic growth, with Deutsche Bank predicting five to six per cent real growth per annum over the next 10 to 15 years.
Due to tight regulations in the country’s recently reformed financial system, Turkish banks’ direct exposure to the sub-prime mortgage meltdown is minimal. As such, analysts at Merrill Lynch have concluded that the Turkish property sector offers a real ‘safe haven’ during the global financial turmoil.
A recent survey of leading investors by Price Waterhouse Cooper and the Urban Land Institute gave the Turkish metropolis of Istanbul the highest “buy” rating of any European city, with Turkey seen as “a market offering phenomenal prospects”.
Low property prices and the possibility of European Union membership (2015 is the target year for entry) contribute to making Turkey an attractive proposition for those looking for a home overseas with investment potential.
Changes to the law in Turkey regarding mortgages means that the demand for Turkish property is set to rise dramatically. Investors can now gear existing equity to take advantage of the low prices offerred by developers. Furthermore, mortgages have recently become available to overseas investors, increasing Turkey’s popularity. Some financial institutions forecast that the value of Turkish property is expected to appreciate in beach front areas by as much as 50% initially, with forecasts for the next two to three years reaching 100%.
The country’s flag-carrier Turkish Airlines (a Star Alliance member) is also bucking the global trend having enjoyed 20 percent annual growth over the past five years despite the worsening outlook of the sector. Meanwhile, low-cost operator Easy Jet was one of several airlines to announce new routes from the UK in 2008, improving air access to Turkey and helping promote tourism and the property market in the coastal tourist resorts, where the majority of the 23,000 British property buyers are concentrated.
Figures from the Turkish Tourist Office and the Association of British Travel Agents show that Turkey is now the most popular destination for British tourists, overtaking traditional favourite Spain.
Turkey is an attractive investment to purchasers looking to catch an emerging market from the start while Turkey is on the verge of becoming a mainstream international holiday destination. The property market is in its initial stages of development and thus offers excellent value for money. Quite simply, Turkey is one of the brightest property investment hot-spots in the emerging overseas property market today and promises a bright future.