3 Reasons Not To Invest In Turkey



All the smart property investors are putting their money into Turkey trouble is, they might not be doing it for the right reasons…

When most investors think Turkey, they have one city in mind – Istanbul. The projected capital growth, strong rental yields and rising tourism numbers make Turkey a first-rate choice for investment.

Even beyond those city boundaries, land prices in Turkey have doubled over the past two years and they continue to rise steadily by 25–40% per annum.

Anyone who has invested in Turkey in those two years will have generated a far better return on the money they invested than if they had invested in the stock market or a pension.

Research shows that compared to 1994 figures, investments have yielded the following average returns:

Stock Market

18% (gross)

Pension Plans

-56% (net)

Turkish Property

568% (net)

(Source: Financial Times)

So it seems that Turkey property is a sure thing, but what about the pitfalls for the novice investor?

3 Reasons Why You Should Not invest In Turkey

The European Union (EU)

Many investors are purchasing in Turkey with EU inclusion as a major driving force for their investment. However, this strategy has its risk, because there are many factors yet to be discussed and issues including those involving Cyprus that need to be sorted out before inclusion will be seriously considered.

I would anticipate that growth will slow down if Turkey is refused EU entry.

The answer for investors is to take a long term view and consider the obvious strengths of major cities like Istanbul. This city has excellent prospects for capital growth regardless of what may happen regarding the EU. Joining the EU may not be the golden ticket it once was in any case.

Falling Rental Yields On The Horizon

Turkey is experiencing a property boom, with annual property growth between 12% and 20%. Unfortunately, as with all property markets that are experiencing fast-paced growth, you will find that rental yields will start falling. This is why strong growth and rising yields are such a hard combination to find.

The remedy to this challenge is to invest as early as you can, so you can lock in the lower price, benefit from future growth and the lower purchase price will then lend itself to generating strong rental yields.

Tiger Or Pussycat?

Turkey’s roaring economy has earned it the nickname “New Tiger.” If Turkey fulfils its potential, it will become one of the leading economies in the world.

It has the population, resources and strategic location to do just that. However, realising potential is always a challenge. If most things go well, we will have a “New Tiger” to deal with, if they don’t, we may be left with a Pussycat.

Either way there are no guarantees, but is there any such thing as a sure bet?

If you are willing to take a calculated risk on investing in Istanbul property follow this link http://www.colordarcy.comproperties/ To a selection of properties that will allow you to invest at low risk with a rental guarantee to help you in the short term.

Can you think of good reasons to invest in property in Turkey? We would love to hear them. Please leave your comments below:

Kind regards

Loxley McKenzie
Managing Director

Join The Conversation - Be The First To Comment

Categories: Property Invest / Turkey Property

Like What You Read? Stay In Touch

Follow Colordarcy on Twitter or Facebook