Is It The End Of The Road For Low Priced Istanbul Property?

Istanbul Property Arab Investors Competition is hotting up In Istanbul. When you see a boom in an emerging market, it will often attract a flood of investors from all around the world who want to get in on the action. This can often mean that all those special deals start to dry up.

If someone were to give you a 10 – 20% return on investment every 12 months I am sure that as a serious investor, you would be queuing around the block.

The Istanbul property market has been going through a boom phase for the past 3 years and the loosening of restrictions that allowed investors from more countries to purchase property has played its part in adding more rocket fuel in 2012 and at the start of 2013.

If anything the speed of growth even in January is looking to outpace that of 2012. If it is maintained for the next 12 months we could see another 11% added and there is no reason why this won’t be the case, with all the forecasts pointing towards further economic growth.

Last year saw a surge of interest from Gulf States as any restrictions on their investment in property in Turkey were lifted. This reminded me of a similar boom in East European property back in the mid- 2000s.

Only then it was Russian investors who began to move in and they were prepared to pay whatever it took to gain a piece of the action. This meant that developers became a little less willing to make deals as competition for property heated up.

Investors like to take calculated risks and when it comes to overseas property they are more likely to look closer to home and to what is familiar territory.

This is why we are seeing increasing numbers of Gulf investors looking at the benefits of investing in Turkey. Afterall its people share the same religion and the culture will be familiar to them making it feel like less of a risk.

According to the FT one developer alone sold 1,300 Istanbul units to investors from Saudi Arabia, the United Arab Emirates and other Gulf states when restrictions were lifted.

Turkey’s charm offensive certainly looks to be paying off with trade between it and the UAE quadrupling to $5.2 billion in the first half of last year.

The UAE is now Turkey’s second largest trading partner after Iraq, which leaves it in the healthy position of not being reliant on struggling Europe for its economic growth. Its current account deficit has been a worry for overseas investors, however it was also reduced dramatically last year.

Istanbul, Turkey’s engine for growth stands to benefit hugely from this extra investment and with GDP growth expected to hit the 4% mark in 2013, the signs are looking good for its property market.

The only problem for property investors is they may need to pay more for property if supply fails to keep up with demand and prices continue growing at 10% or more per year. However,  it has to be said, that there is still a long way to go before the price of property in Istanbul catches up with its equivalent in Western Europe.

What are your thoughts on Istanbul’s property market this year? Please leave your comments below:

Kind Regards

Brett Tudor
Property Expert

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