Turkey Shaken, Not Stirred – Why The Property Boom Will Continue

Turkey propertyTurkey may have been shaken to its very foundations by the recent rioting in Istanbul, however the boom in foreign investment in Turkish property continues – just ask the Russians, Arabs and British and the citizens of 80 other countries.

There has been a lot of talk recently speculating on what will happen to Turkey, will it return to the dark old days? Is Turkey about to go on a downward spiral? Nervous investors have been jamming the phone lines.

My best guess is none of the worst case scenarios is about to happen in Turkey and here’s why…

It almost seems that the media is hungry to see another country’s economy topple after Greece and then Cyprus. Yet Turkey is a different case entirely.

Turkey certainly has a history of political unrest, but to place it on a path towards self-destruction is premature. Turkey has been the top performing economy in Europe if we look at the GDP numbers and no President will seriously put that in jeopardy.

So what about demand? Have foreign investors been put off by the rampant construction in Istanbul just as much as the city’s population appear to be getting tired of it?

Far from it, if we look at some revealing statistics about investment in property…

According to Turkish press, last year’s law change allowing the citizens of more countries to invest in property in Turkey without restrictions has seen investors from 83 countries purchase property since January alone.

The Turkish environment ministry has revealed that this figure included investors from the USA to Kuwait and beyond.

Russian investors continue to be the number one purchasers of property in Turkey with 1,209 investments in real estate property followed some way behind by English investors who purchased 629 and a growing number of investors from the Gulf.

These investors are likely to be investing for the long term.

The real surprise in these recent statistics comes from an analysis of where these foreign investors preferred to invest in Turkey. The southern province of Mersin came out top last year followed by İzmir, Yalova, Bursa, Ankara and Trabzon.

Istanbul was surprisingly absent from this list which suggests that foreign investors are more comfortable with holiday home investments and the less populated urban centres of Turkey than Istanbul, which makes what has been happening at Taksim Square irrelevant to them.

Turkey’s enduring appeal amongst British and Russian investors is boosted by the general affordability of property in Turkey when compared to other Southern European holiday destinations. It has also shown consistent year-on-year growth in double figures.

Uncertainties over tax on holiday property in Spain may yet increase the appeal of Turkey further as an alternative for those investors who remain unsure about investing outside the EU.

I am sure I am not alone in thinking that for investors, the biggest concern is the immediate cost of ownership and return on that investment rather than any temporary political unrest.

What are your thoughts on the future direction of Turkey’s property market? Please leave your comments below:

Kind regards

Loxley McKenzie
Managing Director

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