What Does Turkey’s Billion Dollar Spending Spree Mean For Property Investors?

Turkey-Billion-Dollar-Investment

3 words can be used to describe Turkey this month – spend, spend, spend.

The Turkish government has taken spending on transport and infrastructure to a whole new level and we haven’t even made it to halfway through the year.

They have reached agreement on the construction of a $22 billion nuclear plant and coincidentally, according to the FT, they have also agreed a $22 billion tender to build one of the world’s biggest airports in Istanbul.

So what does all this mean for property investors?

$44 billion is a large sum of money by anyone’s standards and much of the money is being raised inside Turkey, which suggests that the country is feeling confident enough in its long term future to encourage this type of investment.

This is good news if you are an investor worried about the risk of investing in Turkish property.

However, sometimes for the humble property investor, rumours of such enormous investment can become a blessing and a curse. It can leave you thinking, should I jump in now? or should I just leave it until they build it?

Leaving it until it is built will of course be too late, however there can also be the bad news that follows these announcements such as a project being shelved until those involved can scrape together the money. This can mean a short term gain, but with the risk of being left with your pants down if the tide goes out.

When a new airport is announced, even if it is in outer Mongolia, there will be a frenzy of excitement because most investors know that with airports comes demand for land and rising property prices. Airport’s gobble up the land around them as companies relocate to be closer and the surrounding areas get a mini economic boom of their own.

India has provided us with a recent example of the good and bad of the ‘airport effect’. The price of property in Navi Mumbai for example went supersonic at the mere announcement of plans to build an airport, rising 400% according to one report. Yet in the 6 years following the announcement, nothing has happened.

Plans continue to gather dust and, worse still, the government announced this year that it still hasn’t given the go-ahead, which has led to a reported plunge in the value of property as investors no doubt leave shaking their heads in disappointed with their optimism in tatters.

That’s property investment for you, you can be the one who gets in early or the one left trying to get out while property values tumble around you.

Turkey might well deliver on the promise to build one of the world’s largest airports and the acceptance by five Turkish companies to bring the project to reality brings the project a big step closer.

The new airport will also mean that property in the suburbs of Istanbul will begin to get very interesting for property investors particularly in areas in and around the Arnavutköy district on the European side of the city where the airport will be built.

Make no mistake this project will be huge and will involve uprooting an entire forest to make way for it.

The new airport will become the new number one in Turkey flying in several million more passengers than the nearby Ataturk Airport which is currently the main gateway into Istanbul.

Construction is set for 2017 which means that in the four years prior to the airport’s construction we could well see a boost in the price of property on the European side, which has slipped behind the pace of growth on the Asian side of the city recently.

What is your view on Istanbul’s new airport? Please leave your comments below:

Kind regards

Brett Tudor
Property Expert

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Categories: Istanbul Property / Property Invest / Turkey Property

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