Why I’m Not Going Cold On Property In Turkey – Just Yet

cold-turkey-propertyUnderstandably the markets have the jitters at the moment, everyone is a little bit jumpy about things like bubbles, some have even suggested Turkey might have a property bubble quietly inflating itself in Istanbul – I don’t think so and here’s why…

If you live in the UK as I do or take a stroll through a Spanish town, one thing both countries have in common are closed for business signs or liquidation sales.

Dwindling high streets are a fact of life for towns and cities all around Europe as economic problems hit hard, but there is a country not too far away where the opposite is true – that country is Turkey and more specifically its most famous city – Istanbul.

Buoyant economies bring out the shoppers, there is no argument against that and when we have more people shopping, then we also have more people shopping for property.

A report by real estate services firm CBRE puts Turkey at 14th out of the 70 countries they surveyed for its appeal to international retailers.

Retailers don’t invest in foreign countries without knowing it will be profitable and Turkey’s demographics mean that there is a high rate of youth in the population and they are spending.

Now there are some people who have asked me recently “Is Turkey in a bubble?”

To this I say, there is only a bubble if the people who live in the country are spending beyond their means and there is nothing to underpin the value of assets.

So I point out the fact that tourists are literally flocking to Turkey’s shores.  Cruises docking in the country have risen 276 percent over the past nine years. The first five months of this year have already seen 300 cruise ships bring 353,000 tourists to the country.

Not satisfied those same people ask, “yes but this alone is not enough to sustain a growing property market at the levels we have seen in Turkey the past three years”

My answer to this is Turkey has certainly powered out of the global recession to become the fastest growing economy in Europe making it an economic tiger in world markets. It is also a growing world power with EU membership on the horizon.

So with property investors increasingly looking to emerging markets to earn investment returns, Turkey property continues to be a lucrative market in which to invest for high capital growth.

Economic growth, stability, undervalued property, a long holiday season, good accessibility, strong rental yields and a sound exit strategy are still proving irresistible to savvy investors.

So competitive are property prices in Turkey that the majority of quality new developments are often sold out within 3 months of their official launch.

Turkey has the fastest growing population in Europe, which is expected to hit 83 million by 2023 – up from its current 77.8 million.

Istanbul is the fastest growing city with a population of 12.7 million expected to rise to 15 million by 2023.

Turkey’s rapidly expanding population is creating incredible demand for housing both to invest and to rent. It is predicted that 500,000 units will be needed by 2015, 250,000 of which will be needed for Istanbul alone.

Such demand will continue to push property prices and rental yield upwards

On this evidence I need to find a reason not to invest in Turkey.

What do you think about the prospects for the Turkey property market? Please leave your opinions and comments below.

Kind regards

Loxley McKenzie
Managing Director