There has been a great deal of discussion in the media about the rate at which Turkey is developing economically and how it’s becoming a tourism destination of note, as a result a growing number of individual and institutional real estate investors are starting to ask ‘is buying property in Turkey a good investment?’
To assist with investors’ due diligence and ongoing research into the viability of Turkey as a property investment destination, here’s our overview of the property investment potential in Turkey and the five main factors driving the market currently.
Firstly the long drawn out discussions regarding Turkey’s bid for EU entry finally resulted in membership negotiations being symbolically and officially opened on the 3rd of October 2005.
The opening of negotiations followed three years of Turkey judiciously adopting EU related reforms to align its country strategically with its European neighbours. The political, social and economic reform process is ongoing but Turkey has an arduous task to win round all the European nations and to be accepted for accession by circa 2015... however the country and its government are committed to the process.
As soon as negotiations were officially opened Turkey welcomed a strong and sustained wave of inward foreign direct investment from GCC nations keen to cement ties with Turkey as the nation that represents the ultimate unique fusion between Europe and the Middle East. Money has come from across the Middle East, most notably Dubai based real estate development companies such as Emaar and Dubai Holding have already ploughed and further committed billions of US dollars to significant commercial and residential property projects in Istanbul.
The commitment of these nations to the economic development of Turkey bodes incredibly well for the long term financial success of the nation and boosts the attraction of property investment in Turkey.
Secondly the tourism market in Turkey has been rapidly growing and developing particularly over the past three years. So much so that at the Arabian Hotel Investment Conference last weekend the senior vice-president of the Economist Intelligence Unit’s Corporate Network Daniel Thorniley declared Turkey to be the new ‘hot’ market for tourism in the Arab world - ahead in terms of potential for growth and expansion of even rivals such as Dubai and Abu Dhabi.
Tourism numbers rose by in excess of 20% in Turkey last year and 2006 projections from the Turkish tourism minister Atilla Koc are for visitor numbers to top the twenty one million mark. The first quarter of 2006 recorded growth in the tourism sector despite Turkey suffering a negative reaction following the discovery of avian flu in the country, and the number of visitors booked in already for the summer season is higher than 2005.
Going forward Turkey is rapidly developing key infrastructure projects along its southern Riviera region. New road networks and transportation links are being developed, an increased number of flight operators are now flying to Turkish airports from across Europe and North America and the nation is becoming more accessible and more desirable thereby increasing its potential to grow as a tourism hub in the future.
Thirdly property in Turkey is already booming in terms of both demand and price increases in Istanbul and along the southern coastline in towns and cities such as Side, Fethiye, Altinkum, Alanya, Marmaris, Kusadasi and Bodrum. Istanbul recorded up to 85% growth in residential property prices last year and according to local estate agents working in the residential property market in the city, 2006 could see increases anywhere from 80% - 120%. Property price increases along the Turkish Riviera have been driven by a growing demand for holiday homes and apartments and individual investment properties. Investors from the UK, Ireland, Germany and Canada are especially keen on properties with good communal facilities and close to local amenities which they can buy to let out to the growing tourism market.
Fourthly Turkey’s expanding economy is leading to a growing number of international companies establishing and expanding manufacturing and retail bases in the country. This is leading to an increase in the numbers of jobs available, a growth in GDP and an increase in demand for commercial property in Turkey which presents a potential investor with another market sector to explore.
Washington-based management consulting firm A.T. Kearney recently named Turkey one of the most attractive markets in the world for mass retailers and food retailers as it is a country with a strong GDP, a massive and expanding population and a nation with a fragmented market place meaning that there is huge potential for growth and expansion in Turkey which creates opportunity that will likely result in strong levels of sustained foreign direct investment.
This would have the effect of pushing up demand for commercial property in Turkey and already institutional investors from the world of finance have been examining the commercial property market in Istanbul with a view to investment. Financial institutions such as Morgan Stanley, UBS, Deutsche Bank and Credit Suisse have been actively researching Istanbul’s commercial sector while Dubai Holding have already committed five billion US dollars to the development of commercial property projects in Istanbul.
Finally there exists in Turkey a massive local demand for residential real estate. The Turkish government are committed to addressing the huge housing deficit that exists and also to raising the standards of living that many Turkish families endure. Over the long term this may represent an alternative investment opportunity for companies wishing to work with the Turkish government on public housing related projects. According to a recent article from Reuters there is a deficit of 600,000 houses in Turkey’s main cities alone which gives an indication of the scope for development in this emerging nation.
So, is buying property in Turkey a good investment? Many people seem to think so and the economic and political developments occurring in Turkey right now seem to support the long term investment ambitions of individual and institutional investors from around the world.
Source:Amberlamb
To assist with investors’ due diligence and ongoing research into the viability of Turkey as a property investment destination, here’s our overview of the property investment potential in Turkey and the five main factors driving the market currently.
Firstly the long drawn out discussions regarding Turkey’s bid for EU entry finally resulted in membership negotiations being symbolically and officially opened on the 3rd of October 2005.
The opening of negotiations followed three years of Turkey judiciously adopting EU related reforms to align its country strategically with its European neighbours. The political, social and economic reform process is ongoing but Turkey has an arduous task to win round all the European nations and to be accepted for accession by circa 2015... however the country and its government are committed to the process.
As soon as negotiations were officially opened Turkey welcomed a strong and sustained wave of inward foreign direct investment from GCC nations keen to cement ties with Turkey as the nation that represents the ultimate unique fusion between Europe and the Middle East. Money has come from across the Middle East, most notably Dubai based real estate development companies such as Emaar and Dubai Holding have already ploughed and further committed billions of US dollars to significant commercial and residential property projects in Istanbul.
The commitment of these nations to the economic development of Turkey bodes incredibly well for the long term financial success of the nation and boosts the attraction of property investment in Turkey.
Secondly the tourism market in Turkey has been rapidly growing and developing particularly over the past three years. So much so that at the Arabian Hotel Investment Conference last weekend the senior vice-president of the Economist Intelligence Unit’s Corporate Network Daniel Thorniley declared Turkey to be the new ‘hot’ market for tourism in the Arab world - ahead in terms of potential for growth and expansion of even rivals such as Dubai and Abu Dhabi.
Tourism numbers rose by in excess of 20% in Turkey last year and 2006 projections from the Turkish tourism minister Atilla Koc are for visitor numbers to top the twenty one million mark. The first quarter of 2006 recorded growth in the tourism sector despite Turkey suffering a negative reaction following the discovery of avian flu in the country, and the number of visitors booked in already for the summer season is higher than 2005.
Going forward Turkey is rapidly developing key infrastructure projects along its southern Riviera region. New road networks and transportation links are being developed, an increased number of flight operators are now flying to Turkish airports from across Europe and North America and the nation is becoming more accessible and more desirable thereby increasing its potential to grow as a tourism hub in the future.
Thirdly property in Turkey is already booming in terms of both demand and price increases in Istanbul and along the southern coastline in towns and cities such as Side, Fethiye, Altinkum, Alanya, Marmaris, Kusadasi and Bodrum. Istanbul recorded up to 85% growth in residential property prices last year and according to local estate agents working in the residential property market in the city, 2006 could see increases anywhere from 80% - 120%. Property price increases along the Turkish Riviera have been driven by a growing demand for holiday homes and apartments and individual investment properties. Investors from the UK, Ireland, Germany and Canada are especially keen on properties with good communal facilities and close to local amenities which they can buy to let out to the growing tourism market.
Fourthly Turkey’s expanding economy is leading to a growing number of international companies establishing and expanding manufacturing and retail bases in the country. This is leading to an increase in the numbers of jobs available, a growth in GDP and an increase in demand for commercial property in Turkey which presents a potential investor with another market sector to explore.
Washington-based management consulting firm A.T. Kearney recently named Turkey one of the most attractive markets in the world for mass retailers and food retailers as it is a country with a strong GDP, a massive and expanding population and a nation with a fragmented market place meaning that there is huge potential for growth and expansion in Turkey which creates opportunity that will likely result in strong levels of sustained foreign direct investment.
This would have the effect of pushing up demand for commercial property in Turkey and already institutional investors from the world of finance have been examining the commercial property market in Istanbul with a view to investment. Financial institutions such as Morgan Stanley, UBS, Deutsche Bank and Credit Suisse have been actively researching Istanbul’s commercial sector while Dubai Holding have already committed five billion US dollars to the development of commercial property projects in Istanbul.
Finally there exists in Turkey a massive local demand for residential real estate. The Turkish government are committed to addressing the huge housing deficit that exists and also to raising the standards of living that many Turkish families endure. Over the long term this may represent an alternative investment opportunity for companies wishing to work with the Turkish government on public housing related projects. According to a recent article from Reuters there is a deficit of 600,000 houses in Turkey’s main cities alone which gives an indication of the scope for development in this emerging nation.
So, is buying property in Turkey a good investment? Many people seem to think so and the economic and political developments occurring in Turkey right now seem to support the long term investment ambitions of individual and institutional investors from around the world.
Source:Amberlamb
