“Let’s talk Turkey” says The Sunday Times

Louise Callaghan of The Sunday Times wants to talk about Turkey. Following on from political instability and the resulting impact on tourism, the question has to be asked: is now the time to find a real bargain property in Turkey? You can find the full article HERE, with Property Turkey Director Cameron Deggin quoted as an expert on the state of the Turkish real estate industry.

Turkey 2015 versus 2016

Full of bustling bazaars, amazing sailing opportunities, beautiful blue flag sandy beaches, and a temperate climate, Turkey has long been one of the top overseas destinations for Britons looking to buy a place in the sun. However, following a failed coup attempt, instability has caused property prices to slow against previous years, resulting in the question – is it still worth investing in Turkey? And can you pick up a bargain today?

In 2015, the average price of real estate in Turkey saw the fastest growth out of any country in Europe – an impressive 18.9% increase on the year before. Fast forward a year and the period in the 12 months to June 2016 saw property prices increase slow to 13.9% according to a leading global housing index. Kate Everett-Allen, head of international residential research at Knight Frank says: “We are seeing some buyers adopt a wait-and-see attitude… But the actual fundamentals of the market remain relatively sound. The long term outlook may be OK.”

2015 saw a grand total of 23,000 Turkish properties sold to foreigners, of which 31% of them were from the UK. The most popular areas for investment being: Istanbul, Bodrum, Antalya, Fethiye, and Kalkan. 2016 so far, has seen foreign demand for real estate in Turkey fall by around 20% against 2015.

What impact does this have on real estate?

Despite this, most analysts agree that buyers looking for villas at bargain-basement prices are going to have to wait a little longer. However, in a country where haggling is a way of life, estate agents are noting an increased bargaining power on behalf of buyers. Cameron Deggin, director of Property Turkey says: “Our ability to negotiate and get better deals is higher now than it was a few years ago.”

“There’s a reduction in the number of Brits buying property, but what we’re seeing is that the ones who are investing are people who know Turkey quite intimately. We’re getting a higher number of such Brits coming into the market in an opportunistic way, hoping that the perception of the market as being in a bit of trouble will mean there are some good deals. Quite a few are finding them.”

Deggin says that it is currently possible to buy a home and secure a discount of around 15% on asking prices, more than double the usual reduction that estate agents can usually secure. A three-bedroom luxury beachside villa with private pool that would normally sell at around £200,000, could now sell at around £170,000 with the right bargaining power.

Some places may be cheaper, but is Turkey still safe?

Some prospective buyers are understandably anxious about safety in Turkey, especially those who have never travelled to the country before, let alone purchased in Turkey. 

The government, led by President Recep Tayyip Erdogan, are involved in military action against both Isis and Kurdish Militants in the southeast of Turkey.

So how do those who have already bought in Turkey feel about safety in the country? Susan Woolfall, who lives in Calis, Fethiye, says: “You really don’t feel the changes at all down here. Wherever you are in the world there’s always risk." 

"I feel safer here than anywhere else. The village has been as busy as normal.”

The aftermath of the failed coup attempt

If you think that buying in Turkey is going to be cheap everywhere, think again. In some places of Istanbul, prices can easily rival that of London or New York. In Bomonti, close to Taksim and known for its edgy bars, it is difficult to find anything for less than £3,300 per square metre. Five years ago, estate agents would tell you how they were selling at a quarter of that price.

However, profit levels on up-and-coming areas in Istanbul can be enormous for investors. Cameron Deggin says: “Profits can be sky high, but British buyers can be a little risk averse. What’s interesting is that since the coup attempt, many people from the Gulf and from Arab countries have starting buying in Istanbul. The speed with which the coup was crushed signalled something positive to them: it gave the impressive that the government was there to stay. That mindset can be quite hard to explain to Brits.”

The Turkish government has been making a rigorous effort to allay fears of foreign investors, following the suspension or dismissal of more than 100,000 people from their jobs. Alex Wolf, an emerging markets economist, says: “You do see efforts to increase stability. There is not necessarily a huge risk to your investment, but how your investment performs is more in question. I think you certainly have to be more selective with your investments, but you can still find opportunities. In emerging markets there is always a political risk, but you get paid for that.”

Advice to potential buyers

For those buyers who do decide to invest in Turkey, it is extremely important that careful thought and the advice of experts is taken when considering your options – getting advice from an English-speaking estate agent, lawyer, and tax specialist is an absolute must.

Since 2013, the process of buying for foreigners has been simplified greatly, and most of the main Turkish banks offer competitive mortgage rates for foreigners looking to buy in the country, as do some British lenders.

If you are exploring the possibilities of investing in Turkey, we are more than happy to answer any questions about safety, investment hotspots, and where to buy. Contact us and let's talk about Turkey.