While many people think of Turkey as a holiday destination, if you’re serious about investment you need to get out of the place-in-the-sun mindset and look to the areas where internal demand is driving prices, explains Cameron Deggin.
Foreign demand for property in Turkey can fluctuate, which is why it's important to focus on areas where internal demand is strong. I'm going to discuss the two premier investment areas: Istanbul, and Bodrum, and explain why each is a good investment, and where investors should focus.
Middle class earning power is also growing by around 10 percent each year, which translates to a GDP growth of around 10 percent in this demographic. Compared to the Eurozone this is phenomenal growth, and of course this also has a huge impact on the local housing market.
If we look at Istanbul, there are several areas that are prime for investment.
Urban regeneration areas
One Bomonti development in particular is proving popular with investors. It’s a luxury hotel-style freehold residence, with each of its 85 square metre apartments enjoying access to five-star hotel facilities - right in the heart of Istanbul. Prices start at around £250,000 and I expect they’ll hit the £500,000 mark in around five years time. Investors will also earn 6 percent rental income right off the bat, making this a very smart Istanbul investment.
International Finance centre in Atasehir
The International Finance Centre will create something not unlike The City of London, but with better infrastructure and a larger capacity. As the very centre of this development Atasehir will reap the associated benefits. The area already has links to the metro and top facilities, including private schools hospitals and leisure facilities.
Prices are currently very affordable. However, with a metro station due to open in 2018 and commuting to the central city becomes faster 30 minutes, as opposed to current times of over an hour - prices will increase sharply. Bahcesehir will also be connected to Istanbul’s new airport by a major motorway, which will allow travel of 20 minutes.
There are a number of affordable projects currently under development that I’d suggest investors explore. The government has a stake in some of the development, ensuring extremely low risk and a cap on prices during the development stages. If you’re focusing on speedy capital growth over the next three to five years, Bahcesehir is definitely worth a look.
Recently in Turkey there’s also been a shift in the attitude to work, and the number of people who work from home is growing. When you add increasingly frequent flights from Bodrum to Istanbul to the mix, you get a growing population of Turks who are moving from the city to Bodrum to live and work.
These factors have contributed to a demand for quality homes in Bodrum, and because the demand is internal it means investors are protected from the vulnerability to changes in foreign buying trends. So for a viable investment land and property in Bodrum is a smart idea for sure.
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