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Straight Talk: Is 2020 the right time to buy Turkish property?


For many of us, 2020 is a year we'd rather forget. It was the year when everything stopped: lockdowns all over the world sent people indoors, masks and hygiene measures entered the mainstream.

In Turkey, where coronavirus was tackled head on, lockdown was brief and decisive. 

"We're an emerging market we can't tolerate closing," says Property Turkey senior investment consultant Justin Mays.

Read more: Straight talk with Cameron Deggin

"Every industry is up and running, we're working." Precautions like masks, public gatherings and a stellar contact tracing system has meant that while other countries move in and out of lockdown, Turkey has remained steady.


A flood of enquiries

And nowhere is this more in evidence than in Turkey's real estate sector, which saw a flood of enquiries after lockdown ended, Mays says. 

"People are asking, how are you busy during covid? I'm selling property online, I'm selling to people who have never even set foot in Turkey because they see the opportunity here. This time last year we would get around 40 organic leads each day. Now we're between 100-120."

The numbers are born out in a recently released report from Knight Frank.

According to the real estate consultancy's latest Global House Price Index for the second quarter of 2020, Turkey leads the annual rankings with prices up 25% year-on-year. 

"That's telling you there's been a 13% growth in one quarter," Mays says. "This is really unheard of. It's positivity in the market right now."


What does that mean for buyers?

"I know it seems like a cliche, but a lot of indicators are pointing that now is the time to buy."

Those who wait might find themselves priced out of the market, Mays says.

"In two years time you might not be able to buy."

It's already happening, Mays says, describing some clients that began searching earlier in the year for the perfect home to match their $500,000 budget. 

"Earlier, we were finding properties matching their criteria but nothing checked all the boxes. Eight, nine months later, we can't even find the semi-good properties as the prices are now exceeding the client's budget."


Should I enter a post-covid property market?

Absolutely, Mays says. "Even with these negative influences: covid and currency devaluation, we're still growing."

All going well, Turkey's economy will expand by at least 5%, he says.

"Turkey's downward slide was in 2018. In 2019, there was growth, and this year even with covid we're outpacing 2019. In two years' time, if we continue with this rate of growth, the people who were wanting to get into a certain property at a certain price point, won't be able to do so."

That's down to a strong domestic property market, Mays says. Turkey has a young and upwardly mobile population, and the first investment of young couples is a home.

Many will buy in cash, avoiding the risk of a credit crash as was seen in the USA.

"There's a misconception that Turks don't have money. But they'll buy bullion or jewellery: gold prices are at a all time high. There are families that you think don't have money but they have hundreds of thousands of lira in gold: it's a cash-driven system."


The slide of the lira

For some, the rate of the lira's depreciation will be a shock, Mays said. However, the devaluation of the currency is part of a long, historical pattern, where the lira devalues and then is equalised by inflation.

But this also provides an opportunity for investors, Mays explains. The weak currency makes Turkish goods attractive overseas, and Turkish exports are entering new markets. These opportunities will mean growth later on when the currency recovers. 

"If you invest today that dollar goes from where it is at 7.90 to let's say 6.90, and you invest today, how much money did you make? A lot."

"There are factors beyond what you see," he explains. "Do you as the investor understand the economics of Turkey? Or are you reading the newspapers and seeing Turkey's unorthodox approach and saying hey that's a bad idea? That's not what an investor would do."

Mays has a final piece of information for investors to mull over.

"New developments in Istanbul, are disappearing. There's only a handful of really nice new developments. So in two years, what do you think the demand for those developments will be?"

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