The transformation of Turkish real estate
Before 2008 Turkey was regarded as a low-cost destination full of cheap apartments in Turkey’s Aegean areas: Altinkum, Kusadasi and a few lower-end Bodrum spots, and cookie-cutter homes in places like Fethiye, synonymous for most holiday-makers and buyers with the turquoise-and-gold Oludeniz Beach. While more solvent overseas buyers headed to Spain or France at the height of the overseas buying boom, cost-focussed buyers snapped up Turkish properties at low prices, caring little about style or Turkish culture and instead congratulating themselves on obtaining a much-coveted place in the sun at a tiny price - often financed by re-mortgaging property back in their own countries.
The recession’s silver lining
In 2008, everything changed. The financial crisis was a turning point for Turkey in a number of ways. In fact, you could probably call it a watershed: a moment in time that changed the landscape of Turkish property and the way Turkey was perceived forever.
Firstly, we witnessed a slowdown in budget home sales in Turkey as banks began to discourage the release of equity and making it difficult to lend. Job security was at an all-time low and would-be buyers held off on large purchases as the markets plummeted and job losses rose. Meanwhile, the property markets in Spain and France ground to a halt. Homeowners began to sweat, leaving the beleaguered EU behind as economies crumbled.
Turkey remained a calm oasis in the turbulent financial storms. We even began seeing more and more interest in Turkey’s most exclusive (and expensive) homes: beachfront homes, island properties and bespoke luxury villas. The reason? As the Eurozone began to flounder, investors and higher-end home buyers began to look elsewhere for their place in the sun. They discovered that Turkish property was not only available at a fraction of the price of comparable property in France or Spain, but that the quality of property was extremely high - and located in some of the most beautiful coastal settings anywhere in the Mediterranean. As far as investors were concerned, low cost quality housing plus a stable, steady economy was a sure winner.
As interest beget more interest in Turkish property, we saw a revolution in design and infrastructure. Some of the world’s top residential architects were called in to design spectacular Turkish villas, blending modern luxuries with traditional Turkish sensibilities. We saw a boom in the number of high-end marina properties built as Turkey’s new well-heeled buyers sought somewhere to moor their boats. We saw eco homes spring up, tastefully blending in with their surroundings. We saw homes with private jetties, infinity pools, leisure centres and Turkish baths. We witnessed a push for local materials: Turkish marble, granite and other local stones now grace the poolside patios and interiors of Turkey’s top properties. Some of the most intelligent and aesthetically pleasing design in the Mediterranean is now found in Turkey - and it’s all thanks to the credit crunch, which saw Turkish real estate thrive while other countries watched buyer interest - and property prices - slump.
An influx of investors and property buyers inevitably encouraged a rapid improvement in Turkey’s infrastructure. Marinas all along the coast were revamped or built from the ground up to cater for the legions of new yachties who were beginning to explore the coast. Airlines began introducing daily flights out of main centres - a far cry from a decade ago when you’d have to wait a week to return home. Roads were improved, hotels were built and tourist-based businesses flourished. And alongside it all, the property business boomed.
The government began to feel the pressure of catering to the influx of foreign buyers, who were unquestionably a positive economic bonus for a country which was beginning to be recognised worldwide as a leader in economic savvy after managing to avoid the worst of the recession. The government’s response was to ease overseas buyers’ transition into the country, allowing citizens of more and more countries than ever before (including Russia and many Middle Eastern countries) to buy Turkish property, and more recently, allowing overseas property buyers an automatic year’s residency permit.
Where to from here for Turkey’s property?
As property prices in Turkey continue to rise, the gap between midrange and bargain properties in Turkey and comparable countries like Spain and France (where property values plummeted during the recession) is starting to close.
The real value for investors with an eye on Turkish real estate is the exclusive property the country still has to offer. The beachfront villa, the island home, the private luxury house with its own marina. These exclusive properties are not only exceptional in terms of architecture, location and luxury: they’re also the leaders in their field regarding capital appreciation, rising in value as much as twice as quickly as their bargain counterparts. Most attractively for investors, Turkey’s high end properties are still enticingly low priced: consider the example of a seafront property with private mooring in one of Turkey’s most exclusive areas. This property is currently priced at a shade under 1 million Euros. The equivalent in Spain or France is valued at around three times higher.
The past half decade has been one of phenomenal success for Turkey. The country’s witnessed growth in all its significant sectors: property, tourism, finance and trade. No longer considered a poor man’s alternative to a more desirable location: Turkey is the desirable location. And with some of the most exclusive and luxurious property up for grabs at reasonable prices, it’s hardly surprising that savvy investors are pulling themselves out of their French and Spanish property ruts and investing in a country that can currently do no wrong.