Turkish referendum will trigger property “gold rush”
Last week’s referendum results sent shockwaves around the world, with world leaders weighing in on what Turkey’s future will look like once the dust settles.
Fifty-two percent of voters ticked the “yes” box, which will see sweeping constitutional changes - the most well known of which will see President Recep Tayyip Erdogan transform his ceremonial presidential role into an executive presidency, allowing him greater powers than ever before.
Read more about the referendum here: YES: Turkish voters give the nod to constitutional changes.
Stable politics = strong economy
Following the result, the long-struggling lira strengthened, gaining significantly against the dollar. In the medium term, international ratings agency Fitch says the ruling party’s triumph could prompt the government to embark on the economy-boosting fiscal measures and structural reforms they’ve been holding back on.
The AK party has a stable of strong economic reforms, but with the political uncertainty of the last few years, few have been implemented. The referendum result has certainly given the government some breathing room, allowing the AK party to avoid early elections and move away from the political tumult of the last months, which will allow a greater focus on vital economic reforms.
A country moving forward
It’ll be some time before the dust settles and we really see what these changes mean for Turkey. However, early signs are positive - at least in the fast-moving property sector, says Property Turkey director Cameron Deggin.
“Now the referendum’s over there’s a real sense of, ‘well, let’s get on with it,’” he says. "Investors have been holding back the past few weeks waiting to see which way the results would go. Now investors are back, and triggering a wave of development."
He cites five major Istanbul developers who had been letting their plots lie fallow, waiting for the political tumult to die down before striking ground and beginning construction. After the result was clear, the developers announced a number of new projects.
“Developers green lighting large projects sends a significant, very positive message to investors wondering whether to take the plunge with Istanbul property.”
While European investors are hesitating, Deggin says there has been a huge spike in interest from Middle East and Chinese investors.
“These investors are all on hot alert, our web traffic has increased by 39 percent since the result, as have enquiries about Istanbul investment property. “The next few months are going to be a gold rush here. Serious investors need to think about making a move before the inevitable price hikes which follow a spike in demand.”
Forging ahead with urban regeneration
Deggin says developers are concentrating on property in areas undergoing urban regeneration in Istanbul.
"Property in these fast-developing areas means a rare opportunity for investors," Deggin says. "Government investment in the projects and in the infrastructure of the surrounding areas means a solid, safe investment, with the added bonus of excellent capital gains."
Deggin cites previous areas of the city like Bomonti, where prices have doubled in the last three years. "Bomonti is just one success story, other areas will have similar tales to tell in three years."
Post-referendum property picks
Deggin cites four projects he'll be keeping a close eye on in the coming months.
Central Istanbul at pre-launch prices
Units are currently on offer at below entry-level prices, allowing investors to benefit from a 50% price growth upon completion. Once completed, investors will benefit from 8% annual rental income, and steady capital gains in line with central city property. Residents will be attracted to the development's proximity to public transport, road links and Ataturk International Airport.
Sea view apartments in West Marina
As well as ticking boxes for lifestyle buyers, including expats looking to relocate to Istanbul, investors are also on board, attracted to the development's low entry prices and the prospect of steep capital growth.
The Avenue: prime Bahcesehir investment
The extensive development is designed with community in mind, with extensive facilities for residents, including a shopping street containing more than 100 shops. It enjoys great travel links, connecting residents with the rest of the city, including Kanal Istanbul, which is just 10 minutes away, and Istanbul New Airport, a 20 minute drive away.
Golden Horn apartments at first-call pricesapartments in Istanbul on the market that offer similar or better terms." Property Turkey is able to offer prices that are 13% lower than list price - a significant part of what allows investors to make such excellent gains.
The project's higher units have beautiful views over the Golden Horn, and the development has excellent lifestyle facilities including shops and leisure facilities. Residents enjoy easy access to the central city via roads and metro systems, and rental potential is around 7%, higher than the city average, which is currently around 5%.