Turkey’s ruling AKP party has won more than 49 percent of the vote following the November 1 election.
Turkish President Recip Tayyip Erdogan called the year’s second general election after his AKP lost its parliamentary majority for the first time since 2002 in June. AKP failed to form a coalition with any of its opposition parties.
.President Erdogan hailed the result yesterday, saying: "The national will manifested itself on 1 November in favour of stability."
The main opposition party, CHP, received 25 percent of the vote. Pro-Kurdish party HDP, which was a surprise winner in June’s elections, crossed the 10 percent threshold needed to enter parliament but lost 21 of the MPs it gained in the earlier elections.
A win for stability
Since June’s elections Turkey has been in a kind of limbo. The country’s unease with its directionless government meant confidence fell - along with the lira. Coupled with the growing migration crisis, and the recent Ankara attack, investors held back, waiting to see the outcome.
With the news of the AKP majority, the Lira rallied against the dollar, and was up almost 4 percent by close of business yesterday. The stock market also rose sharply, with the main share index in Istanbul up 5.5 percent in late trading yesterday.
Analysts believe that with concerns of future instability alleviated, investors will be looking to the ruling AK party for a return to past economic policy - something that President Erdogan will surely be just as keen to marshall.
Property Turkey director Cameron Deggin said the election result marks the end of a “transition period” and we should see some positive results.
“It’s been a difficult few months for Turkey, something we’ve seen reflected in the investment sector,” Deggin says. “But it looks likely that we’ll see a continuation of the market optimism we’ve seen in the last few days, which is making investors bullish on Turkey once again."
An end to uncertainty
Now the shifting sands of Turkey’s political landscape have settled, the population is looking to the future, and a country that will once more be the balancing force between east and west.
Recent unease over the migration crisis looks to have reached a turning point, with German Chancellor Angela Merkel backing a plan to offer Turkey 3 billion Euros, funds that will provide housing and infrastructure for the refugees leaving Syria. Turkey’s positive role in the migration crisis has improved the country’s relationship with the EU, and EU ascension talks look to - tentatively - be on the cards once more.
Erdogan’s track record
The last 13 years have seen unprecedented economic growth in Turkey. Between 2002 (when Erdogan’s AKP party first came to power) and 2007, the economy grew by more than 7 percent each year. Its momentum kept it going during the global financial crisis, and in 2010 growth reached 8.8 percent and in 2011 it leaped to 9.2 percent.
Behind these incredible figures was the AKP, who continued a series of economic reforms that were first implemented after the 1999-2001 economic crisis. Under Erdogan, more changes were made - one of the most significant being the privatisation of underperforming state-owned enterprises. This move opened the floodgates to foreign investment. Erdogan’s other moves included banking reforms, the lifting of restrictions on foreign investment, stabilising inflation and capitalising on Turkey’s geographical location between Europe and the Middle East to become an export powerhouse.
Against the backdrop of all these economic changes, Turkey’s population was going through a metamorphosis. Its population increased by 10 million in the decade following 2002, and the youth demographic boomed. Today, half of Turkey’s 75 million-strong population is aged under 35.
Deggin says the next two months will be crucial for property investors. The investment expert predicts the Lira will rally against the US dollar; so while property prices are favourable now, they will head skywards in the next two months, he says. “The market will take a few weeks to find its level following the election results, but we expect the new year to see rapid rises in real estate prices as everything stabilises and foreign investment starts to pick up.”Deggin predicts Istanbul property to be on investor horizons, but the enduring popularity of the Turkish Mediterranean means that the regions of Antalya, Bodrum and Fethiye will also be targets for outside investment.
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