Latest economy news: Turkey property prices jump 65pc in four years
The latest economic and property news from Turkey
Property prices jump by 65% in four years
Turkish property prices are the fastest rising in Europe, with a recent report by Knight Frank showing that Turkish property prices have risen by 65.6% in the last four years.
This jump is head and shoulders of the second runner up, Ireland, where the cost of an average home has risen by 34.3% since 2012.
In contrast, in France prices are 6% lower than they were in 2012, and Ukraine they’re 22% lower.
Turkey’s leap has been driven by increasing mortgage lending, growing urban populations and sound economic growth, the report says.
Finance package to improve investment climate
Turkish finance minister Naci Agbal has released details of a package that will improve Turkish investment. The package will aim to ease the way for foreign direct investment and give foreigners more opportunities to work in Turkey.
“Our aim is to attract capital and high-quality labor into Turkey,” the minister said in an interview with daily Hürriyet.
The package will decrease stamp duty and other costs for investors, and make foreign companies exempt from paying corporation taxes if they set up their regional management hubs in Turkey.
The government will also unveil a Turquise Card, which will allow foreigners the opportunity to work in Turkey permanently. Short-term foreign workers will also be able to apply for work permits.
Agbal said some of the incentives would be subject to a property price threshold, with a minimum property purchase needed for work permits, for example. This threshold has not yet been set.
Ambitious Turkish projects soak up 40% of global investment
Turkey will invest $44.7 billion on seven projects this year, according to a World Bank report.
According to new World Bank data released earlier this month, Turkey absorbed around 40% of global investment with two megaprojects: the new airport, which is costing $35 billion, and the $6.4 billion Gezi-Izmir motorway.
Although Turkey’s investment level stayed steady last year, it was still the highest investor on the planet.
Globally, the transport sector is the most invested, while energy - particularly renewables - comes in at number two.
Economy outperforms expectations as central bank cuts rates
Following three months of cuts, Turkey’s Economy Minister Nihat Zeybekci said he expected the central bank to continue with rate cuts.
Zeybekci told Reuters he expected economic growth this year to be above market expectations, and that there was no reason to revise the current figure of 4.5 percent.
The Turkish economy grew by 4.8 percent in the first quarter of 2016, outperforming the predicted 4.5 percent. The growth was fuelled by wage hikes and spending by the influx of Syrian migrants, analysts say.
“When we have a look at the European side, we see that Turkey is still a safe harbor for money to flock [to]. In this vein, there is no need to worry about the rates. My expectation is the continuation [of rate cuts] in the same manner. A 50 basis point cut each time is a good level,” he said.
The minister also expected exports to reach $150 billion this year - just shy of the target of $155.5 billion.
Deputy Prime Minister Mehmet Simsek said the figures showed the economy was strong and the government would go ahead with structural reforms in the coming months - measures which will help Turkey outperform other emerging markets. He added that the Turkish economy was one of the fastest-growing in Europe, despite geopolitical tensions and a weakening global economy.
Wage hikes and migrants fuel Turkish economy
Public sector salary increases, a 30 percent hike in minimum wage and the flow of Syrian migrants have contributed to Turkey’s strong first-quarter growth figures.
At the beginning of the year the minimum wage was increased by 30 percent, taking it to $430 a month for just over five million workers.
The ongoing conflict in Syria has driven millions of people across the border and there are now more than 2.7 million Syrian refugees in Turkey. Many of them have bought electronic goods and cooking equipment, boosting the economy.