No sign of a property bubble in Turkey encourages investors
Property and rental risesProperty prices throughout the country increased by 1.41% in July 2014, with rents rising 1.17% during the same month. Despite weakened demand, the appetite for investment has improved markedly, with interest in resort-area apartments growing significantly.
Always a favourite with foreign investors as well as tourists, the southern Mediterranean city of Antalya experienced a boost this year. Turkey’s most rapidly-growing city saw the biggest rises in residential rental values. Property prices in Antalya rose by 0.5% in July while rentals grew by 1.69%, indicating a growing buy to let opportunity.
Istanbul achieved the highest property price increases with a 1.80% leap in July.
Sustainable growthThe property market has slowed down from its rapid trajectory of the last decade to settle into more sustainable growth. An Ernst & Young statement remarked that while growth has slowed down, the construction industry continued to expand, indicating a stable economy that has moved away from the threat of a property bubble formation.
Investor interest remains high, and the audit firm believes that foreign investors will bolster the domestic property market.
A report by property researchers Cushman & Wakefield claims that: “Domestic demand is likely to fade into the background this year due to tight credit and high inflation. However, conditions for consumer spending and investment are expected to improve in late 2014 and these two elements of the economy are expected to return to health in 2014.”
Economic confidenceThe Turkish Statistical Institute has confirmed that Turkey’s economy grew by 3.3% in the first half of 2014, with GDP rises of 4.7% and 2.1% in the first and second quarters. Turkey’s Central Bank attracted $6.8 billion of foreign investment in the same period, a 28% improvement over the same period the previous year. Of this figure, foreign real estate purchases equalled $2 billion.
The main playersQATAR: A Qatari food company has just agreed upon a $500 million investment into Turkey’s agricultural sector. Turkey and Qatar are aiming to increase mutual trade over the coming years, with an agreed figure of $1.5 billion. The two countries have also talked about a possible free trade agreement.
AZERBAIJAN: $20 billion will be poured into the Turkish economy with the construction of the Trans-Anatolian gas pipeline. The construction will benefit both countries, transporting 16 billion cubic metres of gas each year, providing jobs and competitively priced energy. Turkey and Azerbaijan are currently strengthening ties with this and other energy-related projects.
UAE: Tourism from UAE nationals is up by 65% this year, and the two countries are planning ways to strengthen ties. A new villa project in Turkey’s Sapanca Lake region has already attracted $5 million of investment from UAE buyers.