'Simply incredible': property enquiries triple amidst lira drop
A rush of investors making enquiries about investing in Turkish property amidst a flurry of panic over the fall of the Turkish lira has been described as “incredible”.
Property Turkey director Cameron Deggin said his team had experienced an influx of calls and emails from investors looking to make fast gains, and the propertyturkey.com website had received 30,000 more hits than usual yesterday.
Deggin said his company processed five online sales yesterday as news about the lira’s fall made headlines around the world.
While online property sales are reasonably common these days, five in one day was unprecedented, he said. “It’s simply incredible,” he said. “People are just buying properties online from all over the world. We expected a few more enquiries than usual but we’ve all been working overtime dealing with people from all over the world, the UK, Europe and the Middle East, but also newer markets, like the US and Canada.”
“This is the lowest the lira has been - ever. While there are obvious downsides for the Turkish economy, there are short-term gains to be made for people looking to invest in Turkey.”
What’s behind the drop?
The Turkish lira has lost more than 45 percent of its value this year, hitting a new low of 7.24 against the US dollar on Monday. The currency rallied on Tuesday, helped along by measures from the central bank.
The drop is due to US President Donald Trump’s announcement that the US would double steel and aluminium tariffs on Turkey. The move comes amidst Trump and Turkish President Recep Tayyip Erdogan trading diplomatic blows over Turkey’s detaining of Evangelical Christian pastor Andrew Brunson.
However, analysts say the crisis has been on the cards for a while, and reflects Turkey’s refusal to raise interest rates to curb rising inflation. Disputes with the US have just exacerbated the lira’s fall.
The downward slide will increase inflation, which will push the cost of goods higher.
Government scrambles to ease the fallout
The Turkish government is working hard to introduce measures to help the lira rally. The central bank has increased the liquidity of its banking sector, and more money is being pumped into Turkey’s industrial sector.
Erdogan has told the populace that Turkey is the target of an economic war, and urged Turks to sell their dollars and euros to help shore up the currency. One thing Erdogan is still refusing, however, is to raise interest rates. The president has always resisted this measure and to do so now due to pressure from external quarters would be unthinkable.
For investors, the only way is up
Deggin believed the currency has “bottomed out”, and that the lira will inch its way up.
“However, without raising interest rates there is a risk that the lira will remain under pressure. We could go lower - who knows?”
The one thing he is sure of, however, is that investors are getting a great deal right now, and that, immediate fluctuations aside, the only way is skywards for Istanbul property investments.
“All we know is that we’re working around the clock at the moment to cope with the increased demand,” he said. “When the lira rallies - and it will - there will be absolutely incredible gains to be made in the property market.”