Turkey’s still a favourite with buyers from Gulf countries. Thanks to a raft of government reforms and a favourable currency balance, Turkey - and especially Istanbul - are firmly on the radar for these investors.
Currently, half of foreign property sales in Turkey are to buyers of Gulf countries. Data from 2016 shows that Saudi Arabia tops out the list of Gulf investors - and are the third largest group of foreign investors. In second place is Saudi Arabia, followed by Kuwait, Qatar and Bahrain.
Easing the way
Earlier this year the Turkish government launched the golden visa scheme, offering citizenship to foreigners who bought property worth at least $1m. The government predicts the new law will prompt an extra $1billion in property sales revenue in 2017.
Other changes in stamp duty, land registration and VAT laws are also expected to help boost the real estate sector.
Istanbul: a hot favourite
Due to its pivotal location, rich culture and historical attractions, Istanbul’s always been a hot favourite with overseas investors. Last year, foreign investors bought 18,189 properties across Turkey. Almost a third of these purchases took place in Istanbul.
Gulf investors are attracted to Turkey due to its stability, says Property Turkey director Cameron Deggin. “Interest from Gulf buyers has been growing steadily in the last decade, and with the recent government measures we’re expecting a boom in sales, especially in Istanbul,” he says.
Deggin, who is based in Istanbul, says the lack of barriers preventing sales is a big draw to buyers. “ Certain structural steps introduced by the government to ease entry are very appealing. As is the fact investors have sound exit strategies when they’re ready to cash in their chips.”
And of course, for Gulf buyers, there’s the cultural ties that make cities like Istanbul so appealing. “The mosques, the food, the culture - it’s similar to back home. With the added bonus of historical attractions, proximity to the sea, and excellent shopping opportunities.”
A favourable currency balance
The appreciation of the US dollar against the Turkish lira is also benefiting foreign investors, including Gulf buyers, whose currencies are pegged to the dollar. The dollar, which has appreciated by around 20% against the lira since September 2016, means a property worth $1m fell to $800,000 from a foreign investor’s point of view. Add to that the new VAT exemption, the property price is now $664,000.
Deggin admits demand for Turkish property dipped due to ongoing security problems with neighbouring Syria. However, since the referendum, he believes things are back on track.
“As predicted, economy and industry, no longer held back by political squabbles, are in recovery. A favourable economy means excellent conditions for investors, and we see no reason for this to change in the near future.”
If you’d like to discuss investment opportunities with Deggin please email [email protected].
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