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Investor's Guide |
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We all know that investing in brick and mortar is one of the safest ways of making your money grow. It is less risk bound than, say, investing in a stock market and if you are in it for the long haul your property will always go up in value and bring you profit. |
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Before jumping into a market and choosing a property an investor would look at a number of factors such as political stability, economic growth, levels of employment and which businesses are moving into the area. In recent years, Turkey has attracted investors’ attention as the country’s economy is growing at an impressive rate of 7% annually. The Government is introducing incentives to attract more foreign direct investment. Also Turkey ’s inflation levels fell from a soaring 90% in 2001 to 11.7% in July 2006 and it continues to decrease. Turkey ’s current Government with a pro-European approach is open to reforms in order to comply with the EU standards. The projected date of Turkey joining the EU is 2015.
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Although these factors are important they are not paramount. It is because Turkey is primarily ‘a sun location’ and investing in a property there relies largely on the county’s hot climate, beautiful landscape, hundreds of miles of sandy beaches and lots of sun all year round. As a consequence, Turkish tourism is booming.
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In 2005 tourist numbers grew by 25% comparing to 2004 and reached 22 million - the fastest growth in Europe. |
These may not be the first thing that a property investor would look at in their assessment but these are vital factors when considering a sun investment.
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| Turkey ’s Mediterranean climate and over 300 days of sunshine make it an ideal sun investment and a location that is very attractive to all groups of tourists. |
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Locations preferred by foreign property buyers are holiday resorts on the west and south coasts along the Aegean and the Mediterranean seas as well as large cities such as Istanbul where prices have been appreciating greatly due to shortage of housing and an increasing demand from both local and foreign buyers. |
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You should budget around 5-7% of the purchase price for above expenditure. A full breakdown of these costs will be given to you. |
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Strong Local Market
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Turkish property market derives its strength from the fact that it does not rely solely on the foreign demand but has a strong domestic market. Turkey has a very young population with 50% of it under the age of 25. Also, Turkey’s improving economic situation has led to an increase in consumers’ spending and the introduction of the mortgage system for Turkish nationals last year created an unprecedented demand for properties. According to State Institute of Statistics in 2005 the number of building permits granted increased by 43% and the number of apartments built grew by 57%. However, this number is still far from meeting the demand. |
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| Turkey is an emerging market which is attracting a lot of interest from home buyers and the demand for properties does not show the signs of stopping. The change of the law in 2003 which gave foreigners equal rights with the Turkish citizens to purchase a property contributed greatly to creating a strong demand. That, together with undersupply of properties has led to a substantial increase in property value. |
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The highest capital appreciation has been observed in coastal areas where properties’ prices have been growing depending on location by 25% to 100% per annum.
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| This period of very strong capital growth is expected to be sustained for at least five more years as the Government’s target is to sell 100,000 properties to foreign buyers within that time. |
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The good news for buy-to-let investors is that a growing number of tourists are now moving away from package holidays to self booking. Also, the Ministry of Culture and Tourism’s strategic plan is to attract 30 million visitors to the country by 2010 which will strengthen the buy to let market. Turkey is only a 3.5 hour flight from the UK and there are flight services from 22 UK airports.
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| The growing number of tourists from the UK is facilitated by very attractive charter flights as well as by this year’s entry of Easy Jet with daily flights from Stansted to Istanbul . |
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| Rental Seasons in Turkey |
Low Season |
November - December - January - February - March |
Mid Season |
April - May - September – October |
High Season |
June - July – August |
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The level of rental returns you can get in Turkey depends on factors such as: |
 Proximity of your property to the airport, ideally it should not be farther than one hour drive |
| Distance to the beach |
| Available facilities close to the property and within the area (shops, restaurants, sport facilities, swimming pool, car park, etc.) |
| Quality and appealing look of your property |
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It is important to think long term and ask yourself a question: will there be a buyer for my property when I decide to sell it? Before taking a plunge into a market make sure that the area will enjoy a sustained demand for properties and that there will be no danger of oversupply. If your property is in a good location and is easy to let it automatically becomes attractive to buyers who can see the potential it offers.
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| Talk to us and we will help you identify the areas which have the right qualities and which are expected to enjoy sustained demand without the risk of being oversupplied. |
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Solmet Limited,13Kkingsley Road, London, NW6 7RH |
Copyright 2006© Solmet Limited. All Rights Reserved |
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