Classified as an emerging property market Turkey has been experiencing heightened interest from property investors from abroad. Below we have listed several reasons explaining why Turkey has become one of the most sought after locations for property buyers.
Long awaited EU accession talks in October 2005 ended with success and, as a result, Turkey has experienced an increased interest from foreign and domestic investors. Turkey is expected to join the EU in 2015 and is ready to cooperate and introduce substantial changes in order to comply with the EU standards.
Stable currency, 4 consecutive years of economic growth (7% annually)
Government sponsored tourism investment projects. The government’s target is to create dynamic real estate market driven by tourism.
Tourism is one of the main forces for the Turkish economy with hotels, restaurants, transport and communication, as well as real estate generating the bulk of the country’s revenue. Turkey generated 18 billion dollars of revenue from tourism in 2005 that accounts for 12 % of the country’s GDP. 10% of employment comes from tourism industry.
Increasing FDI (foreign direct investment) 11 billion dollars in 2005 (e.g. Vodafone, Tesco)
High property prices in Spain , Cyprus and France has seen attention focus on alternative locations such as Turkey.
Turkey is the gateway to the Middle East and Caspian petroleum, and the Central Asian natural gas, which are regarded as the main energy reserves of the world. The Baku-Tbilisi-Ceyhan pipeline opened in June 2006.
Turkey is also a major trading partner with the UK , which is the 5 th largest investor in Turkey . British firms cover a wide range of sectors and over 41 British companies have invested in Turkey.
Turkey has the youngest population on the continent with 45% of its inhabitants under the age of 25. This underscores Turkey ’s skills and learning capacity and creates a strong local market.
Turkey ’s dramatic growth has helped to create employment. Unemployment rate fell to 8.8% in 2006. Inflation based on consumer prices in 2006 stands at 11.7% and interest rates declined to 19%.
Excellent capital growth at around 25% annually.
No capital gains tax after 5 years.
Turkey, A Place in the Sun
Turkey is a beautiful country with hundreds of miles of sandy beaches and with lots of sun, all year round.
The daily temperature along the Aegean and Mediterranean coasts in July and August ranges between 33°C and 36°C and the winter temperature ranges from 15°C to 20°C.
Turkey attracts long term renters and retirees who want to escape the British winter as well as those who move there for permanent living.
There are flight services to Turkey from 22 UK airports.
Easy Jet is introducing daily flights to Istanbul from London Luton airport from September 2006.
British Airways have introduced flights to Izmir from Gatwick and increased flight frequency to Istanbul to 3 flights a day.
2002/2003 saw introduction of new EU building standards and foreigners were enabled to purchase freehold property.
This created strong demand from both domestic and foreign investors. Shortages of stock led up to 40% capital growth in Mediterranean coast, some places performing 100%.
Last year the number of building permits granted increased by 43% and cost of building increased by 14%. Also there was a 57% increase in the number of apartments built (According to Institute of State Statistics ). However, this number is still far from meeting the demand.
Introduction of mortgage system in the second half of 2006 is going to have an enormous impact on property prices.
Turkey has huge tax advantages over many other locations.
Low cost of living and availability of good and affordable health services.
What Differentiates Turkish Property Market From Other Countries
Property prices are relatively cheap; 2 bedroom apartments start from £20 000.
Straightforward buying process, no red tape.
There is no need to set up a company.
There are no restrictions regarding letting your property.
There is no limit as to how many properties an individual can buy.
Foreigners are entitled to have the same rights as Turkish nationals when buying a property, this includes taxation.
Stable currency, 4 consecutive years of economic growth (7% annually)
