Turkey property market

Since June 2003, when Turkey liberalized its property market for foreign buyers, over 5000 foreigners have purchased property in Turkey. The property prices in Turkey are still significantly lower than other European destinations. But as Turkey is becoming an increasingly popular place to visit, or buy a holiday home, because of its great climate and property investing potential, upward pressure on prices are starting to take hold.

Turkey is an economic success story.  In 2011 its economy is expected to continue to grow at 8%, the rate of growth it experienced in 2010. Turkey has become a critically important market for German business, while Germany is a crucial export destination for Turkey – and the bond between the two countries is strengthening. According to the International Monetary Fund (IMF) with Turkey's growth at over 8%, its output will surpass its pre-crisis level by a comfortable margin, one of the few countries in Europe to achieve this milestone.

Turkey already ranks 6th among European nations based on size of economy, after Germany, UK, France, Italy and Spain.*

As its economy grows, the wealth generated will have a positive impact on the Turkish property market. 

Property in Istanbul, apartments in Istanbul

There is also increasing interest among investors in Istanbul, a city steeped in tradition and heritage dating from the Ottoman Empire (when it was Constantinople). It has attracted visitors interested in history and culture through the ages, as it occupies a unique spot, where East meets West, where Europe meets Asia, divided only by the Bosphorous river. 

From a property perspective Turkey is an exciting market to consider in 2011/12. In Istanbul, yields can be as high as 7%-10%. The Eastern, or Asian side of the city is more business and residential in nature whereas the West, or European side is more touristic and business oriented.

McKinsey, the Global Management Consultancy, in its report on economically powerful cities, includes Istanbul in the top 25 city rankings for 2025 on a number of dimensions: as a city whose average, annual, household income will be over $20,000, whose population will be youthful (a high proportion below 15 years of age) and with a sizeable population (over 10m, which it already is).

This means that Istanbul would rank better than Rio de Janeiro and be hot on the heels of Moscow, in terms of numbers of households with attractive earning power and indirectly have greater levels of disposable income

It is not only McKinsey which rates Istanbul as a city of tomorrow, but Goldman Sachs, who see it as a €6 trillion economy by 2050, which would give it a number 3 ranking in Europe, behind only Russia and the UK.

Price Waterhouse Coopers-in their Emerging Trends Real Estate Report- consider there is a housing shortfall of 250,000 units per annum in Istanbul. Demand on the property market is significant, given the fact that 15 million already reside in a city which does not have the existing stock of property to cater for its growth.

Istanbul property, the transport system is improving

The Asian side of Istanbul, home of Sabina Gökçen Airport, is currently seeing a new metro (M4) being constructed with 19 stations from Kadikoy to Kaynarca and will also extend to the airport. The Marmaray Tunnel (a rail tunnel under the Bosphorous) is being built to connect Asian and European-side metro stations and is shortly to enter service, with latest estimates at 2012. This will undoubtedly have a positive impact on the property prices in thise area. 

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Map Courtesy of Wikipedia, * Eurostat 2010