Why invest in property in Turkey
Turkey, officially known as the Republic of Turkey, is a transcontinental country located between Asia and Europe. It has its capital city at Ankara whilst the largest city is Istanbul. With a population of approximately 76 million as at 2012, consisting of mainly young & upwardly mobile population, makes it an ideal country for investors who want to plough money in the country’s fast developing real estate industry.
Turkey covers a very large area of about 783,562.38 km² which again means there is a lot of potential for development. In the last decade, the Turkish real estate sector has grown tremendously. While there has been a general decline in the real estate business in Europe, Americas and many parts of the world due to the recent economic meltdown, Knight Frank figures show the real estate sector in Turkey grew by 18.4% in 2014-2015.
Istanbul has been touted by PWC and Deloitte Consulting to be the most attractive city for real estate investment in Europe while Turkey overall is ranked 3rd most lucrative country for investment in real estate globally. The increase and appetite for foreign investors in real estate has been motivated by the potential of Turkey’s EU membership. This has accelerated holiday home owners and investors around the world to purchase properties in Turkey. More important is also the legislative amendments that have been done to several laws including the property title registry law, the mortgage law, residency and the redrafting of tax laws which all directly affect how overseas investors can buy and develop properties in Turkey. These amendments are believed to have stimulated the competitiveness of the Turkish real estate sector.
Dynamic demographic factors and good economic figures have enabled Turkey to increasingly become the choice for foreign investors interested in setting up businesses and purchasing real estate. There has been an increase in demand for homes and offices in the recent years as more global companies and foreigners demand commercial and residential real estate.
With a stable economy and predictable inflation rates, investor confidence in the real estate sector has tremendously increased. Turkey has internationalised and institutionalised the sector while it has also put in place transparency and high quality standards in property transactions in anticipation of joining the EU. According to Euromoney’s Country Risk (ECR) Survey, in 2012 Turkey outperformed 8 out of the 27 EU member countries and the ECR score gap narrowed from 48 points in 2002 to 8 points 2012.
With a GDP of USD 822 billion in 2013 60% of the population under 40 years old, Turkey has become a major target for foreign direct investment.
Banks and mortgage firms have also increased lending, with over 68 billion being disbursed in the year 2011. Turkey also attracted one of the highest numbers of tourists in 2015, with almost 30 million tourists, making the country the sixth most popular destination on the planet. The high number of tourists indicates the high potential that Turkey has in the holiday home purchase and rentals segments. This is attributed to the fact all these tourists will need somewhere to stay whether homes or hotels.
Turkey is an economic regional hub providing ultra modern shopping centres, and easy access to over 1.5 billion people who come for trade and other services in the country. This has increased the demand for infrastructure and facilities in the country.