8 July 2012
Property in Turkey an asset
Property investors have named Turkey as one of the real estate markets to watch out for. Tim Morgan, Emerging Real Estate’s director stated that property in the country holds a lot of potential as Turkey is in a good economic situation. The country is also seeing a lot of demand from the international and local markets.
According to Morgan, interested buyers should take time to consider whether a property is suitable for their requirements, before they make an investment. He believes that if a customer gets a fair deal, property will be an asset. One of the factors that buyers should look for, to ensure that the deal they make is right for them, is how much they have to spend to buy.
Ideally, a buyer should spend 20% less than the standard purchase price that non-investment buyers get. Buyers should also look at the price trends in the rental market in the area that interests them. REIDIN, a company which provides details on the rental market in Turkey, published a report recently stating that a few areas have experienced tremendous growth in rentals year-on-year.
Some of the areas are Istanbul, Izmir and Antalya, which have seen 10.84%, 12.42% and 12.79% growth. Compared to the average rental increase in Turkey, which was approximately 9.5%, growth in other areas has been quite significant.
– The economy in Turkey is growing quite steadily. In 2010, growth of 8.2% was recorded, and in 2011, it was 6.6%.
– Unemployment data indicates that there has been a consistent drop in the percentage of people without jobs in Turkey. In 2009 it was 14.1%, which fell to 12% in 2011 and further to 10% last year.
– According to the Central Bank, the banking sector is strong and stable. Mortgage lending went up by 20%, to 25% between 2010 and 2011. This gave Turkey an edge as it could make its place among the strong contenders. This was mainly owing to its Basel III reform which helped increase capital reserves which are mandatorily placed against property. It has also allowed Turkish banks to lend to property buyers, while a few other European countries are forced to stop lending.
– Turkey is one of the few countries that enjoy fiscal stability. After allowing the standby agreement it had with the IMF lapse in 2009, the country took all necessary measures to ensure that it pays off its debts by 2013. Public debt is close to 40% of Turkey’s GDP. This is just half of the EU average; and 20% less than the Maastricht Criteria. The budget deficit is approximately 2% of the GDP. Put together, all the factors make Turkey one of the fiscally stable European countries.
Development of infrastructure
AK Party spent billions of dollars pounds and Lira to ensure that Turkey’s infrastructure meets international standards. The program will be taken up a few more notches in the coming years, as Istanbul is in the running for the Olympics in 2020. In the recent years, Turkey’s marinas and roads got an uplift.
Written by Les Calvert