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Turkish Property Boom | Buying Growth

Turkish Property Boom

For a country, like Turkey, that attracts over 25 million visitors every year, the surging demand for property investment is no surprise.

Consider this and all your apprehensions about Turkey, as an ideal real estate investment destination will be allayed. Stunning beaches, perfect climate with more hours of sunshine than UK, pristine beaches enriched by the waters from the Mediterranean and Aegean seas, remnants of early civilizations, low cost of living, expansive infrastructure with more than 70 million people, sports-friendly destinations, cheap air travel, and above all, a moderate Muslim country. What else you need for the property market to grow and reach its full potential?

Property Boom in Turkey

As stated earlier, the full-scale growth of real estate market in Turkey is hardly surprisingly. But what’s surprising is the level of desire the successive governments of Turkey have shown in order to make the property market of the country the most sought after in Europe. With one of the large populations in Europe, Turkey already had strong domestic real estate fundamentals, which meant that the country never relied on foreign investors to push up the performance of the real estate sector of the economy.

However, a slew of measures taken by the successive Turkish governments in the recent past have ensured that the foreign investors are not only welcome in the real estate market, but they are also encouraged.

So, what’s the immediate trigger for Turkish property boom? It happened way back in late 2002, but its effects are fructifying now and the property market – international as well as domestic – in the country is well into an overdrive. The trigger was an important change in the law that governs the ownership of property by foreigners in Turkey.

The trend was furthered by the relaxation of mortgage laws in the country, which meant that more and more people could now afford to buy property in Turkey. Actually, the change in critical land laws was hastened by the Turkish desire to join EU as soon as possible. While it’s still a candidate country, talks are on to ease its entry into the EU.

This obviated a surge in domestic demand for real estate pie in the country, and in turn, international investors also sensed the opportunity to make a killing in the Turkish market. The average Turkish, who normally either rents out or purchases by paying outrightly, is now demanding his own place in the sun – in the form of “Available on easy instalments - a nice home for you and your family!!” The banks that were reluctant to give long-term loans, and normally charged hefty rates of interest, are now offering multiple easy repayment plans, to be paid back within 10-40 years, akin to the US mortgage market. To the Turkish people, it’s not much more than the monthly rent they are paying now!

Such a trend is being seen across the board in every real estate sector. Be it residential, commercial, or industrial property, the reduced mortgage interest rates have meant that property market is at an all-time high in Turkey.

The cheaper air travel between European nations has also contributed handsomely in pushing up the demand for Turkish property in the international market. Who wouldn’t like easy and cheap accessibility to the location of their property?

The government, on its part, has invested heavily in improving and developing the infrastructure in the country. Roads, railways, air and sea travels have undergone remarkable transformation to usher in the property boom in the country.

Not to mention the role of other arms of Turkish economy, which has been robust of late, in acting as a catalyst in developing real estate market in the country. For instance, inflation in the country has shown a tremendous drip – down from 90% about 5-6 years ago to 8% at the current levels.

Impact of Turkish Property on the Demographics

The booming international demand for property in Turkey has a profound impact on the demography of some regions of the country. Most affected are the coastal areas, from Alanya to Canakkale. Spacious villas in the region are available from £50K onwards, and with about £100K, you can land an exclusive mansion in the charming Turkish coast. This resulted in a surge of investors from countries, like Germany, Britain, Ireland, Greece, and Spain in the region.

Take, for instance, the town of Alanya alone has some 9,000 foreign residents, mostly from Germany. The large population of Britons in the towns of Kas and Kalkan is largely responsible for the place being called “Little England”. Greeks also form one of the largest migrant communities in the country.

Though, this change in demographics have had some impact on the more-orthodox Turkish people, yet in the larger context, this transition is welcomed by average Turkish resident.

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