Still dreaming of your very own place in the sun with a great view of a fabulous beach? Can’t afford Spanish prices any more? Then Turkey could very well be the market for you.
This is probably not major news to you. After all, Turkey has been coming up fast over the past half decade, first as a major holiday destination, and secondly as a place for buying property. It’s easy to see why as prices in the traditional Mediterranean destinations such as Spain, Cyprus and Greece have been increasing rapidly.
Compared to these destinations, Turkey is still remarkably cheap, although such has been the interest in the most popular Turkish resorts such as Bodrum and Izmir that prices there are no longer bargain basement any more.
|But even buyers with the most limited of resources should not believe that they have missed out on opportunities in Turkey as there are still plenty of bargains to be had. The thing is that Turkey is a big country with a lot of coastline – nearly 4500 miles of it. A lot more coastline than Spain – as much as the rest of Eastern Europe put together. So even if developments around the major tourist hotspots are out of your price range, there is sure to be somewhere up and coming that is still affordable.|
Such is the lure of the Mediterranean that all of the action is on Turkey’s southern coast at the moment. But look at the map. Turkey also has 1000 miles of coastline on the Black Sea. Just a little to the north of Turkey, everyone has been getting crazy about the Bulgarian Black Sea coast even though there’s only 100 miles of it. So why is hardly anyone talking about Turkey’s Black Sea Coast?
The main reason is that there is not so much tourist infrastructure there at the moment. But it is sure to come in time. It might be a long-term bet, but if you’re looking for beachfront property at still rock bottom prices, this is for you.
But in the short and medium terms, the Mediterranean coast is where the action’s at. There is still plenty of undeveloped coastline left for there still to be plenty to choose from. Here the tourist infrastructure is developing fast in order to cope with ever-increasing numbers of tourists. Although Turkey is a fair haul from the UK and Ireland compared to Spain, Turkey is becoming probably the leading holiday destination for Eastern Europeans as prices in Turkey are still affordable and the distances are not that great at all.
So all is looking pretty good for Turkey’s prospects – at least from a medium and long-term perspective. It should be remembered, however, that, although Turkey is desperately trying to join in with Europe, it is still a Muslim country which makes the market a little more risky than in mainland Europe, with terrorist bombing occurring from time to time. Turkey is also in an earthquake zone. For these reasons, the country probably has slightly higher risks associated with it than would be the case in most of the EU member countries.
Up until recently, it was not possible to get a mortgage from a Turkish lender. New legislation has recently been passed, however, and now mortgages are starting to become available to foreign buyers through Turkish banks. As the Turkish mortgage business is still in its infancy, however, you will probably need the assistance of a local broker to help you through the application process. Probably an easier option is to arrange your financing from your home country. Due to the country’s popularity with buyers, there are many UK lending institutions that are willing to provide loans for property in Turkey.
The Turkish capital of Ankara, although massive by Eastern European standards with a population of 3.3 million is probably not going to be terribly interesting to foreign buyers, but Istanbul could be. By any standards, Istanbul is a massive city – larger than London or Moscow even with a population of 12.5 million including all of Istanbul's suburbs, making it more populous than most of the countries that we cover on Propertastic!, let alone the other cities. This makes is especially difficult to compare Istanbul alongside most of the other major cities we cover on this site. At the top end of the market, the price of EUR2500/m2 is already pretty high, but there are also poorer areas where prices are a lot lower.
Althhough Istanbul isn't currently seeing the same level as growth as some of Turkey's resort locations, the city is probably a safer long-term bet than the coast. Capital cities always have an advantage over resort locations in that there is a market for long-term rentals to ex-pat workers and rich locals as well as to the tourist market. Istanbul is contantly increasing in importance - both as a tourist destination and as a regional centre of commerce, so the long-term potential for Istanbul is definitely there, especially if Turkey ever looks likely to join the EU, although this is something that certainly isn’t going to be happening any time soon.
Knight Frank were pretty confident about Turkey, predicting a very impressive 12.5% growth in 2007. This looks to be a fairly realistic projection for the year as a whole. In the late spring/early summer, there was a bit of a dip in the Turkish market. Interest rates went up, the new mortgage laws were not as good as people expected them to be and there was a lot of uncertainly in the country in the run-up to the election on July 22. The result of this nervousness is that prices dropped in Turkey in May, the worst being Izmir, which saw a fall in prices of 6.3%. Ouch. Prices in Istanbul fell by 1.3%
However, the result of the election was a positive one, with the pro-Western government being re-elected and the falls in property prices were quickly reversed over a period of just a few weeks, with the result that the Turkish market is booming once again.
The property market in Alanya, one of the most popular destinations for foreigners buying in Turkey was given a major boost in September when it was announced that the town is going to get a new airport which is scheduled for completion in 2009. As Alanya is currently served by Antalya airport which is two hours' drive away, this should lead to a rapid increase in property prices in the region.
The Sunday Mirror recently published an article suggesting that 'Turkey is the new Spain'. This isn't a bad analogy. It's not a brand new market any more and so you will have to do a bit of research in order to discover the up-and-coming areas if you are looking for fast capital growth. However, with tourist numbers constantly rising and the long-term economic outlook for Turkey being highly positive, you can expect good medium and long-term growth in the country no matter where you buy. Spain saw more than a decade of growth before prices started to stabilize. Turkey should follow a similar pattern and so it's going to be a long time into the future before anyone needs to start worrying about the market becoming over-saturated.
Additional Background Information
The above contains our thoughts on the current state of the market. But, like any type of investment, there are no guarantees as prices are always influenced by a huge number of different variables.
You can keep abreast of developments in the market by checking out the articles in our News section where we’ve trawled the Internet for every story connected with property in Turkey so you don’t have to. By checking the news reports regularly and thinking through the consequences of each piece of news, you should be able to get a good idea as to how quickly or slowly property prices in the market are going to rise in the near future.
The information in this section only tells half the story, however as only a small proportion of Turkish property news is translated in English, which means that the locals are getting a lot more useful information than foreigners are.
Investing in the wrong markets could make the difference between making tens of thousands and losing tens of thousands over the next few years. If you’re seriously considering investing in Turkey, then you should think of subscribing to our Premium Service so that you can get all the breaking news from the market at the same time the Turks are hearing it.
Click here now to get better informed.