THE PROPERTY MARKET

While many people may look at Turkey as a new and emerging market, in truth it isn’t. Boasting Europe’s largest population and with a heritage stretching back for 2,000 years, economically Turkey has a strong and proud tradition, with decline only experienced between the 1700s and 1980s. A re-emerging market, the entrepreneurial talents of the educated population, as well as political deregulation, has translated into a strong economy, tourist industry and property market.

Turkey’s negotiations with the EU are also helping to prop up the property market. Talks have been going on for decades, and even though it is not guaranteed that EU accession will take place in 2015, the fact that talks are occurring and reforms are moving the country along the path to modernisation means that the tourist industry, economy and property market are benefiting.

Turkey is a secular Muslim state, and while there have been concerns over terrorism and links to Islamic extremism, especially in an age when, sadly, extremism and terrorist threats are all around us, many people have discounted such worries. What’s more, it has been proven that recovery rates between incidents of terrorism and economic recovery are getting shorter.

Investment potential is excellent in Turkey. Obviously it depends on where you buy but in general, across the country, capital growth has been averaging 21% per annum for the last couple of years. Thanks to economic and population growth, demand has been sustained from the local market, especially in areas such as Istanbul. Similarly, there have been reports that 95% of housing in Turkey needs to be renovated or is situated in run down areas, meaning there is massive demand from the increasingly affluent population for better quality housing.

While the market has been hampered by a lack of low cost flights to the southwest, there are some cheap flights, although the lack of frequency can damage the rental yields you can expect in Turkey. However, as with Croatia this has resulted in a more discerning and higher-spending tourist, which in turn can help to stimulate capital growth. The market is further set to grow as there are all kinds of properties for all kinds of buyers, meaning there is no sign of a wane in demand.

Where to buy

Prices are far lower than in Western Europe’s more established markets, and in some areas you can buy a three-bedroomed villa for less than £125,000. However, in other regions, prices are much higher due to greater demand from foreign buyers. If you are able or willing to look within half an hour of the major resort hotspots, you are more than likely to find a bargain that you can buy for below the average market price.

Bodrum and Fethiye

The major tourist areas, these two towns are experiencing the highest levels of growth, and as Turkey’s most exclusive resorts, property is generally low density, low rise and newly-built. Prices vary from between €2,500 to €4,000 per square metre, with appreciation rates averaging 20–30% over the last two years, and the average predicted capital growth per annum predicted to be 10% over the next ten years. Newly-built apartments in a Bodrum development costing £50,000–£60,000 two years ago are now worth £79,000, showing growth of 20–25%. Thanks to Bodrum’s international airport it is now easier to get to the Aegean coast and this has helped to develop demand. For a basic, three-bedroomed apartment in a modern development in nearby Altinkum or Alanya prices are lower, starting from as little as £35,000. Of course, for a property with sea views or facilities such as a swimming pool, you should expect to pay more.

Istanbul

Istanbul is seen as one of Turkey’s most thriving destinations, and thanks to the estimated 700,000 people who are believed to be emigrating there each year, demand for property is high. With the population booming and urbanisation well under way, property supply is low, helping to push prices up. With lifestyle changes also established, resulting in a decrease in the number of inhabitants per household, the limited amount of quality housing is leading to price hikes and buy-to-let opportunities are huge.

Numerous budget flights arrive in the capital and so accessibility isn’t a problem, and this is having a positive knock-on effect on the surrounding area. Couple this with the cultural and historic attractions of the city, and the fact that Istanbul is the economic heartland of Turkey, and you are looking at a stable and appealing investment.

Mediterranean coastline

Areas such as Antalaya, Belek and Side offer better value for money than areas further north around the Bodrum Peninsula, and are more frequented by German and Scandinavian buyers. The population in this area has reportedly risen by 400% in the last 20 years, with prices rising by 25% in recent years. With 11 golf courses in the area, buy-to-let investors can seek to secure year-round interest from the golf market.

Areas such as Kalkan and Kaş are small, but have seen rapid development in recent times. Prices have risen by roughly 12–15% in the last year. With a lack of space for development due to strict zoning regulations, there is a shortage of homes here, despite continued interest.

What to buy

Newly-built property is the most popular choice in Turkey, especially since so much of Turkish resale property is in need of massive renovation – and this can be a minefield of red tape. Most demand tends to be for off-plan property, and this is likely to rent better and appreciate at a greater rate. Apartments and villas are the favoured property type, and along the southern coast – the most popular area with foreign buyers – older properties are fairly non-existent. Buying an older property is always more complicated and takes longer as it’s usually owned by several family members and you’re required to secure permission from all of them before you can purchase.