Overseas investors might be wise to cast their eyes on Turkey in 2016 as the demand for property surges. A leading property organisation in the country is forecasting six per cent growth in foreign property demand; as a result, prices are likely to gain, making it important to buy as early as possible.
New data for the first 11 months of 2015 revealed that 22,830 homes were sold to foreign buyers, with the Istanbul Constructors Association and TurkStat believing that the total investment from foreigners could total $5.5bn (£3.8bn) when all the figures are in. Meanwhile, predictions by the Association of Real Estate Investment Companies in Turkey (GYODER) suggest growth of between five and six per cent for the coming year.
Many investors hail from countries such as the UK, Germany, Saudi Arabia and Kuwait. When the scale of investment is broken down into the number of square metres, Saudi Arabians lead the chart, doubling the total area of inventory they own between 2014 and 2015 to 1.24 million square metres. The first nine months of 2015 saw those from Britain topping the chart for the most transactions, with buyers snapping up 4,251 properties. Russian activity, although popular in the past, has declined both in number and square metre area.
One of the reasons for the increased buying levels is that Turkish currency has declined over the past two months. The lira is weaker against both the British pound and American dollar, making property seem like a bargain for many investors.
It is also suggested that the increased foreign investment has been pushing prices up; in fact, the third quarter of 2015 saw an 18.9 per cent gain year-on-year for prices. This is a significant growth when compared with Knight Frank’s 2.7 per cent global average. The Central Bank of Turkey confirmed these values and said that January 2011 prices of 900 lira (£212) per square metre had risen to 1,800 lira (£424) per square metre by November 2015.
Unsurprisingly, there are regional discrepancies in house values; for example, growth of 20 per cent and more was recorded in notable tourist areas, such as along the Aegean region coastline between Izmir and Anamur. The south-western Mediterranean areas and Istanbul also saw strong gains, and there were increases of between 15 and 20 per cent on the Bulgarian and Greek borders. In terms of real estate development, construction firms predict positive investment in the future as the market adapts style and design to suit the foreign market.
Overall, property investment in Turkey continues to make strong gains. At the end of 2015, interest from the EU and US fell away. However, experts believe this slack will be picked up by those from the Middle East.
The chief executive officer of LMG Global Investment, Gökhan İlgar, believes that continued commercial project development will attract those from Arabia. Meanwhile, Gokhan Taş, the president of Coldwell Bank, said: ‘In 2016, we will break a record in the history of the Republic of Turkey as interest rates have fallen due to the confident and stable economic environment.’