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Investors turn to Turkey
By Tanya Powley
Turkey is becoming increasingly popular with British property investors due to attractive gross rental yields and low property prices, property experts say.
Rental yields of 5.48 per cent in Turkey are higher than in many other traditional European second home destinations, according to Global Property Guide – which this month recommended the country as the best place to invest in Europe.
In contrast, traditional second - home destinations such as France, Spain and Portugal have lower yields at 3.85 per cent, 3.81 per cent and 3.63 per cent, respectively.
Stuart Johnson of Experience International (EI), the overseas property firm, says there has been strong appetite from investors interested in buying property in Turkey this year, especially for properties in Istanbul.
“Investors can buy a one-bedroom apartment in Istanbul off plan from around £40,000 or a completed new-build apartment from £75,000 – property remains cheap in Turkey,” he says.
EI is currently marketing a Turkish property development in Beylikduzu, on the European side of Istanbul. There is a choice of 1, 2 and 3-bedroom luxury apartments from just £41,000 with a two - year protected rental guarantee of 7.5 per cent.
Mortgage brokers are also seeing an interest in Turkish property. Conti, which specialises in overseas mortgages, has reported a steady increase in requests for quotes for Turkish properties in the past year. Turkey is the third most popular location, behind France and Spain, based on mortgage quotes issued by the mortgage broker so far this year. In May, the number of quotes for Turkey was double that of the previous month.
“Many say that 2009 was Turkey’s year, but the signs suggest that 2010 could be even better,” says Clare Nessling, operations director at Conti. “Because it’s outside the eurozone, it has been attracting an increasing number of holidaymakers who are looking for value.”
Simon Smallwood of International Private Finance says: “The Turkish property market became popular fairly late in the last property cycle and, as a result, didn’t see some of the huge over - development seen in markets like Spain. Hopefully, this will ensure it performs robustly during these difficult times.”
According to Global Property Guide, Turkey is attractive due to low prices per square metre, cheap round-trip costs and a relatively attractive tax regime. Also, Turkish properties owned for more than five years are exempt from local capital gains tax.
Turkey has emerged as a key property investment destination for 2012, as it avoids becoming wrapped up in the problems of the eurozone.
According to the latest REIDIN.com - GYODER New Home Price Index, prices of property for sale in Turkey sat 9.54 per cent higher in November 2011 than a year earlier.
A month - on - month increase of 1.41 per cent was recorded from October.
These figures stand in comparison with an overall annual decrease of 1.9 per cent in November for property in the UK, according to Land Registry figures.
Tim Morgan, partner at Emerging Real Estate, said tourism is behind the "boom" in Turkish property.
A shortage of housing in Istanbul is in particular making for a "very profitable" investment for those looking to purchase buy to let property in the country.
"With the eurozone in crisis it seems Turkeys appeal will remain undiminished for at least another year or so – until neighbouring countries begin to compete again," he concluded.
January 2012
Turkeys property market offers promising investment opportunities
Investors targeting property for sale in Turkey are likely to be impressed by returns, according to Assetz, which has highlighted the countrys sound banking policies and rental demand.
Where neighbouring eurozone countries are proving a no-go for investors due to ongoing economic volitility, Turkey has bucked the regional trend with an average 4.3 per cent annual increase in GDP over the last seven years.
The property investment firm notes that the property investment in Turkey is both transparent and straightforward, while its strong economy underlines its stability.
Assetz chief executive Stuart Law pointed to Turkeys separation from the tumultuous euro currency as a major strength, while the growing tourism industry will also stand in investors favour.
"There is a high demand for good quality rented housing in Istanbul and surrounding areas, where the population is growing rapidly and there is a severe shortage of housing," he added.
In May, the Organisation of Economic Cooperation and Development forecast that growth in Turkey will slow to 5.3 per cent in 2012, in response to tightening credit conditions.
This represents substantially better prospects than other countries, where continued economic problems across the continent continue to affect key performance indicators and the property market.
October 2011
