Posted on 26 November 2008
In these times, it is challenging to identify good property investments. After more than a decade of price appreciation, most property markets suffer from oversupply, high prices and the effect of rising interest rates. Hence Turkey stands out.
Residential prices in Turkey rose after relaxation of foreign ownership restrictions in 2005. Buyers (mainly Britons, Germans and Greeks) poured $10.4 billion (Dh38.17 billion) into the property market in 2002 to 2007 and prices increased at 7% annually over the past five years.
Why the boom? Turkey is picking up as a popular tourist destination and it received 27 million tourists in 2008, from 25 million in 2007, a 10% increase. Beautiful sandy beaches, warm weather and rich history are key attractions. Turkey has some of the best coastline in Europe, especially in the country’s southwestern corner where the Mediterranean and Aegean Seas meet and is also excellent for golf, diving, mountaineering (mainly in Anatolia), rafting and skydiving. The country has developed world class resorts that are popular with Europeans. As a result, demand for short-term accommodation in popular resorts such as Marmaris, Fethiye, Dalyan, Kalkan, Altinkum, Bodrum, Belek and Alanya has jumped.
Another driver is access – citizens of countries, that allow Turks to own property in their country, can acquire property in Turkey. Citizens of most EU countries, the US, Canada and some countries in Asia, Latin America and Africa can freely purchase properties in Turkey.
Also, the cost of living is a fraction of that in most developed countries. Plus serious crime is low in Turkey. The location of Turkey, within a few hours flying time from most European and Middle Eastern countries is another draw.
Economic growth has also helped with the GDP expanding at an average of 7.2 per cent in 2002-2006 and GDP per capita rising from $3,560 in 2002 to $9,630 in 2007. Unemployment and the budget deficit dropped and the perennial runaway inflation was finally brought down.
But the best part is that Turkey has some of the cheapest property prices in Europe at Dh526 per square foot of prime city centre property as compared with UK (Dh8,375), France (Dh4,100), Greece (Dh2,653), Spain (Dh1,900), Portugal (Dh976) and even Croatia (Dh1,085) and Ukraine (Dh1,226).