Posted on 24 May 2012
Marketwatch has just ran a story profiling Turkey and Poland as Europe’s two investment beacons for the next few years; suggesting that investors get in now if they want to get in early. Of course, this is not a new position for Turkey, as the country has been named one of the world’s top emerging market prospects by those who coined the CIVETS (Columbia, Indonesia, Vietnam, Ecuador, Turkey and South Africa) and MINT (Mexico, Indonesia, Nigeria and Turkey)groupings of hot emerging markets set to take over from the BRIC economies. The T in both groupings stands for Turkey.
But the Marketwatch article fell short where almost all of them do, in suggesting ways to invest in these hottest-ever-markets. Marketwatch is one of Wall Street’s biggest digital publication, so it is focussed on investment in things like exchange traded funds and such like. As it rightly states there are very few such funds focussing on these markets, even fewer of them focussing on Turkey or Poland individually, although more for Poland than Turkey.
As it also rightly states, investing directly in these countries should be left to those with knowledge of the markets. Thank fully, we are property investors, so we are not limited to the investments being made by other people (fund managers etc) and what they see as a worthy investment, we can invest directly in any country that will allow us to buy property, and both Turkey and Poland will let us do so.
But when it comes to investing in Turkish property, it shouldn’t be considered a good idea just because it is an accessible avenue, but because it is a very good prospect indeed. Marketwatch quotes many experts on the strengths of Turkey, of which one of the main is its young population, with only 6.3 percent of about 75 million people aged 65 or older, and its central location.
“The engine of growth is the country’s position as a trading hub, stands at the crossroads of several important energy markets” as it borders Iran, Iraq and Azerbaijan, and has access to the Mediterranean Sea and the Black Sea.”
“International corporations increasingly prefer to use Turkey as a regional export hub because of its political stability and large domestic market,” said Martina Bozadzhieva, practice leader for Central and Eastern Europe at the Frontier Strategy Group.
Driven by the young population, Turkish exports soared in 2011 and continue to grow, the same goes for foreign direct investment and tourism. Turkey is growing into a regional business hub, a regional trading hub and one of the biggest tourism destinations in the world.
The population is growing, employment is growing and so is affluence. All these young people are growing up and looking for their own place, all pointing to incredible growth in demand for housing to buy and rent. So you can invest very profitably in residential buy to let properties.
But tourism is also growing massively. This opens up other investment opportunities, obviously holiday home investment, whereby we buy a holiday home and rent it out. But there is also hotel room investment, which usually comes with attractive guaranteed rental and buy back opportunities.
Whatever way you want to go, the time to buy in Turkey is now. According to Gyoder property prices grew by a further 0.84% in April and are now growing at an annualised rate of almost 12%, so while Turkish property prices are still low they are growing.