Posted on 28 February 2013
Turkey is currently one of the strongest and most stable economies in the world. The property market is also performing well with strong and stable growth coming out in all the indices. So more than ever before property investors are sitting up and paying attention to Turkey.
Low property prices, growing employment, growing population, mass migration, rising tourism, booming automotive industry, booming airline industry its all go in Turkey.
While there is arguably more interest in Turkey in terms of coverage in the industry press, it is different as well. Before the crash most of the coverage went to Turkey’s coastal resorts and the impressive rental yields of holiday home investment as it did with everywhere else mentioned in the context of the great overseas property boom. But because so many of those holiday home hotspots let investors down no one wants to highlight holiday home investment anymore, it is all residential investments in the major cities.
But to focus only on that could be to miss out. In Turkey there is certainly a chance of this and this is shown in the latest report into Turkish air-traffic from Anna.Aero.
According to the report Turkish airport traffic has increased by 85% since 2007 (the height of the overseas property boom), with 130 million passengers going through Turkish airports last year. While booming Turkish and Pegasus airlines are put as being largely responsible for the boom, it is not as dominated by Istanbul as some would expect.
Don’t get me wrong, Istanbul’s two airports put in an incredibly strong representation of themselves. According to the report, Istanbul Ataturk received a staggering 45 of the 130 million passengers making it the top airport, but Antalya being Istanbul Sabiha Gocken for second with Antalya receiving 24.99 million compared to Sabiha Gocken’s 14.49. However, both the Istanbul airports saw double-digit growth, with Istanbul Ataturk traffic up 20.2% compared to 2011 and Istanbul Sabiha Gocken traffic up 13.6% compared to 2011, while traffic through Antalya airport was actually 0.5% less than 2011.
While the growth is impressive and Antalya could have done without a decline by comparison, the most important comparison for me is the number of passengers. Antalya is the third biggest city in Turkey behind Istanbul and Izmir, so it attracts investors as a residential buy to let prospect, but it is also one of Turkey’s top coastal tourist resorts. This means holiday lettings rental demand and residential rental demand. Investors thus have double the rental pool to target. As the Turkish economy develops it is highly likely that a domestic second-home market will flourish and the people now building a rat-race in cities like Antalya will want to buy a lovely beach home. This is certainly a consideration when looking at exit strategy.
Antalya is doing great in terms of air passenger traffic, but on top of that the other 3 airports in the top 6 (i.e. not counting Istanbul or Antalya) also have impressive figures and growth. Ankara and Izmir in 4th and 5th with 9.3 and 9.2 million passengers respectively last year, and growth of 9.5% and 8.4% respectively are doing very well indeed — Izmir is also a major city with a rising tourist market. Making up the 3 we have well known tourist hotspot Dalaman with 3.8 million a growth of 2.1% compared to 2011.
Just more reasons for investors to give Turkey some serious attention between now and 2020.