Property prices in Turkey are growing at the second highest rate of all major world economies, according to the latest House-Price Indicator by leading publication ‘The Economist’, which is encouraging news for investors in Turkish real estate.
The Indicator chart, published in April, showed that by the start of 2015 Turkey’s property market had notched up a 16 per cent average price rise compared to the same time last year, only 0.2 per cent behind Ireland in the top spot.
Immediately behind Turkey in third place was Hong Kong with 11.9 per cent growth, with the remainder of the top 10 comprising South Africa (9.7 per cent), Sweden (8.6 per cent), the UK (7.9 per cent), Brazil (7.4 per cent), India (7.1 per cent), Australia (7 per cent) and Canada (5.2 per cent).
According to The Economist, its Indicator tracks the health of housing in 26 markets around the world, encompassing a population of over three billion.
“Prices are now rising in 19 of these markets, at a median pace of 5.2 per cent a year,” said The Economist. “But in China, whose decade-long construction boom appears to be coming to an end, and in much of the periphery of the euro area, which is just starting to recover from an especially severe bust, prices are falling.”
For each country, the Indictor chart also showed where property prices are overvalued relative to rents. In Turkey, they are recorded as being 16 per cent overvalued and while this is not ideal it is comparatively low compared to other countries. In Ireland, price to rent overvaluation is recorded as 27 per cent, in Hong Kong is it 84 per cent, Sweden 41 per cent, the UK 47 per cent, Australia 61 per cent and Canada 89 per cent.
Data on The Economist website shows that property prices in Turkey saw the fifth highest rate of growth out of the 26 countries between Q4 2010 and Q4 2014, increasing by 19.9 per cent, and behind Hong Kong, Singapore, Israel and Brazil.
Elsewhere, Turkey’s market received another boost in April with the announcement that the Saudi Arabian Al-Bassam Group will set up a new fund investing in Turkish real estate worth two billion liras ($751.17 million). CEO Ziad al Bassam confirmed to Reuters: “We are aiming to work with state companies such as TOKI, Emlak Konut and Kiptas.”
Meanwhile, Turkey’s property market stole the limelight at the recent MIPIM exhibition in France, one of the highlights of the international property industry’s calendar. The country’s presence there was led by the Istanbul Chamber of Commerce (ICoC), which now has 375,000 member companies, with 60,000 of these operating in construction and real estate.
The focus of their stand, and one of the highlights of this year’s show, was a 96-square-metre model of Istanbul. Launching the model, Ibrahim Caglar, president of the ICoC, said: “It was created especially for MIPIM and is designed to showcase some of the city’s monumental construction projects currently underway. These include Kanal Istanbul, Istanbul’s Third Airport, The Third Bridge joining Asia and Europe, the Marmaray undersea rail tunnel, the Eurasia Tunnel and the Istanbul International Finance Centre.”