The Turkish real estate market continues to flourish as a result of many positive factors coming together.
Turkey has one of the fastest growing economies in the world, is strategically located on the intersection between Europe and Middle East and has a warm and friendly climate that tourists absolutely love. The country’s beautiful geography has also made it a rich melting point of exciting cultures.
But there are a host of other reasons behind the rapid growth of real estate and why foreign investors have a special interest in the country. Infrastructures, economy and social growth has been on a steady incline in recent years with a growing population, increasing income per capita, new mega and other urban renew projects, increased international flight in and out of Turkey, and an ever booming tourism industry.
In 2015, Turkey recorded the highest growth in the world in house prices index, peaking at 26% in Istanbul, 12% in the capital Ankara, and 16% in Izmir. Newly built homes also followed the same growth pattern, increasing by 17.4%. And the years 2016 and 2017 have been no exception, according to statistics from the Central Bank of the Republic of Turkey (CBRT).
How Can Foreign Investors Be a Part of Boom in Turkey Real Estate Market?
The real estate and construction sector make up about 6% of the country’s GDP, and is projected to hit 10% by 2025. In 2015 also, the country’s FDI index was pegged at a total figure of $16.5 billion, with foreign investment in real estate accounting for $4.1 billion of the sum.
In the previous year, FDI in property hit $4.3 billion (which is a significant rise from the $2.6bn and $3bn recorded in 2012 and 2013 respectively).
That figure also meant that foreign buyers accounted for 15% of property sales, with European citizens — and not Arabic nationals, as most people believe — topping the list.
Notably, having sufficiently invested in their own countries, most Europeans wish to spread out to foreign countries with good investment indices and Turkey ranks high on nearly all considerations.
In addition to the geographical and economic attraction of Turkey, other factors that pull European investors to the Turkish property market are the favourable government policies that make business and living as an expatriate easy and profitable.
These include the reversal of the ‘reciprocity’ law from property in 2012, which makes the property market an open season for all who wish to visit. Previously, foreign nationals could only buy Turkish property if Turkish nationals enjoyed the same privilege in the expat’s country.
Government has also given an extra boost to foreign investors with its residential pass policy, which gives them an automatic one-year residency permit if they remained in Turkey for three months on investment business. This allows investors to fully explore other viable investment opportunities in the country.
That is why foreign investors need to consult with top property companies that specialise in the Turkish market and who know the region and the procedure such as Spot Blue. For example, the interest rates, legal procedures and buying of real estate in most countries vary. Whereas the annual interest rates in Europe are around 4%, in Turkey they are around 12%.