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Turkish property on course for rapid growth

Monday 29th February 2016

Written by Roy Weatherby, The Overseas Investor

Property experts are predicting that Turkey's property market will continue to grow and is in for a strong 2016, especially when it comes to international investment. 
TurkStat, the country's official data office, reports that overseas buyers invested in 22,830 residential properties in Turkey between January and November last year, and many forecasters believe that sales this year will be even higher.
Forecasts from the likes of the Istanbul Constructors Association and the Association of Real Investment Companies in Turkey (GYODER) suggest that Turkey's foreign property investment market could see growth in the region of 5-6% over the course of 2016, growing to a total value of around US$5.5 billion. 
The strong position and continued growth of Turkey's foreign housing market is partly down to depreciation of the Turkish lira, experts say, which has significantly increased the purchasing power of many foreign currencies in Turkey, including the pound and the US dollar.
UK buyers are the most prominent group of foreign investors in Turkish property by numbers alone. Over the first nine months of last year, 4,251 Britons purchased properties in Turkey, placing them ahead of any other nation.
In terms of total floor space purchased, it is Saudi Arabians who take the top spot. Between 2014 and 2015, the amount of total property area in Saudi ownership doubled to a total of roughly 1,240,000 square metres. Other nations with a prominent buyer presence in the Turkish property market include Germany and Kuwait. 
Prices in Turkey's residential market are rising, and this is perhaps partly down to continued high levels of interest from foreign investors. In the third quarter of 2015, prices were an average 18.9% higher than they had been in the same quarter of 2014. 
This compares to a global average growth rate of 2.7%. The strongest levels of growth – exceeding 20% in some cases – were in major cities, most notably Istanbul, and popular tourist areas. Areas in the West of the country, close to the Greek and Bulgarian borders, also displayed strong growth in prices.
However, there are cautions and caveats to be borne in mind regarding the Turkish property market. The country's government is currently facing an uphill struggle to reduce unemployment. 
Despite the property market's continued popularity with foreign investors from nations such as the UK and Saudi Arabia, total foreign capital flowing into the country was significantly lower last year than the year before. Furthermore, while the Western half of the country performed well last year, some real estate experts in the country believe things may shift more towards the East this year.
Nonetheless, growth in Turkey's property sector, and in the activity of foreign investors in that sector, are confidently predicted by many experts and Knight Franks most recent global house prices index rated Turkey highly. Despite contending with some level of adversity and a possible shift in focus, it seems like the market is on course for a strong year.
For more information about property investment in Turkey, please contact Hopwood House.

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