It is not surprising that private property inTurkish cities is considered a wonderful opportunity in “Emerging Trends in Real Estate: Europe 2006”, report presented by the Urban Land Institute.
Turkey IS INCLUDED INTO the list of 20 most inhabited countries in the world, with the yearly population increase in 2% which is much more than the average figures. According to recent research, fast urbanization of the prevailing young population will create a serious crisis in Turkey highlighting the demand for more than 5 million new buildings by 2010. This situation and limited resources will continue to increase prices in the main cities in the nearest future.
Property funds, based in Europe, and also Gulf keep pouring money in the country. The most serious investor is Dubai. The leading project – twin-towers (a pair of twisted sky scrapers) with the total cost of $500 million were built in Istanbul by holding companies from Dubai. The city also has a new IKEA, Harvey Nichols shop and Easy-jet budget airlines with daily flights from Great Britain to Istanbul at a price starting from not more than 30£ in quiet months.
The property market inTurkey is lagging behind Europe and the difficulty in getting mortgages meant that the prices remained artificially low. However with the opening up of the mortgage market the situation will change. And not only the situation with mortgages which will have a long-term influence on the market, but also the fact that Turkey is getting richer and property prices will rise together with the growth of the country. Turkish economy has grown 9.9 % in 2004 only, the highest registered growth in that year within OECD (The Organization for Economic Co-operation and Development) of the country. In 2005 the growth was even higher and accounted for about 7.4 %, and by the third quarter of 2006 GDP made up 5.9 %.
- The government is encouraging investments.
- Property prices are increasing.
- The highest registered economic growth in 2004.
Average income from property is quite high in Turkey. Income in Istanbul makes up from 6 % to 7.6 %, while property located close to the sea brings approximately from 13 % to 16 %. Income in coastal zone is seasonable, although rent is much higher there in the summer period which lasts 4-6 months. Income from property on the outskirts can be more attractive in Ankara (12% of income) and in Istanbul (6.5 % äî 8.5 %). Income depends on the size of property; however a house in the outskirts is usually cheaper than a napartment in the center of the city.