Growing tourism, a stable economy, and a healthy appetite for lending are all making Turkey a key investment location for British buyers this year. At Conti, we’ve certainly been seeing increased levels of interest in the country, which is currently fourth on our hot spots list.
The country boasts a healthy tourism industry, cheaper house prices and rising demand for rental properties, all of which have contributed to its popularity of late. It offers all the benefits of its Mediterranean location, minus the effects of the eurozone crisis, which has pushed some prospective investors to locations outside the traditional European property hot spots. And the easing of restrictions last year on non-Turkish nationals buying property there should stimulate the market further.
According to REIDIN.com, the real estate information company, more buyers from the UK than any other foreign nation own homes in Turkey. Of the 125,449 foreign nationals who own property there, 35,825 are from the UK, more than the 29,219 owners from Germany, and the 10,830 from Greece.
The annual survey of Association of Foreign Investors in Real Estate (AFIRE) members actually puts the country in third place in a list of emerging markets being considered by potential investors in 2013, up from seventh place last year. And it now ranks fourth in the list of countries providing the best opportunity for capital appreciation, up from ninth place last year. According to the Knight Frank Global House Price Index, Turkey is experiencing the fourth fastest house price growth in world, recording growth of 10.5 per cent in 2012.
Furthermore, accountancy firm Ernst & Young recently ranked Turkey the second most attractive market for investors in its 2013 ‘European Real Estate Trend Indicator’ report, and Istanbul was ranked number one for ‘Development Prospects’ in the 2013 ‘Emerging Trends in Real Estate Europe’ report from PricewaterhouseCoopers.
Turkey is concentrating resources on expanding its tourism market, and there will be appreciation in value as this infrastructure builds over time. So, any investors looking for buy-to-let opportunities may be tempted by some healthy rental yield potential, as well as strong capital appreciation over the longer term.
With accessibility being a key factor too, Turkey has a wide choice of airports and is very well served by flights from the UK. Turkey’s largest airport – Atatürk in Istanbul – was, in fact, Europe’s sixth busiest airport in 2012, recording more than 20 per cent year-on-year growth in passenger numbers. A new ‘mega’ airport in Istanbul is forecast to be operational by 2017, with an annual capacity of 90 million passengers, and once complete, it will be capable of handling 150 million, more than any other airport in the world at the moment.
Bodrum is a particular hotspot, with many of our clients snapping up small coastal apartments which they can use for their own holidays, but also rent out easily to others. But there’s also been an increase in the number of people buying more expensive villas, especially in areas such as Fethiye, and those investing in multiple properties in the prime coastal areas.
Buy-to-let investors are also drawn to cities, where there is an emerging demand for housing. In Turkey’s three biggest cities – Istanbul, Izmir and Antalya – populations are growing and there are significant levels of migration from rural areas and neighbouring countries for employment.
It’s important to remember that Turkey is also growing in popularity as a retirement destination, with many being lured by the warmer climate, lower costs of living, and excellent property value. For many, it’s simply a more cost effective location at the moment.
Obtaining a mortgage
When it comes to mortgage finance, it’s possible to obtain loans of up to 80 per cent loan to value, and considering that the country didn’t even offer mortgages until 2007, availability is generally very good. Lenders tend to prefer shorter terms, with 10-15 years being quite typical, and rates start from between 6 and 7 per cent at the moment.
It’s imperative that buyers seek advice from an independent English-speaking lawyer who is not connected to their seller, estate agent or property developer. There are some areas where buyers have encountered problems because they didn’t arrange for the necessary checks to take place. A lawyer will act on your behalf throughout the entire buying process to ensure that the title is secured, military checks are undertaken and the TAPU (title deed document) is transferred.