Turkey Has Outgrown the Need for EU Membership [Opinion]

Turkey has outgrown the need for EU membership and become a world beating property investment destination while doing so, writes Liam Bailey.

There has been a lot of talk in the press this week about how Turkey -- frustrated by the EU process seemingly going in the wrong direction -- is turning to the east in the hope of expanding its global influence and economic growth potential. While reading these articles it suddenly occurred to me: Turkey has outgrown the need for EU membership -- it is going on fine without it.

What benefit would full EU membership have to Turkey's property investment package? The answer is: very little.

In the Eastern Bloc, EU membership brought about a substantial gain in the economies of several countries, by bringing about massive growth in tourism, exports and their services sectors.

Tourism to Turkey has grown massively in the last few years; hitting over 28million visitors last year. Even this year, during a global recession Turkish tourism has continued to grow massively.

The economy has taken a battering but that is hardly a criticism given the number of economies it shares a common recent history with. No one is saying that UK property is not a worthwhile investment just because its economy fell into recession - are they?

In fact it is the way the crisis has affected Turkey that make property in the country look like an even better investment.

Yes, the economy has contracted by over 5% this year. But the economy has not collapsed into a heap, and/or been forced to take its begging bowl to the International Monetary Fund in order to survive, as some other EU members and hopefuls have been: Hungary, Ukraine, Latvia, and Belarus. Even Russia is falling over itself trying to protect the rouble against a $33 barrel of oil.

Even Germany, Europe's largest economy is expected to have contracted by 9% this year. Meanwhile Turkey has been outside of IMF assistance since May this year, and Turkish Prime Minister Recep Tayyip Erdogan is resisting signing a new deal, because it would weaken his growing international prowess as a regional power.

Meanwhile in Turkey, like many EU countries and those around the world, economic prospects are beginning to improve. Everyone is picking themselves up and surveying the smoking rubble to see just how bad things got, and how bad things could have got.

The Turkish real estate industry grew by 2% in the two months ending October according to Turkish news agency Hurriyet. This, an acceleration on the 3% growth recorded in the previous 9 months.

This is mainly based on domestic demand, because of the low interest rates, but in terms of private buyers from overseas, there has never been a better time to buy Turkish property, especially if you're British.

While the pound is struggling to gain any real ground against the euro and US dollar -- largely because the Bank of England wants it to stay weak so UK companies can gain a better international export foothold -- the good old British currency is riding high against the Turkish lira.

In the last few weeks Turkish property has fluctuated between being 9% cheaper to British buyers than it was in April, and being 11% cheaper to British buyers. As the currencies currently lie Turkish property is almost 12% cheaper to British buyers than it was in April (based on a 1.00GBP/2.516TYR exchange rate at the time of writing.).

Forex company Moneycorp recently told Write About Property in a podcasted interview that the pound would be staying strong against the lira for the foreseeable future, but it is not an ever-lasting window of opportunity.

Nor is the record low borrowing rate in Turkey. It is a misconception that foreigners cannot get mortgages in Turkey. Yes, it is true that mortgages can only be obtained on completed properties. This rules out off plan purchases, but on completed properties, foreigners are just as able to secure finance as Turks.

The borrowing rate in Turkey has recently been cut by a further 25 basis points to the record low of 6.50%. This means that foreigners can pay off loans much quicker, reducing the necessary financial commitment, and putting a Turkish property purchase within reach of more people than ever before.

View Turkey property for sale with Azure Overseas today, including the new key-ready Casmark golf apartments on the Bodrum Peninsula priced from £16,500.

Outlook on Spanish Property Market Improving

The outlook for the Spanish property market has been improving in recent months. The rate of decline in house prices slowed in the third quarter, as it had in the second according to new data from the Global Property Guide.

Spanish house prices fell by 7% between Q3 2008 and Q3 2009 according to the GPG index of global house prices. This is slower than the 8.3% contraction between Q2 2008 and Q2 2009 recorded by the Knight Frank estate agency in its index of global house prices.

The quarter on quarter decline in Q3 was just 0.49% according to the GPG index, which is again a lot slower than the 1.9% quarterly decline recorded by Knight Frank in Q2. Based on this slowing in Q3 it is possible that quarterly price growth will run into positive territory in the 4th quarter.

Given the state of the Spanish economy it is entirely plausible that the positive data is because of the increased demand from foreign buyers, which has been seen since April.

New data from mortgagesolutions.com has said that Spanish banks are surprisingly willing to lend to overseas buyers. Overseas mortgage firm Conti has further said that 22% of its enquiries for overseas property mortgages have been for Spanish property purchases.

Recently overseas property portal Property Abroad.com have put Spanish property as second most popular with those searching for property on the site in October. Spain has held second place in the portal's top 10 chart for several months, since being knocked out of 1st place by the popularity of America since May. The Move Channel and Primelocation also put Spain as second most popular in recent monthly charts.

Spain has also been noted for its distressed and repossessed property opportunities. According to overseas property expert Liam Bailey, of sector specialist copywriting firm Write About Property, these opportunities have the potential to be excellent investments, if one chooses carefully, he said in a recent article:

"You simply need to consider who is going to buy the property from you when it is time to sell. If you are buying in one of the areas most popular with expats, and plan your exit strategy based on expatriate buyers, then you must avoid the most over-developed areas; sunbathing is not a spectator sport, and most people will want a half-decent view on at least one side of their holiday properties.

"But if you choose carefully you should be able to resell a property you buy now for at least a 30% profit in 2-4 years."

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Five Reasons Egyptian Property Should be on Everyone's Shortlist

Egypt has been growing popular with tourists from around the world and visitor numbers have been increasing at a rapid rate. More recently Egypt has also been looked at by increasing numbers of property buyers. Most people are currently favouring the security of established markets, because the emerging markets have not shown the growth they were supposed to.

However, this growth has only been postponed by the credit crunch, in most cases the forecast growth is still set to become a reality. Egypt is one of those cases. Below is 5 reasons why anyone who fails to consider Egypt property will be missing out in a big way.

1: Cheap Property - Exceptional Rental Yields

Egypt is known for having among the cheapest property in the world. On the Red Sea Riviera, which encapsulates some of Egypt's fastest growing tourism hot-spots -- most notably Sharm el-Sheikh and Hurghada -- studios start from as little as £10k and you can buy a luxury 2 bedroom apartment for less than £50k.

The average rent for such properties is around £300 per week and occupancy of around 15-20 weeks per year is currently being achieved. The result is a gross rental yield of 12.5% on Red Sea Riviera property. Now you can understand why so many Sharm el-Sheikh and Hurghada properties come with guaranteed rental yields of 8% and upwards.

Another great thing about the Red Sea Riviera is that most of it is protected by the government, so it will never be overdeveloped. This will ensure demand always outstrips supply keeping prices going up.

2: Rising Tourism Set to Increase Occupancy and Yields

In an interview with Write About Property earlier this year, the Association for British Travel Agents said that tourism to Egypt from Britain had been growing at around 20% per year for the last few years, and forecast that the strong euro would see growth hit 25% this year.

3: Low Crime Rates

Often the only negative about an emerging market is its crime rate. This is not the case in Egypt. Though the Sharia law system has attracted some negative press in recent years, this is mostly because of extreme interpretations of it, for the most part it is a fair system and one that is hugely succesfull in keeping crime to a minimum. This means that those who buy Egypt property can do so in the knowledge that they and anyone else who uses the property will be safe, and so will the property when it is not in use.

4: Massive Economic Growth Set to Push Prices Upward

People often forget, but Egypt is a part of Africa. This is forgotten, because Egypt is an Arab state and is heavily active in Middle Eastern politics. No matter, Egypt is geographically part of Africa, and like many African states that have secured peace, Egypt is currently making the transition between being a third world country, and an industrialised middle income nation -- with a roaring services sector.

This can be seen in World Bank reports, which show how Egypt's economy has changed from having agriculture as the largest contributor to GDP, to having industrial sectors taking over as the largest contributor, and then the services sector knocking even the industrial sector back into second place.

The same can be seen in most emerging markets, as the advent of budget airlines and IT technology becoming affordable to the masses triggered massive growth in tourism, services outsourcing, and domestic services growth.

However, Egypt is one of the fastest emerging economies in the world. According to the CIA World Factbook the Egyptian economy has grown at 7% per year since 2006.

The International Monetary Fund is forecasting 4.7% growth this year and 4.5% next year -- not bad for a global recession. Over the next few years Egyptian economic growth is forecast to average between 6% and 10% per year. This will cause property prices to rise by at least the value of inflation, -- as materials and labour cost more -- in Egypt that is about 10-15% per year.

However, in rapidly emerging economies it is not uncommon for prices to grow much faster, anywhere up to 30% per year.

5: The Perfect Tourist Package

Egypt has the perfect tourism package: great climate, long-season and great beaches. Because it is very early in its emergence it also offers the opportunity to enjoy the kind of cheap holiday that just isn't possible in Europe anymore. This means it is excellent for you and your family and friends to enjoy holidays in your property, as well as making the fantastic rental yields mentioned above.

Article Provided by Azure Overseas, view property for sale in Egypt with Azure Overseas now.

European Property Investment on the Increase – Now is the Time to Get Back in the Saddle

Investment in European property jumped 53% in the third quarter of 2009 according to Cushman and Wakefield. Yields are also on the up across Europe. With the exception of the UK, the average yield on European property investments rose 3 basis points on the quarter – the largest quarterly rise since late 2007.

This was part of a report from Cushman and Wakefield on the rising confidence in the European real estate investment sector.

Now is certainly looking like a very good time to get back into overseas property investment in Europe, with a view to completing acquisitions into 2010. Take Germany for example:

Jones Lang la Salle are forecasting that rents on German offices will be 6% lower by the end of this year. Germany is the biggest economy in Europe, largely because of its massive export sector.

A dramatic fall in rental rates on German offices, in line with business expansion beginning to remerge, will likely spark a massive drive on business expansion in German cities; local business expansion, and foreign companies taking advantage of the situation to open offices in Germany.

This will stimulate increased demand in the residential sectors, on property to rent and property to buy. German property has often been overlooked by residential property investors, because other locations offer more spectacular yields, but German property has always been a world beater in terms of the risk/reward ration on buy to let investments,

Now that the foreign investors the world over have learned that solid rental potential that can withstand external pressures is the key to a sound property investment, German property is likely to be high on more people’s short-lists. Such a dramatic fall in office rental rates will push it even higher.

On top of that we have the fact that Germany and Italy accounted for 63% of all retail property investments in the first half of this year. Retail investment is expected to increase in the second half of the year according to analysis by CB RIchard Ellis, and Germany’s retail sector is well placed for some solid growth. This will further fuel demand in the residential sector.

Romania is another market seeing some good expansion in the commercial office sector of late. Analysis by BNP Paribas noted a major increase in sub-leasing from small business expansion. With most of the growth coming from companies involved in business consultancy, IT, private medical public institutions and Utilities, indicating expansion in those sectors within the economy. Therefore demand for residential Romanian property should see some growth in 2010.

Bulgaria sees the opening of the European Trade Centre, a five building office complex and shopping mall in Sofia, now scheduled for Spring 2010. This, again will stimulate increasing demand for Bulgarian property to rent and buy in the residential sector in the area.

Outside of Europe proper, Turkey is doing very well on the back of low interest rates and extended term mortgages. In the two months ending October, the Turkish real estate sector expanded by 2%, compared to a growth of 3% in the previous 9 months. This acceleration is thought to have been because of improving sentiment, and derestricted lending by the banks, including an increase in the term of low-rate loans from 60 months to 10 years.

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Is the American Housing Market Really in Recovery?

In the last few of months the amount of positive data about the American housing market has been increasing.

The trusted Case-Shiller index began recording price increases in Q2, and these were matched by reports of increasing demand, and in line with reports that the US economy was also on the road to recovery.

The US economy grew by 0.9% in the third quarter, but is the US housing market really on the fell of a V-shaped recovery, or is this simply a bounce?

It all started back in Q2... Case-Shiller ended months and months and months of falling prices across the board in August, when they reported that prices had only fallen in 5 out of the 20 states covered in the index. Prices had either risen or stayed the same in the other 15.

This is when reports began to circulate from various sources that the US housing market had stabilised and was on the road to recovery. Throughout July and August more positive data was revealed for June, US construction spending saw an unexpected rise of 0.3%, compared to a 0.8% fall the month before, sales increased by 11% on the month, and pending sales by 3%.

But at the same time, there were also countless news stories on the rising number of repossessions throughout August. Even now there are literally thousands of homes entering the repossession process every week, and many more struggling to avoid it. Unemployment also showed some signs of turning around, but has as yet failed to do so in any real way.

And the picture has remained pretty much the same since August: there have been many positive reports of increased and increasing sales, a lot of positive data on prices, while the problems of repossession and unemployment loom large, threatening to pull the rug out at any moment.

Bringing it back to today, a Wall Street Journal report reads:

Home sales have increased from the severely depressed levels of 2008. The inventory of unsold homes listed for sale also is down. Bidding wars are breaking out for foreclosed homes in the sorts of neighborhoods (near jobs and decent schools) that attract both first-time buyers and investors seeking rental properties.

But more than 6.7 million U.S. households with mortgages, or about 13%, are behind on their payments or are in the foreclosure process, according to the Mortgage Bankers Association. Eventually, many of them will lose those homes, sending more supply onto the market. Unemployment has continued to rise, and the housing market is unlikely to show a sustained recovery until job growth resumes.

The picture of the US housing market as a whole is very similar to that of the UK, but on a much larger scale: there are some positive signs; the people who can afford to buy in cash or get affordable finance, are taking advantage of the bargains and repossessed properties. Meanwhile continually rising repossessions and unemployment threaten to send prices back into freefall at any moment.

Some people have also suggested that it was only the government incentive package, which paid a percentage of a first time buyer's house purchase that was causing the positive data. That scheme terminates this month.

So, the answer to the question: is the US housing market recovering is a resounding maybe according to official data and mainstream sources.

In my personal opinion: what we have seen is not the beginning of the recovery proper, it has been a bounce caused by the government stimulus and improved sentiment. Repossessions and unemployment will begin to re-exert downward pressure on prices in the next 6 months. The proper recovery will only begin when unemployment begins to fall, and even then price growth will be subdued for 2-5 years as America get's back on its feet and the repossession problem is finally brought under control.

That said: there is always criticism of me and others for even reporting on UK house prices as a whole, when every region is different. And this is even more true in the US.

The same WSJ report tells us that house prices in Summit, N.J., known for good schools and an easy, 45-minute train commute to Manhattan, the median home price in September was up 1.2% from a year earlier, according to Otteau Valuation Group, an appraisal company. While in Atlantic City, N.J., which suffers from too much speculative building of condominiums and weak demand for vacation homes, the median price is down about 12% from a year ago.

I agree, it is slightly pointless to report countrywide prices if you look at it from that perspective, but the average US house price and whether it is rising or falling will always be a focus for global property pundits, especially now we have all witnessed the effect it can have on the global economy.

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Brazil Property Being ogled by the World's Investors -- and Rightly So

Brazil property is having its 40 seconds of fame at the moment, but is it all hype and no trousers? The answer to that question is always going to be primarily based on opinion, unless you know any authentic psychics that is.

I don't, but what I do know is that a blind man in the dark can see the potential gains to be made in the next decade, from a carefully chosen Brazil property investment.

Let me start at the beginning, with the massive potential for growth in the Brazilian economy:

Brazil has a massive agricultural sector; with the second largest head of cattle it is the second largest exporter of meat products, and is in the top 5 exporters of many other agriculturally produced food products.

Taking that into context; the largest contributor to Brazil's GDP before 1997 was its industrial sector, with the manufacturing sub-sector the largest contributor in the sector. Between 1987 and 97 the industrial sector was replaced by the massively growing services sector as largest contributor to GDP. The industrial sector regained some ground between then and 2006, but the services sector made up for 64% of GDP in 2007 (figures courtesy of World Bank).

This is mainly because of massive growth in tourism -- including medical tourism -- and because of the outsourcing boom that spread growth to the four corners of the developing world, as developed nations took advantage of their developing neighbours for cheap labour and everybody benefited (okay some more than others, but it's a capitalist world in which we live).

It is often asked why it is so common that the services sector has become the largest contributor to so many countries' GDP. Tourism is always mentioned as a reason, but sometimes it seems implausible that tourism would have grown sufficiently in such a short space of time to have become the main contributor to GDP.

However, tourism is not the only thing that grows, in recent years the advent of the budget airlines has generated billions in revenues for almost every country in the world. So it is growth in tourism as well as massive growth in the airline industry that combines with other elements of the services sector to put it on top.

This potential for growth went off the scale, when on top of all the above Brazil discovered a sizeable oil field lying below the sea and rock of its territorial waters. Everyone knows that oil is a massive revenue generator, and the find will certainly make Brazil one of the largest economies in the world.

Its massive potential for economic growth is enough to make Brazil property a favourite with property investors. So the fact that Brazil won the honour of hosting the World Cup in 2014, and Rio de Janeiro the Olympics two years later was simply the icing on the cake of Brazil property's popularity with overseas buyers.

Brazil property is currently being looked at very closely by almost every property investment fund currently operating, and is also the focus of millions of private investors who can see the massive potential profit from a buy to let investment in the country, which will also grow significantly in terms of capital value as well.

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UK Employment Data Turning Positive will Spark Rise in British Appetite for Overseas Property

Today the Office for National Statistics revealed the latest data on the UK labour market, and while it is a lot more positive than previous reports, overall it is still negative, as we can see from Sterling losing some ground to the Euro and the Dollar.

Positivity comes in the fact that 86,000 more people were in part-time employment in Q3 than in Q2. Unfortunately that is tempered by an 80,000 fall in the number of people in full time employment. The combination of the two gives a positive 6000 more people in employment in the July-September quarter than in the previous quarter. However, the number of unemployed people climbed 30,000 to 2.46 million.

While I said that the report was negative overall, which as you can see it is in terms of raw data, however, in terms of interpretation this can only be called a positive report. This is because the rise in unemployed people is a lot smaller than previous quarters, and it contains the words "increase" and "in the number of people in employment", in the same sentence. All previous reports this year have been a solid wall of negative data.

The fact that the number of people in part-time employment rose could be said to show that employers are beginning to test the waters of expansion by hiring part-time staff, although the report says it is simply people taking part-time jobs because they can't find full time ones.

Either way, like I said, this is the first labour market review to contain any positive data, and it confirms that the UK economy is passed its lowest point and on the road to recovery. How this relates to overseas property investment is simple.

Since the first UK economic indicators turned positive in April, demand for overseas property has been increasing as British buyers returned to their favourite foreign hotspots. This has primarily been well-off Brits, who weren't left in financial difficulty by the recession, but who were fearful of just how bad it could get; that they might become affected eventually. Now that the full effect can be measured more easily their confidence has returned.

However, many more potential buyers have been waiting for unemployment to run out of rocket fuel before they felt confident in the recovery. Now that the ONS has revealed clear data that suggests that point is upon us. It will likely mark further increases in demand for overseas property among British buyers.

This will be hindered by the fact that finance is still very restricted for property purchases abroad, just as it is in the UK. This is because, unlike the first group of returning buyers, those returning because fear for their job is subsiding are more likely to be looking for finance to make their purchase.

That said, while finance is hard to come by, it is not impossible, so there will be a rise in demand for overseas property from British buyers. This demand will continue to rise as unemployment falls, as mortgages get easier to obtain and as Sterling regains its former glory.

German Property Perfect for Today’s Breed of Investor – to benefit from Crunch

German property investment has totalled 1.9 billion Euros so far this year according to a new report by Savills. The investment consultancy says that the money spent so far has been mostly by German Real Estate Investment Trusts, but that it expects the return of foreigners in 2010.

German property could do very well in the coming years, and if it does then it will have the credit crunch to thank.

Before the credit crunch, German property was constantly losing out to the emerging markets, and even to its neighbouring established markets, when it came to overseas property investment, because investors will primarily looking for exceptional capital gain.

Now that people have seen in no uncertain terms how quickly any capital gain can be lost, today's property investor is primarily looking for solid rental performance in their property of choice. For that type of investor Germany is perfect.

In Germany only 42% of the population owns their own home, and 44% rent at the market rate (according to recent figures from Eurostat).

This means that the government has to restrict rental rates, and landlords are only allowed to raise rents if the economy is growing. That is where the downside ends. In Germany tenants are very loyal, and when one tenant leaves it is relatively easy to find another. Typical yields are around the 4% mark, or around 6% in some areas.

Another reason why German property is perfect for today's investor is the abundant availability of properties with tenants already in place. Today's investor is researching their acquisitions to within an inch of their lives. Having the tenant in place with a rent figure set allows the potential investor to have exact figures on which to calculate the cash-flow from their German investment property.

It is also worth mentioning the fact that there are very few -- if any -- off plan property in Germany. Especially in Berlin it is almost all resale apartments in buildings built 40-100 years ago. This is also highly suited to today's risk averse property investor.

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£700K Greek Property Sale to British Buyer Tells a Lot about the Overseas Property Industry Today

I just read a press release. Apparently Azure Overseas have sold a 3 bedroom villa on the Greek island of Samos to a Brit for £700k. As the press release rightly points out, this is a massive signal that the reports of increasing appetite for overseas property is increasing within Britain. This is undoubtedly as a result of major increases in consumer confidence in the last few months.

I have had a look in the Halcyon Hills development, obviously I don't know the full details of the sale, but the finance on properties is up to 80% LTV, which means a 20% deposit, which means this person -- a solicitor from Surrey according to the release -- paid a deposit of about £170k for this property.

But the biggest part of the story for me, is the fact that the property is off plan. During the worst of the credit crunch, when the reports of developments being postponed and cancelled in Dubai were never going to end, there were people who believe no one would ever buy an off plan property again. Then, a couple of months ago, Overseas Property Professional, in a report into increasing demand for overseas property, said that the demand for off plan was rising also.

However, the reports that the new breed of overseas property buyers would be doing their own research at great length, and not buying on the strength of the agent's word are also confirmed by the press release.

I always said that anyone who did their research would not have bought in Dubai, and that off plan property will always be a great investment if the research is done properly. Thank fully the new breed of researching overseas property buyer is not discounting the potential of off plan property simply because of the over-publicised risk.

Of course -- as the OPP article pointed out -- most properties currently being sold to the international buyer are off plan, which means it has to be considered to any consumer wanting a decent level of choice.

For anyone considering buying an overseas property, either as an investment or lifestyle choice, there is an excellent guide to researching an off plan purchase here, and for investors I recently found the most comprehensive guide to overseas property investment I have ever read.