Turkish Property Market Predicted to Become Even Hotter

The Turkish property market is predicted to be extremely active this year due to increased confidence from foreign investors, and the number of developments being launched this summer. The figures released by the Turkish Real Estate Investing Partners Association (GYODER) show that foreign investments increased by 40% last year with sales worth $2.5 billion. To put this in perspective, sales between 2006 and 2008 totalled $3 billion.

Although there are regions of high supply, in general Turkey has not fallen into the trap of other Mediterranean countries of oversupply. Another Turkish strength is its 8300 km of beautiful coastline, offering property buyers a huge choice of location and property type, so just about everyone can find a home to fit their budget. The Bodrum peninsula is increasingly popular, not least because of its good connections to the rest of Europe. First Choice Airways, Thomas Cook and EasyJet all have regular flights to Bodrum, while Monarch will begin twice weekly flights from Manchester next month.

It's easy to see why Bodrum is popular as it's an ancient fishing village with a great deal of history which appeals to culture vultures, but it's also a lively town plenty of restaurants and bars. Gumusluk is close to Bodrum but offers a much more relaxed style of living, and the area is especially popular with divers and families attracted to the blue flag cleanliness of the beaches. Property prices are still very competitive in Turkey, especially when compared to other Mediterranean countries whose property markets have suffered greatly in the global economic downturn.

Azure Overseas are currently marketing a new property on the Bodrum Peninsula. The Village II offers high quality apartments featuring mod cons like air conditioning, internet and sattelite tv, in a fantastic resort complete with Gym Centre, Beauty Spa, Turkish Bath complex, Swimming Pool, Children Swimming Pool, Pool Snack Bar, Restaurant/Café, Market, and Childrens Playground. As an example of the value the development offers 1 bedroom apartments with a 5% rental guarantee for less than £40k.

Turkish Property Gaining Appeal with Overseas Property Investors

Turkey is a hot spot for property investors these days.  Its economy is growing very quickly and not only that, it has a stable, strong economy.  It’s no secret; Turkey is booming. 

Tourists love to travel to Turkey and the construction industry has taken advantage of this and is thriving.  As fast as developers are putting up developments, investors are taking advantage of competent, wise investments. 

Europe has countries with strong economies, but Turkey is shining right now.  The GDP has grown 10.3 percent in the 2^nd quarter and according to the OECD, it is predicted that the entire economy will grow perhaps 6.7 percent within the next 7 years, which is greater than all its neighbours. 

Why is Turkey gaining such momentum?  Many believe it is their powerful banking and financial system.  It is fiscally stable due to the government taking time and great effort to achieve stability.  Therefore, investors rest assured that their investments will stand and Turkish buyers are confident when they are ready to purchase a home.

Dominic Strauss-Kahn, who is the director of the International Monetary Fund, states that Turkey is, “the most suitable emerging market candidate for a seat on the IMF executive board.” 

Turkey’s property market is booming as well.  The Global Property Guide reports that Turkey is ripe for residential property investment as new laws now enable foreigners to purchase land.  Hard to believe this country was in such a financial crisis only ten short years ago and now it is one of the fastest growing economies in Europe.

Overseas Property: Has Private Investment Really Been Killed?

This week, overseas property portal Primelocation ran a report on how 91% of all property searches were for property in France, Spain, Italy and the US. But we know from recent reports that the world’s investors are focussing heavily on places like Turkey and Egypt, which are growing strongly at the moment. Surely pure property investment hasn’t been killed on the private level, has it?

It seems to have been according to portal searches. Rightmove Overseas’ results also showed no sign of Turkey or Egypt recently.

Thank fully we know that it hasn’t been. We know that buyers are still heavily interested in Turkish and Hurghada property because we talk to them everyday.

So where is the deficit? Well, the keyword is buyers. Most of us heard about the recent battle of the apps as both Rightmove and Primelocation brought out Apps for the much reveered Ipad at around the same time (Rightmove won by the way). These of course followed Iphone apps by not only Rightmove and Primelocation but all the other major portals as well.

These apps, and technological advances like it have not only made it easier to search for overseas property, but they have made it fun. Unfortunately this has increased the number of people searching for overseas property who have no serious intention of buying anytime soon.

Anyone who has ever dreamed of buying an overseas property (and let’s face it, who hasn’t?) in the sun is now searching for their dream home on the miserable commute home from work. Whereas before people would have played mini-games to escape the akward silence of the train, now they are playing with their apps.

This is great for the portals, but not such great news for the agents receiving their enquiries. So, while the portal search enquiries are an indication of the lasting popularity of the traditional destinations with those seeking a lifestyle buy, they do not neccesarily indicate an end to pure investment on the private level.

Any Briton on a low budget looking for an investment or holiday home investment they can afford now, and easily and affordably get to, is buying in Egypt or Turkey, and that will be the case for the foreseeable future.

Turkish Property and Tourism to Benefit from Economic Realities

Property in Turkey could see increased foreign demand as Europe continues to struggle with the recession and sovereign debt crisis, according to one overseas property commentator.

“We are all feeling the pinch as we struggle into a ‘rocky recovery’,” said Liam Bailey, director of Write About Property, explaining:

“In fact many people are feeling worse now than they did during the recession, because we all thought the worst was past, now inflation is rising faster than growth, and we are full of dread at the impending austerity measures.

“For the next few years, because people always want holidays abroad, we will see continued rises in tourism to low-cost destinations like Turkey, and this will also bring increases in demand for holiday homes and holiday home investments in the country, also fuelled by the country’s low prices.”

Bailey went on to say that Turkey would also benefit from Greece being practically a no-tourist zone.

“Greece has always been one of Turkey’s biggest competitors for tourism. Now, with the British Consulate and others warning of disruptions because of the industrial actions, and terrorist groups threatening to target the tourism industry, many people will give Turkey a wide berth, and many of them will choose Turkey instead.”

For the property market, Bailey also said that Turkey would benefit from being in a better state fiscally than its rivals.

“People are more cautious than ever when it comes to buying overseas property. When you look at Greece, Spain and Portugal being downgraded by investment ratings agencies, and Turkey looking likely to be upgraded, you do the math,” he said.

Why is Turkey Property Such Hot News Right Now?

Turkey's profile as an international destination of choice for tourists, holiday home buyers and even holiday property investors (fly-to-letters). It used to be that one of the main reasons to recommend buying property in Turkey was because EU membership was on the horizon, but since then Turkey has become a strong and powerful package all on its own, and property there is predicted and capable of growing and earning strong rental yields with or without EU membership.

We haven't really published a guide like this since things changed so drastically, and we thought that now would be a good time to do so. But why is Turkey so hot?

Economy Growing Faster than Rest of Europe

According to Turkstat data Turkish GDP grew 11.7% in the first quarter of this year compared to the same quarter of last year. This follows a growth of 6% in the final quarter of last year. Comparing this to Spain which contracted –1.3% and –3.1% respectively, the UK which shrank  –0.2% and  -3.1% respectively, Germany which grew 1.5% in Q1 following a –-2.2% contraction in Q4, France which grew 1.2% following a 0.5% contraction, and Italy which grew 0.5% following a 2.8% contraction, you can see why the Turkish economy is becoming such hot news.

A strong economy means a strong currency, healthy inflation (if carefully managed) and therefore growing property prices.

Strong Tourism Growth

The latest data on tourism from the tourism ministry shows that Turkish tourism grew 9.6% in the first half of this year, compared to the first half of last year. While the British travel industry is reporting a struggle, the Turkish tourism ministry shows that any drop in British visitors is being more than compensated for by growth in visitor numbers from Russia, Syria, Iran and Bulgaria

Tourism growth is one of the most important factors in the success of the Turkish property market. Again this is because most buyers are buying holiday homes and almost all of them will plan to rent it out for an additional income.

Marinas, Resorts and Success Stories

The volume of positive news relating to the overseas property market in Turkey is about the biggest in the world right now. Each week we hear of a new marina, new investments, new hotels from Hilton, Marriott, and other success stories, with very few if any negative news to temper it. For instance, there have been no reports of developments cancelled, or investors out of pocket, or certainly no more than in any market.

Thus, each week confidence in the Turkish property market grows. In a risk averse world confidence is a main driver of sales, and that is why Turkey's fortunes continue to improve.

Turkey Property Investment Recommended by GPG and Me

The well respected Global Property Guide publication has given a glowing recommendation for investment in Turkish property, particularly Istanbul.

According to the firm's research for its mid-year investment recommendations, yields on Turkish property in Istanbul are currently averaging 5.48%, which is higher than average yields in Italy (5.04%), France (3.85%), Spain (3.81%) and Portugal (3.63%).

These yields, as with most -- if not all -- of the GPG rental yield figures is based on residential rentals, which means they do not give a clear indication as to the kind of yields a holiday property might make, which can often by higher than residential yields depending on a number of factors.

This is unfortunate, because most overseas buyers of Turkish property are currently aiming at holiday lets, and there have been several reports of those buyers earning yields of 6% net.

Basically, yields on holiday property in Turkey will tent to be higher, because property in the touristic areas tends to be cheaper than that found in Istanbul, while rental rates on holiday lets tend to be higher, which can actually be higher than residential rents in Istanbul or the same depending on the property and exact locations in question.

Given these truths it is only a matter of how much paying occupancy the holiday home owners can achieve, which then depends on the amount of time they want to spend in the property.

The best strategy for holiday home investors in Turkish property, like those anywhere else in the world is to rent out the property for the entire season and use it during low season. This is a problem for some owners who don't do sufficient research and subsequently find out that the area they have bought in is completely closed off during low season, with not even so much as a shop to buy essentials like milk.

This is in fact one of the reasons why Turkey is currently seeing its popularity with this type of investor soar: because most buyers are currently doing a lot of research, they are finding out that most of Turkey's touristic areas are open all-year round.

Turkish Property Investment Making the News

Turkish property is currently among the most talked about in the world of overseas property, and for all the right reasons.

There are two main stories in the past week: Global Property Guide stating that the average rental yield on Turkish property is 5.48 per cent, which is much higher than the yields on offer in France (3.85%), Spain (3.81%) and Portugal (3.63%) and reports on the massive numbers of British people owning property in Turkey.

According to the Turkish Land Registry's latest figures, 32,000 Britons own Turkish property covering 6 million square meters. This is twice the area of property owned by Germans (3.5 million square meters), which is significant because Germany is Turkey's largest tourism market. The report received coverage in the Telegraph.

These reports follow several other features on the draws of Turkish property to appear in the national press, including one article calling the Turkish resort town Belek the next Algarve. If this had been a few years ago it would have been insignificant, but now, when the press is being extra cautious in its praise, this is all a big testament to the potential of Turkey.

Speaking of potential, nearly all the articles you read about Turkey, especially in the industry press, talk about the investment potential of Turkish property. However, this potential is being missed out on at the moment, because the majority of buyers are lifestyle buyers, with investment being a secondary consideration on their minds.

Sure, the majority of these people are still benefiting from the investment potential, because they are renting out their property when they or their family and friends are not using it. But the keywords there are "when ... are not using it", meaning they are not realising the maximum potential return from investment in Turkish property.

Turkish Property Sales Increasing, Set to Continue Growing

Conti, one of the largest mortgage brokers for foreign property purchases has revealed that it issued twice the quotes for mortgages on Turkish property in May than in April.

The firm said that this huge growth followed steady growth over the last year, which it put down to the strong Euro highlighting the better value for money Turkey offered as a tourism destination and in property purchases.

Clare Nessling, Conti's operations director, says: "These factors, combined with low interest rates and some bargain property prices, have made Turkey increasingly attractive, as well as more affordable, for UK buyers. Property purchase costs and taxes there tend to be lower than other popular hotspots. Accessibility is important too and the country has a wide choice of airports which are well served by flights from the UK. Bodrum, for example, is only half an hour's drive from the international airport."

While Conti pointed out the steady growth in demand for Turkish mortgages over the last year, looking back to June last year, we can see that Conti then released data revealing a 143% growth in Turkish mortgage quotes in the previous two months, and a 65% increase comparing the opening 5 months of 2009 to the closing 5 months of 2008.

This is a very positive sign for Turkey, especially at a time when overseas property sales in the lower-budget category -- which Turkish property falls into -- are on the increase.

Of course, with the pound now strengthening against the Euro, Turkey will have to compete with Eurozone destinations.

This shouldn't be a problem though, Turkish property sales accelerated rapidly between 2005 and the second half of 2008 when the crunch went global, so it is a safe bet that Turkey will see strong sales again as part of the natural progression of recovery in overseas property demand. In fact if anything, the downturn will prove to have done Turkish property a favour, by increasing its status as a global property destination.

Top 3 Property Investments for 2010

I have seen a lot of articles in the last week or 2 highlighting the best property investments for 2010. Brazil has been on every one of them, but it won’t be on mine, and you’ll quickly understand why.

1: Turkey

Turkey received over 28 million tourists from around the world in 2008 and there is every indication the number has grown slightly this year. According to government officials they are still on track for their target of 30 million by 2010.

In 2008 they received 1.5 million British visitors. This is expected to be 3 million by 2010, not least because of the strong Euro.

The simple fact is there just aren’t enough commercial accommodation slots for such massive numbers of tourists, which brings rapidly rising demand for privately rented holiday accommodation in Turkey.

This is set to be further boosted as tourism continues to grow and as more and more people use the internet to compile their own package holidays for better quality accommodation and cheaper flights.

Then you have the value for money factor: Turkish property at its low prices always offered fantastic value for money. However, now that the Euro is a lot stronger against the pound, whilst the lira is weaker than its previous long-term average, Turkish property is offering even greater value for money.

According to realtors, Turkish property owners are currently fetching yields upwards of 6%. This is already very impressive and will grow as demand for rental property grows faster than prices in the next 2 years.

2: Egypt

In Egypt’s case it is also rising tourism and low property prices that make it one of the top overseas property investment destinations for 2010.

In our opinion the Red Sea Riviera, especially Hurghada is offering the best opportunities. There are currently dozens of apartments for sale in Hurghada offering guaranteed rental yields of 10 or 12% for 1 to 5 years.

This is because you can buy a 2 bedroom apartment in Hurghada for less than £40k and rent it for about £350 per week. giving a gross yield of 13.94% gross from a very conservative 15 week (32% approx) occupancy. If you make it a more realistic 60% (30wk approx) the gross yield is 25%. Now you can see why Hurghada properties come with such exceptional guaranteed rental yields.

3: America

Whatever we think about America, it is still the largest economy in the world, and it still owns the currency we all base trade on. Properties in America are currently being sold at between 10% more than in 2007, to about 40% less than they were worth in 2007, depending on where you look. Not to mention the tens of thousands of distressed and repossessed properties being sold at discounts of up to 60%.

It doesn’t take a rocket scientist to pick a property that will make a 10% rental yield or maybe even a little more, and to grow as the local economy recovers. Nor does it take a rocket scientist to also make sure that property is capable of regaining its 2007 value in a reasonable amount of time.

Investors doing the calculations on carefully chosen properties are coming up with yields of 140% – 200% after 5 years.

We also like Malaysia because of its strong economic fundamentals, stable property market and favourable tax laws, and India because it is set to see demand for property continue to outstrip supply at an alarming rate.

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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.

View Turkey property for sale

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Exchange Rates Erratic, Watch the Lira for Instant Equity on Turkish Property Buys

I have just listened to a podcasted interview with Moneycorp. In the interview, David Kerns, a senior trader with the outfit spoke about the exchange rates between Sterling and the Euro, and Sterling and the Turkish Lira.

What he said on the Euro was hardly surprising. The Pound is weak against the Euro, because of the depressed UK economy that is printing money, and because the Bank of England want a weak Pound so ur companies can get a foothold overseas -- in other words they are quite happy to take advantage of the situation.

However, he did say that the Pound was going to go down to 1.05 Euros in the next month, but it has since rallied and is currently back up at 1.097. Kerns said that a fair price for a Pound is 1.15 Euros, so if the Pound does overshoot this when the UK economy recovers then it is definitely worth making then the time to buy a property in the Eurozone; to capitalise on instant equity.

It is the performance of the Turkish Lira that is the biggest surprise however. Kerns said that the Lira was going to stay strong, because its high yielding potential makes it a favourite for investment among the brave. Since then however, the Pound has climbed to be worth 2.393 Turkish Lira, up from 2.29 as Kerns spoke.

When the Lira strengthens it tends to go as far as 2.30 against the Pound, this is a kind of imaginary floor if you like, and 2.35 - 2.40 is the long term average. With that in mind anytime the Pound is worth more than 2.40, British buyers get instant equity in Turkish property purchases, and it could very well go higher than that in the coming weeks.

View Turkey property for sale

Turkey and Egypt Property Markets Benefit from Strong Euro

The property markets of Egypt and Turkey are benefiting massively from the current strength of the Euro against Sterling, which is forcing Brits outside the Eurozone for their -- practically mandatory -- two weeks in the sun each year.

The main benefit that the strong Euro is having is to increase tourism growth to Egypt and Turkey, which were growing rapidly already. But this is also putting them into the spotlight as second home destinations.

The question that many overseas property investors will be asking is: what are the chances of the Euro dropping its value anytime soon. The truth is: it doesn't matter, according to the Association of British Travel Agents tourism to Egypt and Turkey from Britain has been growing at an average of 20% for the past few years. All the Euro strengthening did was accelerating this to a forecasted growth of 25% this year.

Over the long term, the Pound will never get you as much in Euros as it will in Turkish Lira or Egyptian Pound, so of all the people currently choosing Turkey or Egypt, who would normally have holidays in the Eurozone, there is more chance that they will become their destination of choice even if Sterling does regain the ground it has lost against the Euro.

Another benefit of the increased tourism from people who would normally have holidayed in the Eurozone, is that property is a lot more affordable in Turkey and Egypt than it is in Spain or the other Eurozone hotspots. So, if 10% of holidaymakers to Spain could afford a second hokme and bought there, then maybe 60% can afford to buy in Egypt and 35% can afford to buy in Turkey, and maybe 20% will buy.

At any rate the increased tourism is always going to be good for rental yields in the countries and for the economies. As economies grow property values increase automatically; the two go hand in hand. All in all the numbers of Brits buying property in Egypt and Turkey is set to increase massively in the coming months and years.

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Portugal Property 4th Most Popular in July

Portugal is currently the 5th most popular country among those searching to buy property abroad. Well, that is according to major UK portal Property Abroad.com which publish a chart of the most popular countries for every month.

The only 4 countries more popular than Portugal were America (1st), Spain (2nd), France (3rd) and Greece 4th. The common denominator being that they are all established markets, and with the exception of America of course they are all in the Eurozone.

Last month, Sterling had reached a very strong point against the Lira, so Turkey property climbing to 5th most popular was understandable, but it was still a shock that Portugal property slipped back 3 places instead of one.

Portugal property is by no means the cheapest overseas property, but there is still room for growth, according to Frank Crowley, director of Azure Overseas.

"Portugal is still growing in popularity as a holiday destination, and as a destination to buy overseas property, especially given the current dissolution with Spanish property, which has benefited Portugal no end," he said.

Azure Overseas is currently marketing property for sale in Portugal on the Silver Coast priced from under £110,000.