Hurriyet – Turkey’s megacity has once again scored well in the league of 27 European cities analyzed for their commercial real estate value, thanks to its development potential and favorable demographics, according to a survey by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI).
Emerging Trends in Real Estate Europe 2013, an annual report based on market expectations, ranked Istanbul first in “Development Prospects” based on the city’s exciting real estate potential. With its status boosted by Turkey’s rapid growth and the country’s young population, Istanbul also takes advantage of its transformation into a regional financial center and the country’s relaxed property laws which allow foreign property ownership to attract international property investors.
Istanbul ranked second in “New Property Acquisitions” thereby retaining its appeal as a top investment market and took the 4th position in the “Existing Property Performance” category of the report which draws attention to the international companies setting up regional headquarters in the city.
Turkey received USD 2.6 billion of foreign investments in the form of real estate purchases last year, up 31 percent over 2011.
Want to buy a Property in Istanbul?
1. The Booming Economy
Istanbul property is the center of everything in Turkey, the main recipient of FDI, the highest total of net migration, the highest rents and the highest prices.
The depreciation of the Lira helped to ensure Turkey reached an all-time high of $134.6 billion in exports revenue (and experts say they could have done much better!) That was 18% more than the year before - what the UK and US wouldn’t give for those figures. (According to the IMF)
Turkey GDP is expected to have reached 9% by the end of last year and the government expects GDP to ease back to 4% in 2012, still good figures when most Eurozone countries will see zero point something as an achievement. (According to FT)
2. Inward Migration
Having one of the fastest growing economies in the world cannot be achieved without job creation. Much of those jobs are being created in Istanbul where the main financial and industrial industries are located.
Inward migration to Istanbul to fill many of those jobs tripled last year and TurkStat has noted a dramatic increase in net migration to Istanbul – rising from 30,000 people annually – to 102,000 annually in 2010. (According to Turkstats)
3. Simple Supply And Demand
Demand is outstripping supply by 70,000 units annually in Istanbul and assuming that we don’t suffer another Great Depression in 2012 this situation is unlikely to change anytime soon. (According to Turkstats)
4. FDI, Shopping And More Shopping
Istanbul is one big reason why Turkey is drawing huge amounts of FDI into the country. FDI has increased from $36 billion in 2002 to $135 billion in 2011. (According to Turkstats)
Istanbul just can’t build enough shopping centers, 30 are now in the pipeline with the city accounting for two thirds of all mall space in Turkey. There will soon be 275 meters of shopping center for every 1,000 inhabitants, which is 15% more than the European average. (According to Turkstats)
5. Rising Rents
The price of property is low by most European city standards, however there is still a large section of the Istanbul population, who rent rather than buy property. Rental yields of up to 12% are achievable in Istanbul.
Some of those migrating to Istanbul are finding that their Turkish adventure turns into a hunt for rooms to rent with some paying €340 a month for a room in the city center.
6. Capital growth
If anyone invested in Turkey a year ago they would have benefited from a 9.88% rise in the value of their property and that was up to November 2011. This was well above the overall Turkey average.(According to Turkstats)
7. Loosening Restrictions On Foreign Ownership
Savvy property investors are unlikely to be surprised to hear of the loosening in restrictions to foreign ownership. Turkish law was once hostile to anyone who didn’t return the favor when it came to the right to own property in the country – not anymore.
Turkey is holding out its arms to investors again this year by lifting any lingering restrictions on citizens from 89 countries.
Key Investment Facts
Turkey’s credit rating has recently been increased by three financial institutions, including Moody’s (Bloomberg).
15th largest economy in the world. Forecasted to be top economy in Europe by 2050.
Turkey’s expected to become a full member of the EU in the next 10 years.
31.5 million tourists in 2011, a 9.8% increase from previous year.
Third highest search as a country on internet for property (Global Edge).
Turkey was the 3rd highest GDP worldwide for 2010 at around 10% and is forecasting 8% for the next 5 years (OECD).
According to Brookings institute Turkey was the fastest growing city in the world in 2010 (Nuwire).
Number one city in Europe for capital growth. Capital growth 15% to 25% per annum.
Turkish government forecasts the need for 2.5 million new homes by 2015.
High rental yield with returns from 7% – 10%, long term local tenants.
Regional HQ for blue chip companies Including Sony Ericsson, Microsoft and Coca Cola.
Located at the junction of Europe and Asia.
Istanbul was the European Capital of Culture 2010.
Low cost of living.
Superb climate with long hot summers and short, mild winters.
324 Blue Flag beaches and 17 marinas (4th highest).
Mortgages now available to EU buyers and other foreigners.
Expected to become a full EU member by 2020.
Booming investment city.
Turkey is in the 10 top investment locations in the world Financial Times.