Property Investor News www.property-investor-news.com has interviewed Turkish Homes Abroad for its October 2007 edition.

 

We were interviewed on trends in the Turkish property market, focussing on Istanbul, and it sought advice on best places to invest in Turkey.

Summary of interview:

"How’s the Istanbul property market doing at the moment? (Busy? Static? Stagnant?)

 

In 2005, property investors suggested returns as high as 85% on their property portfolio and investments in Istanbul.  In 2007, the trend is set to continue, though maybe not at such ‘heady-heights’.

 

The Istanbul residential and commercial property markets are undergoing almost unprecedented growth. Since 2005, foreign ownership of property in Turkey is now more open and there is greater clarity on rules - the laws protecting property ownership rights have been tightened. This has been a catalyst giving investors more confidence in their purchases; along with the greater access to finance and mortgages. With the hope of Turkey integrated as a member of the EU there has been a growth of overseas investors and this seems destined to continue. As the City remains a tourist destination, due to the increasing attractions Istanbul has to offer, cruises, budget airlines et al – Istanbul has started to link to the rest of Europe, giving tourists a further reason to visit. Istanbul is now showing a record number of businesses establishing bases there, therefore meaning that more and more professionals are seeking property to buy and rent – and there is still a student marketplace.

 

What areas and types of property do you think investors should take a look at?

 

As you would imagine, Istanbul has a diverse choice of property. Wealthy Turkish people tend to live in villas and districts over-looking the Bosphorus, in places like Bebek and Yeniköy. These areas are expensive and sought after in Istanbul. Suburban apartment complexes are also increasingly popular and the focus of some UK-driven developments. This could include such areas as: Esenler, Umraniye and Atasehir.  From an investment point of view, it may be prudent to consider such as: those districts around Istanbul’s nightlife areas like Taksim, Beyoglu, where old properties are subject to refurbishment and redevelopment – and appealing to buyers. Other city centre areas such as Tarlabasi and Kasimpasa are not amongst the most sought after areas, but prices are relatively low, meaning that potential returns for investors is greater. 

 

What are prices and rental yields like in Istanbul?

 

Yields (gross) in Turkey are ‘moderate’ to ‘high’.   The Country is clearly still ear-marked as an ‘emerging market’. Properties in central Istanbul offer yields of 6% to 7.6%, whilst property in coastal areas can yield 13% to 16% (but rents in coastal areas are predominantly seasonal and this must be taken into account). Property yields in the suburbs are generally more attractive than in the cities. It is commented: apartments in Istanbul yielded around 6% to 7.5% at end-2005, and Ankara apartments yielded from 7% to 9.5%, but houses in the suburbs of Istanbul yielded around 6.5% to 8.5%, while house in the suburbs of Ankara could yield 12%. Property prices in Istanbul are on the up and up. The EU's decision remains the key driver and spring-board to further hikes in prices.

 

How do you think Istanbul prices might move over the next few years?

 

Due to the expected accession of Turkey into the EU, property prices are forecast to get higher by 100% to 200% in the next few years. Property prices are seen to be growing at a rapid rate.  In part new infrastructure and future projects are contributing - more leisure facilities such as golf courses, health resorts, tourism centres and sport stadiums and facilities that support international events like Formula One motor racing. Property prices have risen by an average of 25% is the past 12 months, and although prices are still quite cheap in the City, it is expected to carry on rising."