WHY ISTANBUL

The population of Turkey is growing faster than in any other country in Europe, and will soar to 83 million by 2023, up from 72.5 million today. Turkey has an unusually young demographic, with half the population below 29 years old, according to TurkStat. The working population is an unusually large section of the total population, which has a strong impact on economic growth.

Pressure on existing housing in Istanbul is set to increase, as the population rises from 13.5 million today to 14.8 million in December 2016.

There is no doubt that 2015 and the beginning of 2016, the property market in Turkey and particularly in Istanbul was doing explicitly well. Just a few sources:  http://www.telegraph.co.uk/property/house-prices/turkey-leads-global-house-price-increases/ & http://www.globalpropertyguide.com/Europe/Turkey/Price-History On the other hand, after the first quester of 2016 and particularly after the coup attempt in July 2016, the market has slowed down for the international buyers (ISIS attacks did not help of course). The numbers of the foreign buyers have decreased, whereas the number of the sales in Turkey has increased compared to 2015. Interestingly, the local market has not slowed down. Please see below:

Number of House sales (2015-2016)

Number of House sales (2015-2016)

Source: Turkish Statistics Institute (TUIK) – Published on 24th of January 2017

Domestic buyers have been crucial to Istanbul’s rise. More than their Western European counterparts, Turkish investors have always had a preference for property over more liquid assets such as equities. Falling interest rates have helped make new home loans affordable.

Since the beginning of 2017 the market (at international level) is picking up particularly after the Referendum, which took place in April 2017. The ease of the ISIS terrorist attacks helped to build up the confidence in the market at the same time. In 2017 one house is being sold in Turkey (Source: https://www.dailysabah.com/real-estate/2017/05/25/one-house-sold-every-25-minutes-in-turkey-in-2017). If you check the House Price Index published by the Central Bank of turkey, you will see the impressive capital appreciation particularly in Istanbul (Source: http://www.tcmb.gov.tr/wps/wcm/connect/a6fe031d-f7b0-4a09-93e0-63a99c404d14/HPI-HHPI.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACEa6fe031d-f7b0-4a09-93e0-63a99c404d14 ) According to the Telegraph (19.06.2017) Istanbul is one of the world’s best cities to invest in property.

One of the incentives introduced by the Turkish government earlier this year was its golden visa scheme. The government announced that it would grant citizenship to the foreigners who buy property worth at least $1 million and invest a minimum of $2 million, or deposit at least $3 million in a bank account for more than three years. The Turkish government predicted that the new law would trigger an extra $1 billion in revenue from property sales in 2017. I believe that the demand will have a significant boom with the help of the stable environment in the country (i.e. the disappearance of uncertainties and adoption of other structural steps such as conferring citizenship to foreign investors and offering them exemption from VAT).

Historically, GCC nationals have made aggressive real estate investments in Turkey, purchasing one in every four properties bought by foreigners in 2015 alone, says Gyoder’s Q3 2016 report. According to property consultant CBRE, GCC countries currently account for about 50 per cent of all foreign sales into Turkey. Istanbul attracted the highest number of foreign buyers.

In sum, property investment in Istanbul is considered to be low risk and high growth thanks to low supply and high demand, a steady population growth and availability of finance. One of the most modern cities in the world, Istanbul still manages to retain its rich history and traditional charm whilst emerging as one of the world’s richest cities, home to the fourth highest number of billionaires. The average property in Istanbul grew in value by 42% between 2011 and 2016 and buy-to-let investors in particular are now choosing to capitalize on the city’s rising rents and newly developing areas with a fast rental growth. Beylikduzu, where most of our all projects are located, has been attracted by the local and international investors not only in terms of marvelous capital appreciation (which is above the average in Istanbul), but also by offering a net yield (again because of the average in Istanbul –  for the simple reason: the property prices per SQM is very competitive). If you check the pages 25-26 on Colliers Report (http://www.colliers.com/-/media/files/emea/turkey/research/reviews/2017-1-turkey-review-web.pdf) you will see some good analyses why the prices and the rents are increasing in certain areas.  You can also follow the “Residential Rent and Sales Prices around the Metrobus and Rail Systems in Istanbul” from the map. This is one of the reasons we select the projects near the main highway E5 (where the Metrobus run). Besides, I reckon the prices will drastically increase by the end of 2018 when the 3rd Airport is open and when the metro is extended to Beylikduzu.

The Turkey property market, offering ever-greater chances for investors every year, has come to prominence especially in the last decade. Although with the recent economic crisis and the global economic recession the European and US real estate markets have been negatively affected, the real estate market in Turkey is still promising. While the reduction in demand and a downward trend in house prices have been observed all over Europe, according to TurkStat statistics the number of apartment units sold in Istanbul for 2014 grew to 222,748 of the total sales for Turkey of 1,165,381, a 19.3% share of the country’s total marketplace. December’s sales show a 16.3% increase over previous period.

The entry of global actors into the real estate market is increasing the competitiveness of the sector, while massive mergers and acquisitions taking place help its expansion and overall growth rates. Different surveys and publications such as the “Emerging Trends in Real Estate Europe”, prepared jointly by PricewaterhouseCoopers (PWC) and the Urban Land Institute (ULI), show how global and local interest in the Turkey property market has increased. According to the 2013 publication of the report, Istanbul is ranked as the most attractive investment market in Europe in the “Existing Property Performance”, “New Property Acquisitions”, and “Development Prospects” categories, followed by Munich, Warsaw, Berlin, and Stockholm. Meanwhile, Turkey ranks as the 3rd most attractive real estate investment destination among the emerging countries in 2013, according to a survey conducted by the Association of Foreign Investors in Real Estate (AFIRE).

As Turkey progresses along the road to EU membership, the essential legislative reforms introduced have made investing in the real estate market even easier and more profitable. The amendments to the Land Registry Law, the Mortgage Law, and the redrafting of tax laws are also designed to improve the competitiveness of the Turkey property market.

The property market in Turkey also has great prospects thanks to demographic factors that are changing in parallel with improving economic figures. The demand for offices, logistical and industrial areas is expected to increase in line with the increasing number of global and local companies.

  • Stable, institutionalized, internationalized sector thanks to predictable inflation rates and consistent prices.
  • Dematerialization, transparency, auditing, high quality and standards, institutionalization and statistical information in line with the ongoing EU accession process.
  • 60 percent of Turkey’s population is under the age of 34, while the country’s GDP was USD 736 billion in 2010.
  • Housing loans increased from TRY 3.5 billion in 2004 to TRY 68 billion as of September 2011. The share of housing loans as a proportion of Turkey’s GDP is estimated to hit 15 percent in 2015.
  • 4 million Tourists visited Turkey in 2014, making Turkey the 6th most visited holiday destination in the world. These figures show the great potential of the Turkey property market as regards the tourism industry. Some 14 million visited Istanbul making it the fastest growing city for tourism in the world.
  • The number of modern shopping centres increased from 44 to 284 between 2000 and 2011.
    Turkey, as a regional hub providing easy access to 1.5 billion consumers in Europe, the CIS and as an energy corridor and terminal between Europe, Central Asia and the Middle East, creates more and more enterprises each year within its borders.

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