Turkey took pole position among the list of European countries expected to sustain real estate price increases in the next 12 months, according to a recently released survey conducted by ING bank.
The 15-country survey features responses form more than 14,000 people and the anticipation of a rise in real estate prices in Turkey rose to 82%, a 10% increase from last year. Of the Turkish participants, 55% said they felt that real estate prices would increase if interest rates fell.
A full 42% of Turkish homeowners surveyed said they have a monthly mortgage obligation whereas the figure was considerably lower on average in Europe at 25%. While 46% of Europeans polled said they viewed purchasing a home as an investment, the figure was significantly higher among Turkish participants at 79%.
In a separate report published by the Turkish Statistics Institute (TurkStat) last week indicates that in August, 112,463 homes were sold in Turkey, an increase of 6.5% year-on-year. The number of homes sold in Turkey to foreign Nationals increased 15.2% year-on-year last month. Citizens of Iraq, Saudi Arabia, Kuwait, Russia and England respectively, were the top five foreign buyers of homes in Turkey in August.
Investor interest concentrated in Istanbul, Ankara and Izmir
Across the total of 2,044 homes sold to foreigners, interest was highest in Istanbul, Ankara and Izmir, Turkey's three largest provinces each recording home sales accounting for roughly one-third of all homes sold in the country. During the month of August, 47.3% of homes sold were brand new while the remaining 52.7% were resale properties.
Nationally, property sales were overall considerably more encouraging in August, compared to July. Home sales recorded a 13.5% increase in July, compared to the same month a year ago; yet transaction volume proved to be the lowest in the last six-month period which saw sales edge above the 100,000 mark.
The 13.5% rise was the lowest increase on record this year, indicating a slowdown in market activity. Significant interest was shown in high-investment Turkish real estate projects by Gulf investors at the recent Cityscape Global real estate fair held in Dubai at the beginning of September that featured heavy participation from Turkish contractors, with 50 exhibitors representing the country.
Property buyers from GCC on the rise in 2015
At the event, Diana Doğan, head of research for CBRE Turkey said: "In the second home holiday market there has been a significant increase in private investors in the residential sector from the Middle East with activity firmly focused in the country's northwest, particularly the Marmara Sea and Black Sea regions, as well as Istanbul, Bursa and Yalova".
"At the corporate investment level this demand has in turn created a yet untapped potential opportunity to develop homes specifically tailored to the Arab market. The Turkish banking sector has seen the most active interest with Arab financial institutions looking to gain a foothold or expand their presence within Turkey's lucrative banking industry".
Wouter Molman, director of event organisers Cityscape Group said: "Turkish participation has grown by 50% this year and there are no signs of it slowing down. In 2014, Gulf investors spent US$4.3bn in Turkish real estate, reaching a total investment influx of US$16.29 over the past six years".
"With Istanbul and Mediterranean coastal cities proving popular with GCC investors due to their close links with the region both geographically and culturally, Cityscape Global is the perfect platform for foreign investors to learn about the market and see what new projects are currently available".
Turkish developers are making concerted efforts to attract further GCC investment and Dumankaya Construction believe their projects in the heart of Istanbul will be particularly successful among the Arab community. Uğur Dumankaya, chairman of Dumankaya's board of directors said: "Istanbul is an attractive real estate market for foreign investors. With its economic stability, social welfare, geographical position and return on investment all pointing in the right direction, buyers form around the world are flocking to take ownership of prime developments in the city and surrounding areas".