The Turkish economy is steaming ahead towards recovery, with a drastically improved outlook for its property markets, after a year of robust expansion in 2013.
Residential sale prices for existing homes increased 1.41% in Turkey overall during July 2014, with residential rents rising 1.17% in the same month.
Although the domestic property market still faces challenges and demand remains weak, the climate for foreign investors has improved significantly, with interest focusing mainly on apartments in resort areas.
Residential rental values increased the most in Antalya, the fastest-growing city in Turkey, perennially popular with tourists. With property prices in the city rising by 0.46% in July this year and rental prices increasing by 1.69%,there are some interesting yields available for foreign investors looking for a property to rent out.
In terms of sales, ever-popular Istanbul achieved the highest price increases at 1.80% in July with Adana at 1.34%, Ankara 0.90% and Antalya 0.46%.
The Turkish property market has cooled down a little from the torrid pace over the last decade. From 2012 to 2013, prices grew by almost 12% in the country overall, raising concerns that the market was overheating.
However, a slow-down is now evident although growth continues to be recorded. An official from Ernst & Young said: “The pace of growth has slowed down. The construction side continues to grow but the number of apartments sold has been decreasing for some consecutive months.”
Turkey’s housing market has now shown signs of stabilising and the threat of a bubble forming no longer hangs over the country’s head. Several factors including new value-added tax laws and an anticipated economic cooling in 2014 means reduced domestic sales volume for both new and resale homes through the end of this year.
It is widely believed that foreign investors will pick up the slack in the domestic property market as transaction volumes have consistently risen over the last 18 months, showing no loss in investor sentiment for Turkey.
Real estate researchers Cushman & Wakefield recently published a very positive report on Turkey’s outlook based upon data collected over the first two quarters of the year, which said:
'Domestic demand is likely to fade into the background this year due to tight credit and high inflation. However, conditions for consumer spending and investment are expected to improve in late 2014 and these two elements of the economy are expected to return to health in 2014.'
The general consensus is that long-term growth prospects for the Turkish economy are very bright, excellent news for those invested or considering investment in the country’s property.