These complications include a difficult planning system and unattractive leasing market. Consequently, Turkish property was already viewed by many as a risky investment. Add political tension into the mix and it is no surprise many are concerned about the fate of real estate. However, there is a gap between perception and what is actually happening in the sector. Turkey has just received its second investment grade credit and construction is booming. Prices have also managed to hold up better during the financial crisis than in other countries in and around the eurozone.
Nevertheless, the market is relatively opaque and getting an accurate picture of activity on the ground can be difficult, Reuters reported. Saturation is also an issue in certain parts of the country. This has been deemed to be the case near Istanbul's Taksim Square, where the precursor protest to the riots took place over plans to fell trees for development. Murat Ergin, managing director of Istanbul real estate agent Kuzeybati, explained to the news portal that parts of Turkey such as this are already "overbuilt". This is bad news for investors, as saturation drives down the price of property.
However, when it comes to smaller real estate investors, not everyone is convinced that fundamentals in the country will act as a deterrent to buyers. Richard Way, editor of The Overseas Guides Company, believes the strategic position of Turkey will attract investors. The government has already made it easier for foreigners to visit the country and purchase property, announcing plans to grant one-year residency to all people buying residential real estate there. "While British people historically have had little difficulty obtaining residence permits in Turkey, Middle Eastern and other non-European nations have not always found it easy – this new legislation will be especially attractive to them," Mr Way explained.