Escape Eurozone Uncertainty In This High Growth Market
I flew into Istanbul this week and it was nice to feel the heat again after a disappointing summer in the UK. I soon discovered that the weather is not the only thing that is hot about Istanbul at the moment.
In Turkey at the moment it is hot, so we can see very clearly that when it comes to the investment cycle, cities like Istanbul are still enjoying their summer while much of the EU is still stuck in the winter.
Dare we say that the Istanbul property market is booming at the moment? We don’t hear the word boom so much these days as it suggests a bubble is forming, yet I didn’t get that impression from my trip to Istanbul.
Yes it is true that you can see a frenzy of building activity as developers try to keep up with exceptional demand. However a great deal of this new demand has come as a result of the country opening its doors to Gulf investors by easing restrictions on investment. There is no sign yet that their appetite for Turkish property is satisfied, in fact it looks like they are only just on their starters.
It is estimated that property sales to foreign investors could top $10 billion in Turkey in the medium term alone.
Many of the developers we see building new apartments in Istanbul are no doubt encouraged by the most recent Knight Frank Global House Price Index which put Turkey property prices as the third fastest growing in the world this year.
They were beaten only by Brazil which is undergoing its own economic miracle and Austria which has also seen some surprising surges in property prices. Where Turkey is concerned however, you not only have a property market supported by a growing economy, you also have low prices in comparison to EU countries.
The average asking price for a luxury apartment in Istanbul for example has more than doubled in 7 years from £1,244 to £2,800. Yet this still compares well to prices in EU cities with prices still only a fifth of those you will see in London or Hong Kong.
So while property markets in the Europe continue to be held back by a lack of available finance, shrinking job markets and low consumer confidence it is good to know that I can still escape to Istanbul for a decent summer.
Are you seeing any positive moves in property prices elsewhere in the world? Please leave your comments below.
Kabir M Qureshi