The increased interest in buying property in Turkey this summer has been coined a “gold rush”.
The Guardian likened investors increased interest in buying property in Turkey this summer as a “gold rush” – and this rush is continuing. But, is buying a property in Turkey a good investment? Should you be trading in your dollars and pounds in return for an apartment in Istanbul or a luxury villa in Bodrum?
Weak Turkish lira fuels the Turkey property boom
In August 2017 the exchange rate was 4.5 Turkish Lira to the pound. In August this year, imposed American sanctions sent the lira plummeting from just over 6 to almost 9 to the pound at the height of the currency crisis. This meant property advertised in Turkish lira suddenly became extremely affordable for anyone wielding hard currency – and investors from around the world took note. Flights from the Middle East, Germany and the UK were fully booked in August, holidaymakers and property investors all keen to take advantage of the struggling lira and bag themselves a bargain. Official statistics from the Turkish Statistical Institute (TurkStat) showed a 129.6 percent increase year on year in Turkey property sales to foreigners during August 2018, stats were up again by 151.1 percent in September – a notable increase. The majority of sales were to those from the Middle East who opted to purchase investment apartments in Istanbul, although there were also many Europeans, Arabs and Russians that bought lifestyle apartments and villas in Antalya, Izmir, Fethiye and Bodrum. Even now, as the lira has recovered in part (now trading around 7.2 to the pound), the rate still leaves a property for sale in Turkey, and life in the country, extremely affordable for foreigners. The lure of great Turkish
property deals and a cheap, sun-drenched lifestyle is hard to resist for many – all ensuring the continuation of what people are now referring to as the “2018 Turkey property boom”.
4 Good reasons to invest in a property in Turkey:
New Turkish property for citizenship law
In a bid to boost foreign investment and help bring the lira back in check, a US $250,000 investment in Turkish property for three years can now secure Turkish citizenship. Previously only those having spent US $1 million were entitled to apply, now the sum, cut by three-quarters, is a manageable amount. Officials expect this move to double property sales in Turkey and draw money into the country that would otherwise have been invested elsewhere. The scheme is working. Sales of Turkish property to foreigners is well on the rise and Turkish real estate agents are receiving many more enquiries and enjoying more sales as a result.
Buying a Turkish property is a simple procedure
Turkey has made many amendments to purchase laws and legislation over recent years to help lure in investors. It is now quicker and easier than ever before to purchase a property in Turkey. Changes to the military clearance procedure mean that in many cases apartments and villas in Turkey can be bought in just 24 hours, VAT discounts are also helping boost purchases. To settle buyer confidence, the property industry has also become strictly regulated, Turkish estate agents now need to be fully registered to limit cowboys and overnight set-ups.
Strong rental demands
Rental demand in Istanbul and along the coast is booming. The exchange rate has fueled the highly profitable short-term tourist market and housing shortages in the cities make for a constant long-term requirement. Although strict rental procedures came into play that initially put some investors off purchasing buy to lets, every city and town now has management companies that take the hassle out of new rules and make sure properties are occupied and legalities met. The potential profits have lured investors in and many are now enjoying the benefits of extremely healthy returns.
Life in Turkey is easy for foreigners. The weak lira means daily living costs are a fraction of that in the UK and much of Europe. Utilities, groceries, eating out and getting about is all remarkably cheap. This has led to expat communities springing up in most popular areas, foreigners now choosing Turkey over the likes of costly Spain and Portugal. Affordability mixed with glorious weather, breath-taking scenery and a healthy dose of Turkish hospitality ensures lifestyle investors are onto a winning combination. In Turkey, not only is property affordable, but pay checks and pensions stretch further. Why invest in Turkey? Because it makes sense.
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