Property professionals have said that Istanbul is doing for Turkey what London is doing in the United Kingdom, acting as an engine for growth in the housing sector across the country.
That’s based on Istanbul’s price growth – more that twice the rate of growth in April compared to a year ago, and continuing to go up fast. In the first two months of this year, the market appeared to be slowing in Istanbul – ‘traditionally times when the market takes a breather,’ in the words of Adil Yaman, investment director at real estate agency Universal 21.
In the first few months of 2014, there were fears that the contsruction and real estate industries – worth 30% of Turkey’s GDP since 2002, according to the Turkish union of construction industry companies, Intes – may be in danger. A sharp decline in the value of the Turkish lira and rising interest rates threaten the real estate industry, and political turmoil beginning last year make progress precarious. A few short months ago, Fulya Kenber, a Century 21 broker in Besiktas, a central Istanbul neighbourhood, warned the Wall Street Journal, ‘higher rates and a weakening currency are negatively impacting property sales because people… have no trust.’
However, in April, prices rose by more than 1% month on month, according to data from Gyoder
As opposed to the early part of the year, when ‘we would normally expect fluctuations in growth,’ says Mr. Yaman, the buying season usually reaches a peak in August. In August of 2013, Istanbul saw price growth over 2% in a single month, adding £1, 000 to the price of a £50, 000 apartment. Istanbul saw highest annual increase in property prices in Turkey, at 15.59%, compared with 5.85% for Antalya in the same period.
Monica Anca, director of Universal 21, expains the role Istanbul plays in Turkey’s market. ‘The city has seen huge investment in its infrastructure, which hasn’t always been popular with locals, but the pace of change in the city is rapid and the population is rising with it. So it comes as no surprise that this puts pressure on existing housing stock.’
As Ms Anca went on to observe, ‘the health of the housing market is important to Turkey’s economy as it is in other countries because it provides jobs ion construction and helps provide a platform for growth in other areas of the national economy.’ She also pointed out that growth was unlikely to slow significantly in the city, after ‘the announcement of a third airport in the city which will provide a boost to suburban areas like Beylikduzu.’
‘I think the signs are positive for another year of strong growth,’ Ms Anca concluded.
Across Turkey, rising prices in Istanbul aren’t necessarily going to produce a similar rise across the country – but they will stimulate the economy, provide an additional incentive to reform and stability and boost the jobs market, as well as improving access. As Turkey increases its presence on the map for overseas buyers, it makes itself a promising country to look for investment properties in areas like Kusadasi, Didim or Bodrum, a traditionally luxurious coastal resort where property prices run from £40, 000 for a 2-bedroom flat to over a million for villas overlooking the Turkbuku bay area.