Thursday, May 30, 2024

Property Investment In Turkey On The Up

From an investment perspective, Istanbul and Bodrum are fast proving to be up and coming areas within Turkey.  The ever increasing demand is for real estate is happening internally as appose to foreign buyers investing in the ‘place in the sun’ concept.

Turkey’s largest city, Istanbul holds a population of 15M and proving to be an economic powerhouse.  Istanbul is Turkey’s largest city, circa 15m population, and its economic powerhouse. There is a significant shortage of quality accommodation for its growing middle classes.  Considering that over 60% of Istanbul’s population is under the age of 32, then you can appreciate the strength in demand now and in years to come.  Earning power of Turkish Middle Classes is increasing by a rate of around 10% per annum, this equates to a GDP growth of around 10% pa in this segment of the population.  Compared to the Euro zone this is a phenomenal growth, which has a massive impact on the housing market.

Bodrum is the choice of well-to-do Turks for a second home.  Also, it is interesting to note that with the changing attitudes to work and ‘work from home’ segment growing as well as hourly flights from Istanbul to Bodrum, there are a lot of Turks who are actually moving to Bodrum.  So, demand for quality homes in Bodrum is always on an upward trend also.  There is very little vulnerability to changes in foreign buying trends.  Therefore, for a viable investment land and property in Bodrum is a smart idea for sure.

If we look at Istanbul, there are several main areas that I tip as prime for investment

    • Urban regeneration areas – these are inner city locations, which had lost their appeal over decades with run down housing and industrial faces.  The industries are now being moved out and investment is going into infrastructure improvements.  Together with these quality residences are being built attracting large numbers of professionals looking for affordable homes.  As the profile of these areas increase, so are prices.  To name a few of these – Eyup in the historic peninsula of Istanbul, Gaziosmanpasa and Bomonti in the heart of Istanbul Sisli. Bomonti is an excellent example to talk about – 10 years ago, Bomonti was renowned for its unsafe streets and underdeveloped housing.  Ten years on and the area is now home to Europe’s largest Hilton Hotel and some of Istanbul’s most luxurious residences.  There is now a very trendy street life in Bomonti with lively bazaars and some of Istanbul’s  most trendy restaurants & clubs. Property prices have tripled in 10 years making early investors significant gains.  Compared to neighbouring Nisantasi and Osmanbey, which are Turkey’s most expensive post codes, property prices in Bomonti still have around 50% discount, which means in the forthcoming years and at this rate of re-gentrification, Bomonti will continue to deliver exceptional profits in the very heart of Istanbul.
    • International Finance centre in Atasehir – this particular area is a true winner. Since 2011 in the last 5 years average property prices appreciated in excess of 100% in this area and they are still rising.  One of the largest initiatives in Istanbul now is building of a new Financial centre, where major financial and legal organisations will move their operations, which are now spread haphazardly over a large area of Istanbul with major traffic problems.  The International Finance centre will create something similar to ‘the city of London’ but with better infrastructure and larger capacity.  Atasehir is in the centre of this development and will rip the benefits for sure.  The area has excellent infrastructure, including metro-underground networks, best of private schools and hospitals.
    • On the suburban parts of Istanbul, where prices are generally much more affordable, there is one area that I would recommend for future investment and that is Bahcesehir on the western European part of the city, The area merges green areas, lakes and parks with a very well planned residential profile.  Prices are currently very affordable, however, with the opening of a metro-underground station in 2018 prices will increase sharply as commute in and out of the city will be as quick as 30 minutes, now over an hour and very tiresome. In addition, a major motorway connection will connect Bahcesehir to the new airport in Istanbul (third Istanbul airport which will be the largest in Europe) under 20 minutes.  In brief, Bahcesehir is being developed as an elite, green and pretty residential area for city professionals to enjoy unlike its neighbouring areas such as Beylikduzu and Esenyurt, which have very high build density and very few green areas.  I would put my money in Bahcesehir now.  There are several very affordable yet luxury projects being developed, where the government has major stakes resulting in virtually no risk and a cap on prices during the development stages.  I would recommend these as must see investments for speedy capital growth in as little as 3-5 years.

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