turkey property

I have been following the progress of the Turkey property, and in particular, the Istanbul property market, for a number of years now. Istanbul is one of the fastest growing emerging markets in the world. There are clear economic reasons for continued growth in the future.

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My aim was to wait until mortgages were available to foreign investors before entering the market personally. With the recent availability of 65-70% LTV mortgages investors can now benefit from the use of leverage in a rapidly growing economy.

I was waiting to find a development that was located in an area of excellent rental demand. The proximity of the development close to the airport, Formula one racing track, and two universities makes it a hard location to beat. Property values increased by 33% last year and similar figures are set for the future due to the availability of mortgages to the local population.

Turkey has an expected GDP of $382 billion, furthermore over 45% of the economy is currently un-accounted for so this figure is likely to be much larger.

Turkey has also been ranked among the top 7 emerging markets. PriceWaterhouseCoopers regards Turkey a faster growing emerging market than China, India and the rest of the E7 countries.

The economy and political climate of Turkey is more stable than ever. It has been a member of the UN since 1945 and a member of NATO since 1952.

Furthermore Turkey has a closer economic and political relationship with the EU than any other non EU country hoping for admittance.

Capital costs covered - the yields have to be the biggest attraction in Istanbul.

· One-bed apartment in area: average of £420 yield – return on current prices 10%

If we assume a mortgage of 70% on property including a furniture pack then the repayments would be:

· One-bed apartment: £337 per month based on 15-year full repayment @6.15% sterling mortgage

So this covers costs and pays off the capital, while at the same time growing in value!

We are so confident on the rental market in the capital that we shall give a two year rental guarantee as well on our developments!

1. Retail growth. Europe's largest mall opened in Istanbul in November 2009, near the centre of Istanbul’s European side. Occupying 495,000m2 with 175,000m2 of leased retail area, it is expected to attract 25m visitors a year and in the first six weeks, had more than five million visitors.

2. Economic Growth. According to a European Union economic report, Turkey will become the fastest-growing country in Europe in 2010, with a 2.8% growth rate.

3. Tourism Growth. Tourism grew 1.47% in Turkey while at the same time was shrinking 7% in the world in the January-July period of 2009, according to the World Tourism Organization (WTO).

4. The tour operator’s choice. Turkey, Egypt and Mexico top the list of the top ten hottest holiday destinations in 2010 predicted by Thomson and First Choice. Thomson and First Choice say they have ‘significantly’ increased capacity to Turkey as the country offers good value for money.

5. Banks boom in Turkey without government aid. In Turkey, bank profits have risen more than 40% in the last year. At first glance that might not seem exceptional – after all, profits have surged at US banks too, spurring a stock market rally that has wiped clean most of the losses from last year's economic meltdown. But there's a difference: Turkey's banks posted those profit gains without any government assistance. Profits for the entire Turkish banking industry totalled $10.5 bn for the first nine months of last year, according to government data. At a time when the recession has hammered many European banks, Turkey's financial institutions have weathered the crisis remarkably well. The Turkish government restructured the financial system, boosting the banks' capital requirements and raising the mandated ratio of capital to risky assets to 12% from 8%. Another difference: Turkish banks had almost no exposure to subprime loans or derivatives. The result is that Turkish banks now have some of the world's strongest capital structures. Those capital reserves, and the absence of risky lending practices, helped shield them when the recession hit. For example, Garanti Bankasi, one of the country's largest lenders partially owned by General Electric, maintains a capital ratio of almost 18%, according to the bank's financial filings – far higher than most US banks.

6. Moody’s Investors Service has just upgraded Turkey’s government bond rating to Ba2 from Ba3 last month, reflecting the rating agency’s growing confidence in the government’s financial shock-absorption capacity. Fitch moved late last year to put Turkey on BB+. Although analysts think this should be increased further. read on… Timothy Ash, an analyst at Royal Bank of Scotland, said: “It’s a bit disappointing that Moody’s only moved one notch, as this still leaves Moody’s rating of Turkey one notch behind Egypt, which I have long failed to understand… answers on a postcard as to why Turkey should be rated behind Egypt. Obviously Moody’s was ‘inspired’ by the hugely successful eurobond issue earlier this week ($2bn placed, and $7bn in orders). Clearly, investors are voting with their feet, irrespective of the views of the ratings agencies.”

7. Rents are increasing. The world’s most expensive office markets got a little cheaper last year, but Istanbul, Turkey’s most populous city, was among the few cities in which office rent expenses surged. More than 130 cities worldwide experienced declines in rent expenses in the year ending 30th September, according to a report by the CB Richard Ellis Group. Istanbul ranked among the top five cities in which rents increased most, with 9%. Office rents in Aberdeen, Scotland rose 12.3%, while rents in Rio de Janeiro increased 12.1%.

8. Turkey Stock Market going well and on for record. Turkey’s stock index, lifted by a Fitch Ratings sovereign-debt upgrade, may test its record after support at 45,000 provided a ‘powerful springboard’ for a gain of as much as 27% by the end of 2010, according to Auerbach Grayson & Co.

As you can see, this country – and Istanbul particularly, are in a very good place, economically sound and growing, while many others are struggling. We’ve been watching the market for some time and we are delighted to have a new opportunity ready to launch very soon – to register your interest to be sent the investment pack 48 hours before general release – please reply to this email!

Istanbul is a city with massive growth potential for the future. It is the financial capital of Turkey and is split in half by the famous Bosphorus river. Major multinational companies have relocated their workforce to Istanbul due to its strategic position as a bridge from the eastern to western world.

The demand for residential units in Istanbul is massive with a shortfall of 250,000 units per year - and this reason alone means when looking at the Turkey property market, Istanbul should be the first place to target. Land prices in recent years have grown at a tremendous rate due to the restricted availability of residential land to developers. A large number of multinational commercial developers have entered Istanbul in recent years.

The Dubai based investment group Sama Dubai made a $705 million dollar investment in commercial land in Istanbul alone. Istanbul has a buoyant rental market for mid market property, and the potential for even further capital appreciation is predicted due to the recent availability of mortgages to the local population. The opening of mortgage markets is a crucial indicator for growth in most emerging markets.

Residential values grew by 20% in 2006/07 and 2008 and similar figures are set to continue in 2010/2011. Due to the chronic shortage of housing stock in Istanbul the demand for housing is at an all time high. The growth in capital appreciation will be further accelerated by the ready availability of mortgage products to the local market, this will make the possibility of home ownership available to a much wider population - so this is the time to enter the Turkey property market!

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Turkey Property