Foreigners stuff billions into Turkey property

Turkey foreign investment tourism

Photo credit:  Victor Radziun

Over $1.3 billion were stuffed into Turkey's property market last year.

The figures, released by the Turkish government, show that foreign investors are still keen to own a share of the country's booming real estate industry, as Turkey becomes one of the biggest success stories of recent years.

Fuelled by a highly successful tourism industry, Turkey's economy has sky-rocketed, much to the delight of property investors. At present, Turkey ranks seventh in the most-visited global destinations list, according to the UN World Tourism Organization (UNWTO). Since 2000, Turkish tourism operators were able to record the first noteworthy increase in tourist numbers, resulting in an impressive 10.4 million visitors that year. From then on, Turkey has experienced consistent growth in its inbound tourists leading the country to reach an incredible 28.63 million visitors in 2010.

Today, the tourism sector continues to grow and is a primary contributor to Turkey's national income and success on the global stage. Indeed, increased tourist numbers over the years certainly contributed to the 11 per cent year on year economic growth seen in Q1 2011, with Istanbul seeing a 30.1 per cent increase in tourist revenue in 2011, helping Turkey's capital to become the 34th richest city by GDP in the world.

Recording better growth than any of the largest emerging markets in the first quarter of this year, Turkey's $735 billion economy grew 8.8 per cent in the second quarter, developing faster than India and more than four times the speed of the Eurozone's expansion. And, with the help of ever growing tourist numbers and credit growth prompting rising consumer demand, Turkey has been experiencing the best year for takeovers since 2008 with the value of transactions involving Turkish targets rising by 59% annually to $8.8 billion.

At present, there is a shortage of homes across the country, especially in urban areas such as Istanbul, which is currently on the receiving end of huge internal migration. With this in mind, the projected demand of 2.9 million houses by 2015 has led investors into the lucrative Buy-to-Let world where there is high demand for good quality rented housing in Istanbul and surrounding areas.

Ray Withers, Director of Turkish property investment experts Property Frontier, comments: "It seems everyone wants a piece of Turkey. Certainly, for investors, the Turkish government's plan to make the tourist industry reach 15 per cent of its GDP by the year 2020 will be a big attraction.

Currently, the Turkish property market is underpinned by a strong economy with a growing tourism sector, and savvy Buy-to-Let investors understand that this can be converted into solid rental yields. We at Property Frontiers have recognised the growing potential of Istanbul as a lucrative property investment hub presenting not only one of the best opportunities for property investment but cheaper property price tags than the rest of Europe."

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