Historically, property investors watched prospective EU members with anticipation. Often targeting markets that were expected to gain full EU membership, savvy investors would benefit from the subsequent up lift in prices. Turkey has long been on the verge of membership to the EU however many would suggest it never really stood a chance of gaining full membership due to objections from the likes France and Germany.
Now the EU’s economy is caught in a deep sovereign debt crisis with two of its members, Greece and Ireland forced to accept huge bail-outs. Not only must both of these countries borrow more money to service their debts but they both face ongoing austerity measures. While the general appetite for property in Europe has reduced significantly, one such measure has directly affected Greece’s property market in particular. The country has placed new taxes on high-end property, causing owners to sell en-mass while new buyers remain few and far between. Portugal has been advised to implement similar taxes.
As a result, property investors have snubbed the debt ridden EU nations in search of better performing markets and greater value for money. While Turkey now stands in a position where it could gain membership much more easily, the tables seem to have turned as investors care less about EU membership and Turkey reaps the benefits of its exclusion.
While GDP growth improved in the EU during the first 6 months of 2011, it only reached 2.5% while Turkey impressively recorded 11% to become the fastest growing economy in the world. The Economist published that Turkey will soon surpass Germany as one of Europe’s top performing economies.