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Istanbul: the 'perfect recipe' for recovery

Thursday, March 18, 2010

Source: Catherine Deshayes

Ironically not yet a member of the European Union, Turkey's biggest city, Istanbul which strategically straddles the Bosphorus Strait, holds the perfect recipe for kick-starting the recovery of the European property market according to the experts at Experience International.

Drawing on the fundamentals of successful property investment, supply and demand, Istanbul trumps many other European cities with an ongoing influx of some 400,000 new inhabitants each year yet an annual housing shortage of 250,000 units. This combined with the availability of mortgage finance for both domestic and foreign investors, low interest rates and minimal exposure to international credit markets has created a very appealing global real estate environment.

As Steven Worboys, MD of Experience International, comments, "Investors seek markets which hold real confidence; those which deliver not just in the short term but also long term gains. Many are cautious about investing in Europe, especially in 'PIGS' (Portugal, Ireland, Greece and Spain), however Turkey's banking system being heralded as "one of the strongest and least-leveraged in Eastern Europe" by Standard & Poor, who also recently upgraded the nation's credit rating, provides welcome reassurance. Something which many other European nations can take heed from."

The latest statistics released paint a promising picture for both for Istanbul and Turkey as a whole. Regular monthly index Redin.com reported a 0.49% property price increase in Istanbul in January 2010 and 116,000 homes sales were made nationally in Q4 2009, a substantial 25% increase compared to Q4 2008.

Investors can also smile as even more dramatic price increases, up to 40% according to experts, are forecast for Istanbul due to the city's status as European Capital of Culture 2010. Just as 76% house price increases were witnessed (Halifax Estate Agents, 2008) in Liverpool, Capital of Culture back in 2008, the positive impact of this accolade is highly anticipated by domestic and foreign property owners alike.

" Due to its strategic location we expect to see a positive knock-on effect for Turkey's European neighbours but the key to future success will rely heavily on the availability of finance. The recent support for Turkey becoming a "trusted European Partner" by Prime Minister Gordon Brown (16th March 2010) provides further encouragement that nation's EU membership is on track, another positive indicator for investor confidence" concludes Steven Worboys.

Source: www.istanbul-property.com