We appreciate many of our posts on European property portray a negative outlook – thankfully we can report that Turkey’s property market is booming and many British investors are taking the opportunity to buy their home in the sun in the country. Despite the country’s modest economic growth Turkey is one of Europe’s best performing property markets in Europe and the year to Quarter 2 2015 saw a price rise of 18.96%.
Turkey has become increasingly popular for British and Irish tourists. The country is easily accessible with budget airlines operating regular routes. The diverse culture and climate make it extremely attractive and a nice change from our regular holiday haunts.
Economists attribute this house price growth to both positive socio-economic fundamentals, as well as excessive optimism in the market. Likewise, buyers see current house price inflation as a rational course of market expansion. The other perception among buyers is that housing is the best possible investment. The narrative goes that “house prices will always go up.”
These property price increases however follow arguably the biggest property crash and economists are concerned that Turkey’s excessive property value increases are a case of deja-vu and that a bubble is being created.
With the previous crisis triggered by rising indebtedness, ever-growing prices, extensive construction levels and the belief that prices always go up economists believe the government must act to curb the current constant high rate rises. Adding to those factors listed we need to also consider Turkey’s geographical location bordering countries at the heart of a worldwide issue in ISIS and terror related activities. This will bring uncertainty to the country and economy aswell as property market.
From an EU Property Solutions perspective it is concerning that countries in Europe are not learning from previous experience. Many will be looking to make a quick pound but in the long term it will be those entering the housing market at this time who will suffer mortgage debt and negative equity.
If you are looking to invest in Turkey be aware of the current market conditions and do your research into the potential changes and market correction procedures which may be adopted.
Should you wish to discuss any European property debt matter please call EU Property Solutions today on +44 (0)330 1241230 to arrange your free initial consultation.