Confidence in Turkey’s property market has received a boost at the start of 2014 after the country was identified as a future global powerhouse by an economist at investment bank Goldman Sachs.
Turkey has been included in a group of four countries highlighted as emerging economic stars by creator of the BRIC nations, economist Jim O’Neill; the other three countries are Mexico, Indonesia and Nigeria, which together with Turkey are the ‘MINT’ economies.
At the same time, Turkey has been forecast to become the 12th largest economy in the world by 2028, according to the latest World Economic League Table (WELT) by the Center for Economics and Business Research (CEBR), a leading economic analyst. Currently the 17th largest economy, CEBR predicts that by 2028 the country’s annual Gross Domestic Product (GDP) will be $3.46 trillion, compared with $822 billion at the end of 2013. Turkey emerged as one of the fastest growing economies from the global financial crisis, achieving growth rates of 9.2 and 8.5 per cent for the years 2010 and 2011 respectively. Having grown by 2.2 per cent in 2012, the country’s economy grew by an average of four per cent in the first three quarters of 2013.
“Much of Turkey’s economic growth is based on its geographical position, bridging East and West, and the access it has to Western European markets,” said Julian Walker, director at Spot Blue International Property. “It also has relatively low labour costs and favourable demographics, and as patterns of world trade change, the commercial prominence of Istanbul in particular will grow, making Turkish property an appealing proposition to foreign investors.”
Highlighting this, Jim O’Neill told the BBC in January: “In 2000, per capita income [in Turkey] was just over $3,500 a head but today it’s nearly trebled and you can see this growth and the fruits of it all over the place. In the [Istanbul] business district, there are huge skyscrapers, new apartment buildings, lots of shopping malls – all symbols of this huge growth. The city is soon going to have the biggest airport in the world, there’s a third bridge going over the Bosphorus and what’s more, there are no signs of Turkey slowing down.”
Meanwhile, Turkey is ranked sixth – three places above the next European country, Germany - in the latest House Price Index compiled by an international property consultancy. According to Knight Frank’s quarterly index for the third quarter of 2013, house prices in Turkey were 12.5 percent up compared to the same period last year, proving property in Turkey remains a sound investment.
Much of Turkey’s price growth during 2013 has been in Istanbul, where demand for new-build residential properties is growing, fuelled by investors from the Middle East.