Building on Turkey’s bullish economy and growing the country’s appeal to foreign investors are among key aims of Turkey’s newly elected President Recep Tayyip Erdogan – and a promising first half of 2014 would indicate the foundations are there for him to achieve this.
Foreign investors, including those tapping into Istanbul’s buy-to-let market as well as the second home sector, were not deterred by any uncertainty caused by the election in the first six months of the year. And now that Erdogan has become president, after an influential 11 years as Turkey’s prime minister, there is a new confidence in the country’s business and property sectors.
Sales to foreigners in Turkey, recently named the 45th most competitive market out of the world’s 148 most important economies by the World Economic Forum, rose 60 percent year-on-year during the first six months of 2014, totaling 8,507 purchases. According to the Turkish Statistical Institute, Istanbul alone recorded a 150 per cent increase in foreign investors, putting it ahead of the tourist province of Antalya, home to the resorts of Alanya, Belek and Kalkan. The average price of a new Turkish home was 12.05 percent higher in June compared to June 2013.
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“Foreigners invested a staggering $2 billion in Turkish property in the first half of 2014,” commented Julian Walker, director at Spot Blue International Property.“ Across all sectors, the period saw a 28 percent hike in foreign direct investment compared to 2013. This is a great confidence boost for the country, especially during a politically sensitive time. Erdogan’s election should help drive the real estate market further – it was under his term as PM that ownership laws became far more favorable to foreigners.”
In June 2014 alone, $990 million was invested in Turkey by foreigners, of which $416 million comprised real estate purchases. Buyers from the UK formed the largest group of foreign investors that month, pumping $464 million into Turkey. The second largest group were the Dutch, whose investments were worth $149 million.
Complementing his opening up of the property market, Erdogan is also credited with pioneering ground-breaking infrastructure projects, some of which will underpin foreign investment in coming years. Flagship projects launched under his governance include the new Marmaray tunnel in Istanbul, as well as the city’s third airport, set to be the largest in the world.
Meanwhile, Turkey is experiencing a bumper year for tourist numbers. Foreign visitors to the country rose 3.24 percent year-on-year in the first three months of 2014, reaching 4.35 million, according to Turkey’s Ministry of Tourism and Culture. And there was greater growth in the second quarter, so that between April and June tourist numbers grew 6.8 percent year-on-year, peaking at 10.9 million. In terms of revenue, tourism generated a record high of $8.9 billion in the second quarter of 2014, a 7.9 percent hike over the same period last year.