Turkey is now the second most popular choice among Russian buyers according to a survey conducted at a major Moscow property show.
Leading Russian overseas property magazine International Residence conducted the survey of 499 Russian buyers at the Moscow International Investment Show in March. They found that Turkey was the third most popular country among Russians looking at overseas property, beaten by Bulgaria in first and Spain in second.
Other findings of the survey were that 49% planned to buy in the next 12 months, 66% were looking for apartments, and 53% were buying for lifestyle reasons compared to 12% looking to make an investment. The survey also found that 40% of buyers were looking to spend between 100,000 Euros and 250,000 Euros, a higher percentage than has been seen at previous shows.
Bulgaria and Spain’s popularity with Russian buyers comes as no shock. From the first reports of Russian buyers becoming an increasing force in the overseas property arena, Bulgaria has always been listed as one of their favourites, and Spain as another. Turkey however is a newcomer to the favourites list of Russian buyers.
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Let’s face it: Turkey is a big newcomer to many such charts. Sure, Turkey property has seen its fair share of buyers since its market was first opened to foreigners in 2002, and this number increased in 2005 when provincial restrictions were removed, but it is only since the crash that Turkey has really come into its own.
This is clearly displayed in the recent figures from the Turkish Association of Real Estate Investment Companies, which recorded a 40% increase in purchases of Turkey property by foreign buyers in 2010. Perhaps more significantly the report showed $2.5 billion worth of such sales in 2010, which is almost as much as the $3 billion recorded in the 2 years 2006-2008 put together.
The reason for this popularity comes down to a very powerful package: A strong and stable economy with a strong and stable banking system combining to present an environment of high liquidity and low interest rates, not to mention the booming tourism industry as more and more people fall for Turkey’s sun, sea, sand and friendly people year on year. This package is making the country attractive to holiday home buyers, holiday home (fly to let) investors, and even residential (buy to let) investors. There are also reports of private buyers investing in student accommodation in Istanbul.
The British economy is still in a lot of trouble as the government struggles to find a terse balance to the political and economical arguments of all sides as it tries to navigate the country back from the brink as one of Europe’s most indebted countries, to a path of stable growth and prosperity. In short, it will likely be a while before British buyers are anywhere near as dominant on the overseas property scene as they once were.
Meanwhile Russia is one of the world’s hottest emerging markets. It is estimated that the Russian market is now worth $12 billion per year to the global overseas property industry. It is a fair assumption that Turkey’s increasing popularity with Russian buyers is in no small part responsible for the huge increase in sales to foreigners in Turkey last year.