Investing in Turkey Real Estate, Meat or Just Stuffing?

  Date posted: 4th of December 2014

Many people ask us why they should invest in Turkish property, when they 'know' that real estate prices at home are flat or declining.  We thought you might find it helpful if we gave you the 'meat' behind buying property versus the 'stuffing' of most other investments, real estate or otherwise.

Where the Global Real Estate Market Stands Today

The United States and the almost total collapse of its overheated real estate markets has caused problems for the economies of many countries.  From Europe to the Far East to the Middle East, overly eager investors poured money into investment vehicles that were tied to the American real estate market.  These 'can't lose' investments did lose and they lost big.

The U.S. housing market is crawling out of its self-created recession.  The European Union is still trying to stabilize the economies of many of its member nations, many of whom invested large sums of private and public investment capital in U.S. housing market-backed investments.

In addition, there has been political unrest in countries including Greece and no savvy investor would ignore the 'Arab Spring' or the current Syrian crisis.

Other Investment Choices

The world's economy ultimately works from one finite pot of currency.  The amount of available money in this pot will increase based on economic growth or fall based on economic recession.  Because all investments are ultimately tied to this source, economic growth will mean that more investment money is available and access to that money is typically less restricted.

But, when the overall global economy stumbles, the investment pot shrinks and the money is much more difficult to access.  Without government intervention, interest rates rise quickly as the need for investment funds grows.  All investment opportunities are directly tied to these global factors.

Most investments, including mutual funds, stocks, index funds, etc. are all involved in this money pot.  The problem is that our connected global economy creates almost constant uncertainty in the markets and most conventional investment tools fall faster than they climb.  There's an old saying that the markets rise on news and fall on fear.

But, smart investors know a little secret.  If you can discover where the extremely large and sophisticated investors, such as pension funds, are putting their money and follow close behind them, you will see excellent returns on your investment.  These investors HAVE to keep their money growing.  They can't simply park cash in a savings account.

So, where is the big money going and why?  In a word, Turkey and Turkish real estate in particular.  But, why are large institutional investors pouring money into the Istanbul real estate market and other Turkish hot spots?  Let's take a look at the facts.

What's Up In Turkey?

Turkey is the economic exception to the rule and the big money knows it.  But, even the average individual investor can separate the meat from the stuffing, so what IS the meat surrounding buying property in Turkey?

First, the Turkish government is very, very smart.  They didn't buy into the hype surrounding U.S. real estate backed investments.  But, they seemed to see what was coming and they developed a plan to capitalize on it.  Known as the AKP, the controlling political party has been extremely active.  In a recent interview, Dr. Dave Cuthell, Executive Director of the Institute of Turkish Studies at Georgetown University used the word 'frenetic' to describe the pace of governmental support for domestic economic growth (http://www.americaabroadmedia.org/resources/education/turkey).

Turkish government officials worked hard and were able to amend their real estate laws and support of commerce and trade so that foreigners could own real property anywhere in Turkey and Turkish goods would find favor in foreign markets.  They correctly noted that when the global economy and that investment fund bucket shrank, large and small investors were going to need someplace to move their money and they wanted that place to be in Turkey.

Turkey also knows how to use its geographic advantage.  Information, communication and transportation between Europe and the Far East, its East meets West position, particularly Japan and China, has to have a clear stable travel path.  Because Turkey sits directly in this path, the Turks continue to build and maintain new and existing infrastructure to handle their role on the information and goods super highway.

And, the Turkish people seem to be enjoying their newfound economic prosperity.  Turkey's economy, according to a New York Time's article, grew at an annual rate of 8.5% in 2012, while the rest of Europe and much of the world would have been happy to simply show neutral growth instead of lost ground.

Young Turks are taking advantage of a focus on education and new-income and they are on a shopping spree.  In addition to buying primary and investment property in Turkey supported by low mortgage interest rates, GlobalPost.com reports that Turkish citizens are creating waiting lists for cars and developers can't build shopping malls fast enough (http://www.globalpost.com/dispatch/news/regions/europe/turkey/120411/meet-the-people-behind-turkeys-economic-miracle).  Turks are also traveling to exotic global destinations, further adding to economic ties between Turkey and the World.

The net effect of global 'super fund' investment and home-grown real estate buyers is that property prices in Turkey are rising and there is no reason to believe this trend will slow anytime soon.  The Istanbul  real estate market and the real estate market in almost every Turkish city and region is growing at a consistent pace. 

If you don't want urban investment, take a look at Turkey’s beautiful beaches and cities such as Bodrum, Antalya, Fethiye.  One rule related to beach property is globally universal.  There is only a certain amount of beach in the world, and almost everyone wants to live at the beach.  Use your beachfront investment as a rental with a local property manager and spend a few weeks in the sun yourself while your investment growth and rental income double your returns.

If a lot of smart people are buying property in Turkey and if the Turkish government has already shown its resolve to continue growing the Turkish economy, you probably don't need many more good reasons to allow us to show you the many Turkish real estate investments available to you, do you?

There is no doubt that real estate investment in Turkey has real meat.  The only real question is what types of furniture will you 'stuff' your investment property with?