Turkey was popular with holiday home buyers before the crash. And many of those buyers hoped that rental income, capital growth or a combination of the two would also make their holiday homes good investments.
However, Turkey never really became as popular as it could have, because many of the pure investors favoured countries that looked more likely to get into the EU, but now Turkey is excelling. Here are five reasons why Turkish property is more popular with overseas property investors today than it was during the boom. While officially these are in no particular order, they are arguably in order of their importance to the subject.
1. European Union accession. Then: Unlikely. Now: Unnecessary
During the boom Turkey lost out to places like Albania, Montenegro and Croatia, which had a comparatively smoother and seemingly easier path to EU accession.
Now, EU membership for Turkey would be looked upon as more than a curse than a gift. Across Europe now and for the foreseeable future, Turkey is where the growth is. In the first quarter Turkish GDP growth was 11.7% year on year. EU GDP grew 0.5% during the period, when the closest second was Slovakia with a growth of 4.5%, less than half that of Turkey.
One of the main reasons for the strong growth is the liquidity maintained in the Turkish banking system, because Turkey made banking reforms during its unilateral crisis in 2001. This liquidity is another reason for Turkish property being a brighter investment -- no brighter than it was but standing out as brighter than a liquidity-barren Europe. To property investors liquidity is read as mortgage availability and affordability.
3. Fiscal condition
Turkey is also in great fiscal shape, and is constantly reporting positive macro-economic data. While EU countries struggle to pay down budget deficits and debts, Turkey is running a budget surplus, which stood at US$5.1 billion in May this year. Because of the liquidity and economic growth, Turkey can only build on its recent policies of fiscal responsibility, which should see it achieve investment grade rating from ratings agencies in the near future -- as analysts are predicting.
With many countries in Europe having been downgraded, many facing a downgrade, and some even having been downgraded and facing being downgraded again, Turkey is standing out as the place to
This is all increasing confidence in Turkey, at a time when confidence in the EU, and particularly Turkey's main competitors Greece, Spain, Italy and Portugal are at an all time low.
5. The complete package
Of course all this is on top of an already powerful Turkish package offering 300 days of sunshine per year, great beaches, massive and growing tourism and a rapidly developing infrastructure. The package that has long made Turkey the chosen destination for low-budget holiday home buyers, now coupled with a powerful investment package, is why Turkish property investment is bigger now than it was during the first and biggest overseas property investment boom.