Turkey property market

As a whole, Turkey's property market has been previously dominated by the necessities of providing cheap housing for a young and rapidly growing urban population.

However, shortly after the introduction of new government laws enabling foreigners to buy land in Turkey, the real estate market has rapidly attracted the interest of European buyers. These new laws and Turkey's progress on adaptation to the E.U has made the proposition a lot more attractive. Although interest from overseas buyers and investors is currently focused almost exclusively in areas that lie along the Aegean and Mediterranean coast, the demand for holiday homes is fuelling an unprecedented building boom. As a result, property prices are rising rapidly.

Even though Turkey is in the early stages of a significant property boom, prices rose by an average 52% over the last 12 months in the coastal areas. All indicators show that this is just the beginning and prices are expected to rise sharply over the next 5-10 years.

The growing numbers of overseas investors are buying property for the holiday lets. As a result, the rental market is strong as more and more people are turning their backs on tour operators and large hotels in favour of organising their own holidays in their own space.

Rental yields are between 5-10% per annum, although returns are limited by the length of the holiday season and the market is still very small in overall terms. Recent legislative changes, which relaxed restrictions on where foreign nationals can buy property, have also encouraged demand. As a result of this, property prices are rising rapidly, particularly in certain enclaves where there's specific foreign or domestic interest.

A very good example of such as area is Kalkan. It's a popular resort by UK holiday makers and has a large expatriate community. In some developments, prices have doubled over the past three years. Other areas such as Cesme have risen by 50% in a couple of years.

The Bodrum Peninsula is another area which is popular with both foreign and Turkish buyers, and it has excellent potential for rental income and capital growth. Overall, price increases look set to continue in most areas, with competition for desirable properties also becoming a more important factor.

Turkey is one of the least spoiled countries in Europe, surrounded by crystal clear seas, long and sandy beaches, and spectacular mountains and rivers. Therefore, be it a villa with a pool in Fethiye, an apartment in Antalya, a flat in Bodrum or a house in Marmaris, Turkish property currently represents fantastic value for money.

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