Turkish homes

We have, it seems, had enough: record numbers of people left the United Kingdom last year to start new lives elsewhere. According to recent figures published by The Office of National Statistics, an alarming 400,000 people permanently fled these shores last year, over 200,000 of who were British citizens. And if the word – and indeed the mood – on the street is to be believed, then there are a slew of people eager to follow them. Sir Andrew Green of Migrationwatch admitted that “the number leaving [the UK] had doubled under this government” and there is precious little to indicate that this trend won’t continue, let alone snowball.

But why does this running to the hills – or at least running to the beaches, golf courses and wide-open spaces – look set to continue unabated? Well, the reasons are varied, but those cited often include the dreadful weather, the ballooning crime rate, stealth tax, rampant political correctness and, rather ironically, a huge increase in the number of immigrants. Sir Andrew Green pretty much summed it up when he said “quality of life is a large part of it, along with economic opportunities elsewhere”. Broadly speaking we want to be happy and we want to have more money. Sadly, in the UK, many of us are falling short in both respects.

And when we get out, where do we go? The majority of us will head to one of five places: Spain, France, Australia, New Zealand or the United States. Traditionally we have tended to feel as if we know these places, regardless of whether or not we have been to them. This security and level of comfort is some attraction, as is the hotter weather, the price of property and the (in the main) less stressful atmosphere. But, slowly, things are changing. The problem with these places is that their popularity has caused house prices to fatten and those of us with an eye for a bargain are starting to turn their attention elsewhere. As the world shrinks – metaphorically you understand, not literally – and we become braver, the places we buy homes in becomes increasingly varied. We are looking towards more exotic, less well-known places – places where the muscular British pound carries considerable clout. Not only are these areas phenomenally cheap, they also bring some excitement: Eastern Europe is enjoying a popularity hardly imaginable a decade or so ago; pockets of Asia are showing enviable investment potential; even parts of Africa are drawing considerable interest. Chief among these gems however, is Turkey. For those of us with a keen involvement in the property industry (and I’m aware there are lots of you out there) this is perhaps not groundbreaking news. Turkey has undergone a dramatic renaissance, particularly over the last five years. What is quite astonishing however, isn’t necessarily the level of growth that many of us have witnessed; it is that this level of growth, in many areas at least, is refusing to reach any sort of plateau. By all accounts, Turkey is one for the future.

Rather significantly, Turkey straddles two continents and as such has a unique, heady blend of Eastern and Western culture and tradition. Much of it is well integrated into Europe and yet it still retains and fosters a relationship with the eastern world. Being so strategically positioned has meant that it has endured a rather chaotic past, but now it is a stable, democratic, pleasant country. Roughly speaking it is split into seven geographical regions: Marmara, Aegean, Black Sea, Central Anatolia, South Eastern Anatolia and the Mediterranean. It has rugged, spectacular landscapes shaped by dramatic earth movements over thousands of years and areas are still prone to earthquakes and volcanic eruptions. The central Anatolian Plateau is subject to extreme fluctuations is temperature, getting down to –40 degrees centigrade during the severe winters. Generally though, it has a very favourable climate with temperatures hovering around thirty degrees for much of the summer in the west. But it isn’t just the weather: it has a wonderfully diverse cultural climate, beyond friendly locals and, for both the investor and holidaymaker alike, a stunning array of very reasonably priced property.

Last year over 25 million people visited Turkey and it is estimated that this figure will swell by 25% during 2008. After a period languishing in the investment wilderness, the country is well and truly emerging from the shadows: according to figures released by the Turkish government, foreign investment stood at $1.3 billion last year, with the bulk of the investors hailing from the UK, Ireland, Germany and Canada. The super canny investors began sniffing around several years ago and it is believed that the number of properties owned by UK citizens trebled between 2003 and 2005. Not that Turkey has had it’s day; not by a long shot. At the time of writing it is experiencing unprecedented exposure and many commentators are dubbing it “The New Spain”. The tourist market is booming and the reasoning is that so too will the property market. Prices stand at the same level Spanish properties were at a decade ago, and since then prices in Spain have rocketed by a mighty 300%. Those with a vested interest are hoping that Turkey will follow suit. And it well might. The government is investing heavily and the economy is growing stronger by the day; infrastructure is improving markedly and press coverage is favourable and widespread. Moreover, it looks like it will one day gain ascension into the EU: formal accession negotiations began in October 2005 and it is expected to be formally accepted within the next decade.

Most of the smart money is, unsurprisingly, headed to the coast, with the property boom being concentrated along the Aegean and Mediterranean seas, in particular the fashionable Bodrum peninsula, Dalaman, Fethiye and the seaside towns of Kas, Kalkan and Altinkum. Naim Pektas, managing director of Place Overseas, who specialise in Turkish property pretty much echoed this, reckoning the best places for investment were Bodrum, Antalya and Fethiye. “Here” he told me “we have seen exceptional growth, with appreciations reaching 30-40%”. Which is extraordinary really, when you consider that you can still pick up a two-bedroom apartment in Bodrum for around £50,000. And he reckons the market shows no sign of slowing, estimating that the growth could well continue for “the next ten years”. If the majority of reports are anything to go by, then places in the majority of coastal reports are considered to have doubled in price in the last two to three years.

Naturally, like anywhere, the news isn’t altogether encouraging. For a start, one of the main accusations levelled at Turkey is that there is a discrepancy between the number of people who want to travel there and the number of cheap flights available. It doesn’t have the number of cheap affordable and regular flights that are available to, say, Spain, France or Italy, but certainly in that respect things are improving. Low cost carriers are beginning to provide regular services to Istanbul and coastal resorts and with the continuing influx of visitors, this looks like it will only get better. Another potential problem too is one of “flipping” – essentially this is when property speculators sell off-plan contracts before the development is complete and head off to somewhere they consider riper for investment. Many claim that this causes house prices to stagnate or even fall, but if it is a genuine problem it is a genuine problem with any sort of investment opportunity and the massive growths predicted for many areas of Turkey mean that it will be significantly contained. A final hurdle that is often muted is one of rentals. Due to the relatively irregular number of flights, many consider Turkey to be at the lesser end of the rental market. From the people this writer spoke to, this isn’t really the case. In fact, both private investors and those promoting Turkey were keen to point out the healthy rental market. Many were keen to highlight the impact of golf – there are plenty of decent courses in the coastal areas and they’re cheap too: the average cost of a round in, for example, Antalya is about 40 euros, where-as in much of Europe a golfer would expect to pay at least double this.

So, in a sense, even the bad news is good news. And there’s more: as of January 2008 proper mortgages rather than home loans will become legal. This, combined with the residents of Turkey having the lowest debt per person in Europe means that home ownership is expected to rise three-fold by 2015. Not only that, but the buying process is considered extremely secure as the whole process is overseen by the military. As the population (currently standing at about 70 million) is expected to swell by three million within the next two years, it is difficult to see where you could go wrong. The population in Istanbul in particular is estimated to rise massively, and with swanky one-bedroom flats going for around 60 grand in the city, it is a decent investment alternative if you don’t fancy the coastal areas.

Potential investors then better be quick: this is being written hours after England’s football team failed to qualify for next year’s European Championship and there are lots of people without a team to support next year. With that in mind, it could be a good time to visit Turkey: you may well end up coming back with a second home, a strong investment and a new football team to support all in one. You never know, your new team might even win it.