Izmir to Istanbul Superhighway Breaks Ground

The massive highway linking Izmir and Istanbul, which is one of the largest infrastructure development projects in Europe broke ground this Thursday,

"We are launching today one of the biggest projects in the history of our republic," said Turkish Prime Minister Recep Tayyip Erdogan at the ceremony.

The project includes a suspension bridge over the gulf of Izmir, which will be one of the biggest such bridges in Europe.

It currently takes 8 hours to travel between Istanbul and Izmir, this will be cut to less than 4 hours, and the distance will also be cut by 140k. This will be massively beneficial to the local economy.

Construction of the 11 billion TYR superhighway alone will create 60,000 jobs (10,000 directly and 50,000 indirectly), and the benefits will continue after its completion in 2017, as businesses can transport goods more quickly and cost effectively to the trading hub and ports of Istanbul.

Istanbul is the cultural centre of Turkey, and one of its biggest, most populous, and fastest growing cities. The benefit of transport links, and the ability to commute to find work in the city grows every day.

The highway will no doubt lead to increasing migration to Istanbul from rural areas, and this could easily push up the value of Istanbul property.

Of course the project alone will no doubt boost sales of property in Turkey, because it, along with many other projects announced and currently underway, shows that the Turkish government is committed, and investing heavily to improve the infrastructure.

Alanya Property Dominating Sales to Foreigners

Almost 25% of all Turkish properties sold to foreigners in the last five years have been in Alanya, according to local paper Alanya Adres.

Quoting figures from the Turkish land registry, the paper revealed that of 88,900 properties purchased by 100,623 foreigners from 44 countries in the last five years, some 17,000 of them were in Alanya.

Brits and Germans were most prolific, with the British buying most. According to the data some 30,710 Brits bought 21,321 properties in Turkey in the last 5 years, while 21.678 Germans purchased 26.365 properties.

It is always great to get hold of data like this from Turkey. The last data we saw came in 2006, when we learned that foreigners had purchased 5,556 units in Antalya Province (of which Alanya belongs) as of June 1st.

According to another recent report from the Turkish General Directorate of Land Registry, Brits now own some 6 million square meters of Turkish land, totalling 32,000 properties.

Alanya is home to the largest population of British expats, and surprisingly it is a very immature market with respect exposure to the overseas property market.

This is because Alanya is 90 minutes away from the Antalya international airport. Those who move to Turkey needn't care about such a small distance from the airport, but for those only able to spend short amounts of time in their holiday home, this would make them consider destinations much closer to an international airport.

Now that the airport at Gazipasa, just outside Alanya has opened and is currently being expanded to accept international flights, it is expected that developers will increase their focus on developing Alanya to the same level as many other Turkish towns.

Given the clear pulling power of Alanya property clear pulling power as displayed above, this is a very exciting time indeed for the town.

Thanks to New Home in Turkey for bringing this report to our attention.

Europe Needs Turkey as Much as Turkey Needs Europe Says Wulff

Europe "needs Turkey as much as Turkey needs Europe."

Not a statement you'd expect from the President of Germany, given the country's staunch and long standing objection to Turkey's accession into the European Union, but that is exactly what he said.

"We can complement each other in many ways and collaborate for the solution of problems in the Middle East Caucasus and the Balkans," said Wulff, Speaking at a dinner hosted by Turkish President Abdullah Gul in his honour at the Dolmabahce Palace in Istanbul.

He also said:

"Turkey is an important partner for Germany, one with self confidence. However there is yet much we can and must do to enhance the mutual understanding. Building the bridges and promoting the dialogue we aspire, through projects within the scope of the Ernst Reuter Initiative, is my personal desire and our common goal."

"Turkey, with its growing weight in the world, is a very important partner for us in climate change policies, in counter-terrorism, and finance market regulation. Therefore, I shall work within my full capacity to enhance German-Turkish partnership and brotherhood," said Wulff.

The statements came just a few days after a partial visa-free deal between Turkey and Portugal was announced. The deal will cover only citizens that hold a special passport, and will only allow travel for up to 90 days every six months. It still has to be ratified by parliaments on both sides.

These can only be called significant steps in Turkey's process of joining the EU. We have written many times on this blog that EU accession has become less necessary for Turkey in recent times, but we also agree with an article in The economist saying that while EU entry may be a long, long way off, aspiring and reforming towards it are good for Turkey and should continue.

EU Accession No Longer Vital to Turkey’s Interests

This week David Cameron called Turkey the BRIC of Europe, but still we expect no progress on the EU issue. This week French foreign minister Bernard Koucher pledged France’s support for Turkey, but still we should expect no progress on the EU issue. The EU will publish a review of Turkey’s progess towards joining the EU, we expect it to show little progress on the EU issue. Until France, Germany and others remove their block, which won’t happen until Turkey opens its ports to Greece, which won’t happen until and so on and so forth – suffice to say we are firmly in the land of deadlock.

But the fact is the Turkish economy grew by more than 10% in the first half of this year, and is predicted to grow 7.5% for the year as a whole, that is growth that Europe’s developed economies like France and Germany can only dream of.

According to a report by HSBC this week emerging markets will be on top of the world table of purchasing power parity within three years; three years during which they will drive the global economic recovery. Turkey was mentioned in the report as one of the biggest drivers of growth. Investment in Turkey is increasing at a rapid rate, including property investment.

EU accession is no longer vital to Turkey’s interests.

This is a common sentiment, in a Hurriyet Daily News article this week titled Forget the EU, RICHARD REID wrote:

In any case, Europe’s closed door may be irrelevant to Turkey’s general prospects. At the moment the country’s global image is one of rude health. Admiring eyebrows are being raised in the capitals that count. Turkey is no longer a minor player. Its momentum should before long carry it to a point where Europeans will be the suitors. And then Turkey can ask them to wait.

EU membership is “no longer such a big deal” for Turkey says Tolga OZCAN, director of Antalya real estate agent New Home in Turkey.

“The Turkish economy enjoyed double-digit growth in both the first and second quarters, with 11.7% growth in the first quarter and 10.3% in the second quarter, compared to growth of 0.7% and 2% respectively for the EU27,” he said. “During this time the biggest growth was recorded in Slovakia with 4.6% in Q1 and 5% in Q2.”

He continued: “On top of that the European banking infrastructure is in disarray, with severe doubts over exactly what levels of bad loans still exist in Spanish, German, Irish and other banks. Compare this to Turkey’s banking system, which, heavily reformed in 2001 is in incredibly good shape.”

Turkey is the BRIC of Europe Says UK PM David Cameron

In a message sent to an important U.K.-Turkish business event organized by the Turkish-British Chamber of Commerce and Industry (TBCCI), UK Prime Minister David Cameron has reiterated the party's sentiment that Turkey is the BRIC of Europe, in reference to the so-called BRIC economies of Brazil, Russia, India and China, grouped together as the world's fastest growing emerging markets.

Turkey is the "BRIC of Europe," he said. "Everyone is talking about BRIC countries and the rapid growth in [the group’s] economies of Brazil, Russia, India, and China. We think that Turkey is a BRIC country of Europe," Cameron said.

This is at least the second time that Cameron has voiced such sentiment in relation to the Turkish economy.

One would find it hard to mount a reasonable argument against him, in fact the figures make Turkey exactly that.

According to Turkstat the Turkish economy grew 11.7% year on year in the first quarter of this year and 10.3% in the second quarter. This is compared to growth of 0.7% and 2% respectively for the EU bloc, and 4.6% and 5% respectively for Slovakia, the fastest growing economy in the EU according to Eurostat data.

The BRICs were put together in that anagram by Goldman Sachs because they were and were likely to be the fastest growing emerging economies in the world. Turkey is without doubt the fastest growing economy in Europe, which means it can be called the BRIC of Europe without too much fear. Wonder if Cameron is pulling any strings to get it into the EU?

Nah, on a serious note, Cameron said that trade between the UK and Turkey could be doubled if both sides work hard on it in the coming years.

Turkish Property 3rd Most Searched for on Russian Portal

Number 1 Russian overseas property portal has published search data revealing that Turkey is the third most popular.

Experts say that the current dominance of low budget buyers is skewing the figures but I don't buy it. The data is based on the number of searches conducted by Russians currently searching for property on the portal, therefore it is inherently an accurate measure of popularity with Russian buyers. It is also confirmed by Turkish estate agents.

"British buyers are no longer the dominant force," says Aydin Cakir, director of New Home in Turkey. "We have been seeing Russian buyers overtaking them for some time and our findings are now confirmed by the 1-property.ru."

Before the crash, there was a lot of talk about the growing number of Russian buyers, and even of them overtaking British buyers in 2008. But then, despite many predictions that Russia would avoid recession, the global downturn struck Russia, and Russian buyers dried up just as British buyers did.

Now though, the Russian rebound is gathering pace as it once again becomes one of the world's hottest emerging markets. Meanwhile Britain is struggling to grow, and stuck in the quagmire of deep austerity measures. Millions of public sector workers are fearful of their jobs, as we know millions of jobs are to go, but no one knows when, how many and in how many chops.

Alanya is the top Turkish region with Russian buyers according to the 1-property.ru data, followed by Antalya, Belek, Kemer and Kusadasi.

The Fading Importance of EU Membership Boosts Turkish Property

The international financial crisis was a mortgage and housing market crash so spectacular that it crippled economies in most countries around the world. The boom that preceded was equally spectacular; so spectacular that it made people forget the cyclical nature of economies and house prices.

The boom was fuelled by a massive increase in overseas property investment, so-called fly to let, which in turn was fuelled by the advent and growth of budget airlines. New cheap flights opened up new destinations and made them accessible to the masses.

Turkey was popular with holiday home buyers and holiday home investors, but for the pure investors fuelling the real boom something was missing. That was EU membership.

Turkey has been an official EU applicant since 2005, but France and Germany have been staunchly opposed to Turkey's entry.

Now though, Turkey is booming while the EU is withering, and this is making investors readdress their position.

In the year to end the second quarter of this year Turkish GDP grew 10.3%. The EU grew 1%.

Turkish GDP grew 11.7% in the year to end the first quarter. EU GDP grew 0.4%

Turkey's budget deficit is under 5% and many EU countries are in real trouble bringing deficits of up to and over 10% under control.

This has made Turkish property a more attractive investment than that of Greece, Italy, Portugal or Spain, take Dubai out of the equation as well and you can see why Turkish property is currently getting so much press coverage.

Turkish Property a Hands Down Winner in Buyer Confidence War

Some of you will likely have seen our latest article to be published by Buy Association, in which we lay out why no country can match Turkey on its combination of strong growth and high security and confidence, and popularity (buzz).

Sure, we have Brazil, which is also generating massive buzz, and growing massively, and China, which, is of course the fastest growing economy in the world. And while the fight is a good one on which country will see the fastest growth in rents and property prices, in terms of buyer confidence, Turkey is a hands-down winner before the gate opens.

Before the credit crunch, confidence and stability paled into insignificance as the majority of buyers chased the biggest gains to Dubai as well as far flung and exotic emerging markets, hanging the delays of due diligence to "get in quick" and be the "early bird" that catches the worm. But we all know how so many of them paid for their folly. The buyers to emerge from this are obviously paying much more attention to security, stability and only buying where they feel most confident and safe.

Not many people are inspired by a feeling of safety when hearing the word China. Its communist dictatorship government, along with its abysmal record on human rights abuses, oppression and all manner of corruption, are a massive hindrance to buyer confidence. Not to mention fear that your property could be seized and even you arrested if you do something against someone in power's interests.

For a majority-Muslim nation, the determination of Turkey's secularism is surprising. Since the coup of 1980, the country has reformed into a fully democratic secular nation. The performance of the current AK party and its history of successful reform is a great booster of confidence among foreign investors.

Brazil’s problem is its massive crime rate. Its murder rate of four times that of America puts a great dent in foreign buyers' confidence.

Turkey’s Islamic based law system is harsh, and as a result the crime rate kept low.

In fact, unemployment is Turkey’s main hindrance and even it is currently falling. Still, compared to the problems of China and Brazil, Turkey’s has a minimal impact on confidence.