Large companies already eyeing up Columbia

Large international companies are already starting to realise the potential in Colombia and investment firms are looking at property companies which will provide the best returns.

The feeling is that the property market there is about to take off and it's best to get in early to get the best profits. It's not just large property companies who are investing here as the world's richest man Carlos Slim already has major holdings in Colombia which are largely in oil and gas reserves, and has indicated he intends to increase these further.

There is an increasing demand for affordable and middle income housing within Colombia and with the rise of the middle class this demand will remain constant for quite some time to come. Colombia also has plans to integrate its securities exchange with Peru and Chile which will attract overseas investors and create more liquidity.

Colombia has a population of 45 million, and in common with so many other rising economies it is youthful. The country has managed to shake off much of its violent reputation through the institution of new security policies. These policies were put into place in 2002 and have reduced the number of murders by half and the number of kidnappings by 93%. Since then the country has gained confidence and has greatly strengthened its economy.

The economy is predicted to increase by 4.5% this year, and foreign investment in the country has quadrupled over the last decade. The current president plans to double government housing subsidies to the poor and middle class to boost the economy even further.

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.

Italian FM States Support for Turkish EU Accession

Italian Foreign Minister Franco Frattini has given his backing to full EU accession for Turkey, and criticised EU offers of partial membership deals.

Frattini told daily newspaper Il Giornale's politics and economy magazine Dossier Lazio that it was not right for Turkey to be offered a "privileged partnership" by some member countries instead of full membership.

Frattini went on to talk about the massive benefit that Turkey's EU accession could have on relations between the west and the Islamic world, which have fallen to tragic lows of late.

He said that as well as being seen as Islam, democracy and human rights in harmony, but that it would also be a testament to the EU's capacity to embrace different cultures.

"This is a significant historic target which we cannot give up," he said.

Staunchly supportive, Frattini was also quick to tow the party line, he said that Turkey had a long path to accession, and that currently that path did not look easy or promising. He said that Turkey's foreign policy preferences are causing doubts in some EU capitals, and urged Turkey not to give up on reforms.

Turkey should feel it has reached the finish line when it has fulfilled its present obligations, the Italian minister said, warning that it would be a grave mistake to alter the finish line.

Turkey became an official EU candidate in 2005, since then negotiations have moved at a snail's pace. Some now believe that Turkish membership is becoming as necessary for the EU as it is for Turkey, with the latter's greater growth and moves like the Nabucco pipeline.

On the flip side and for much the same reasons,EU membership has and is becoming less and less neccesary for Turkey, it would still boost the Turkey property market though.

Turkey Benefits from Eradication of Main Competitors

The excellent performance of the Turkish economy at present, alongside its solid fiscal status, is making the country a favourite with overseas property investors. When you compare the 11.7% growth in Turkish GDP in Q1 compared to the 1% in that of the EU, it is easy to see why. However, looking at the positive performance of Turkey is one thing, but you simply can't underestimate the importance of the eradication of its competition, due to their negative performances.

Greece

Take Greece for example. We all know that Greece is embroiled in one of the worst sovereign debt crises Europe has ever seen. Who would have believed we would have an EU country at risk of defaulting on its debts?

Worsening this still, the population has revolted against the austerity measures aimed at combating the runaway. This has disrupted tourism and led to warnings from the British Consulate and more. Them a terrorist group sprang up earlier this year threatening to target the tourism industry. There are buyers out there looking for bargains, which are still few and far between.

Cyprus

The south Cyprus title deeds debacle erupted when the world was reeling from the financial crisis. Needless to say Cyprus property sales to foreigners plummeted. Since other countries started to see recovery, North Cyprus saw court cases and foreigners losing property. Thus, sales are still struggling to recover across the country.

North Cyprus was Turkey's main competitor in terms of low property prices. So now with sales so low in Cyprus, where do you think all those low budget buyers are buying? That's right, Turkey.

Turkey Property Hotter with Removal of EU Hurdle

Some of you may have seen the article we had published recently in the Global Property Guide.

The article states 5 arguments why Turkish property is more popular as an overseas property choice now than it was during the boom, because it is now popular with investors as well as lifestyle buyers. But the main reason is not a reason per se, more the removal of a hurdle: EU Accession.

During the boom, investors looked at Turkey closely, but usually chose a country with a path to EU Accession closer to guaranteed than that of Turkey. As a result Turkey frequently lost out to countries like Albania, Montenegro and even Croatia.

But now, with Turkey’s fiscal situation, and economic growth potential far superior to that of the EU, accession to the Bloc is no longer such an investment gold star, and now Turkey is standing out as one of the best investment choices in the world.

It is widely held that the ratings agencies will soon give Turkey investment grade status, but already investors are heavily active in the country. A recent report highlighted that Turkish swaps were trading at the same price as that of Russia – swaps are what is sold as a hedge against a sovereign debt – this indicated that investors felt Turkey was as low a risk of default as Russia.

We wanted to post an expansion of this theory here in the hopes that it would spark a debate involving investors and buyers. Please leave your comment below.