Turkey to be Overseas Property Hotspot in 2011

Write About Property’s Liam Bailey has predicted that Turkey property will be the hottest overseas property investment in 2011. Bailey pointed out his surprise that he would do so, having been a staunch member of the “Turkey-needs-EU-membership” brigade until this year.

Bailey cited the excellent fiscal management by the AK party, which has focussed on paying down public debt even while its neighbours and competitors (Greece, Portugal, Spain) were running up huge tabs. On top of that, the banking reforms made after the Turkish financial crisis in 2001 left them able to withstand the crisis.

This left Turkey in a strong position when the crisis struck, because liquidity was high, and it was also able to lower interest rates as a measure of budgetary management rather than purely a alarmist way of fighting of the crisis. This calm, measured response increased the confidence of investors,

But, said Bailey, "what really sums up present day Turkey vis-a-vis worthiness as a property investment destination, with or without EU accession, is the great irony of Turkey ending its reliance on IMF assistance less than 1 year before Greece and Ireland would need such assistance.

"The balance of stability, high growth, high liquidity, low property prices and low interest rates is sure to make Turkey property a favourite with investors in 2011," he said.

Bailey said in other statements that Istanbul property was one of the top choices with pure investors, which are becoming more common in the Turkish property market, on top of the already strong holiday property market.

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.