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This blog post is the ultimate guide to investing in Turkey, if you have any questions regarding investing in Turkey, please contact us. Kingsman Estates is your ultimate way to enter the Turkish property market.
Country Profile Of Turkey
Climate And Geography Of Turkey
Turkey is located at the intersection between Asia and Europe. Geographically, the Asian territory of Turkey is referred to as Anatolia, while the European side is known as Thrace.
Turkey’s geostrategic location has contributed immensely in terms of the country’s history, politics, culture and continues to be a pivotal factor in our contemporary world. Towards the northwestern border, Greece and Bulgaria share a border with Turkey, and in the East, Turkey borders Georgia, Armenia and Iran. In addition, Iraq and Syria are located on Turkey’s southern borders.
In the West is where the Aegean Sea lies, and on the south, the Mediterranean. Towards the North, we have the Black Sea. The Aegean Sea and the Black Sea merge through the Bosphorus and Dardanelles, commonly known as the Turkish strait.
The maritime climate on the Mediterranean coast is hot and dry during the summer months, warm in spring, while the winter season can be surprisingly chilly, albeit with a limited (if any) number of snowy days. Inner Anatolia, or the continental climate, experiences much harsher weather conditions during the winter, and plentiful snowfall. On average, the hottest months of the year are July and August, and the coldest months are January and February.
Economy And Currency
Turkey has been under the spotlight of many international investors since the 1980s due to the significant and consistent growth rate it has attained. There are three notable factors contributing to this growth rate.
- A sectoral shift from the primary sector, dominated by agricultural activity, towards the secondary and tertiary sectors, primarily financial services, manufacturing and industrial activity.
- Improvement and modernization of the existing industrial activity
- Ameliorated economic links with the world, triggering an additional increase in the international trade
These factors together enabled Turkey to become the 13th largest economy in the world, and 5th largest among the European Countries. To quantify further, the GDP of Turkey was 236 billion dollars in 2012 and in 2017 it boasted a record of 850 Billion Dollars.
When it comes to the annual GDP growth between 2003 and 2020, Turkey has outmatched similar economies in Europe. The Dynamics that caused this growth momentum is still active in today’s Turkey.
When it comes to Turkey’s exports, in comparison to the rest of the world, it can be seen that Turkish exports are growing at a rate of %11 annually. This growth rate is higher than the world performance and to quantify, annual export volume has increased to 171 billion Dollars from 36 billion Dollars over the last 17 years alone.
Turkey has a population of 83 million as of 2020, of which young adults comprise the majority. The fact that Turkey holds huge potential with its youth, makes Turkey a great place to invest especially in the real estate sector. As the youth graduate and enter their career lives, they will be looking for homes. Property prices in Turkey are constantly on the rise due to this fact of constant high demand, brought about by the young professionals across Turkey, particularly in financial hubs like Antalya and Istanbul.
Over the last 20 years, the construction sector has been one of the leading contributors to the Turkish economy. After the 2008 financial crisis, the real estate sector has been mediocre in Europe and America. The Turkish real estate sector however, has been seeing steady annual price growth between %10-%15 per year depending on the location and property. Without a doubt, there is a huge amount of intellectual gamesmanship that goes into spotting the right properties in Turkey. So to find out more, please contact us and our dedicated team at Kingsman Estates Investor Centre will be more than willing to help.
Furthermore, the Turkish government has made huge reforms when it comes to property ownership of international investors in Turkey. These reforms in property title registry law, mortgage law and the initiation of citizenship by investment programme in Turkey has made the Turkish property market not only a lucrative and competitive opportunity nationally but internationally as well.
Main Reasons To Investing In Turkey
Rapidly Developing Infrastructure
Turkey already has a fantastic infrastructure with airports in nearly every city, most prominently the last edition of the Istanbul Airport, which is the biggest airport in Europe. Turkish air transport is at its peak and will continue to develop rapidly in the future.
Other infrastructure components like communications and roads are at a satisfactory level and are constantly being upgraded and expanded. 5G communications technology is well underway and it will be available after 2022.
Low Income Tax Rates
Turkey has incredibly competitive income tax rates among the European countries. The full explanation of the tax system is beyond the scope of this post however, to give an example, the corporate tax is %20 in Turkey which is one of the best in the world.
The dynamics that placed the Turkish economy 13th in the Word will continue in the future. With USD 850 billion GDP and an average annual growth rate of 5% Turkey will continue to grow its economy thus making it a great choice for foreign investment, especially so in the Turkish real estate sector.
Young and Dynamic Population
Over %60 of the Turkish population is under 40 years old. This is a huge opportunity and a strong variable in the dynamics of the Turkish economy, and plenty of new businesses are being launched by the younger generations, creating further employment and extra wealth.
The younger generations are courageous and more susceptible to be affected by western culture. Thus leaving home early to start their own lives, which was not the case in Turkey 10 or 20 years ago. This will create a huge increase in the demand for real estate in Turkey in the future and it will continuously grow. Studies of the Turkish property market Show that currently, there is a supply shortage of 2.5 million houses in Turkey. Although the Turkish construction industry is at its peak, it is still not rapid enough to neutralise the supply shortage.
Citizenship By Investment
In order to expand and internationalize the real estate sector, the Turkish government has passed a law that permits foreign investors to acquire Turkish citizenships when they buy property over USD 250.000. This makes Turkey one of the cheapest countries in the world for acquiring citizenship. Once you have bought your property, it only takes 2 months to become a citizen. To find out more, click here.
Real Estate Sector In Turkey
Undoubtedly, Turkey is one of the most promising locations in Europe when it comes to its real estate sector. There are huge opportunities in cities like Istanbul and Antalya but the location and knowledge of the sector is a huge determinant when it comes to making a successful investment in Turkey. Let’s examine some of the key aspects of the real estate sector in Turkey and how an international investor might take part in these trends to make profits in the market.
Over the last decade, approximately 8.5 per cent of the total Turkish GDP comprised the real estate sector in Turkey. In 2018 total foreign direct investment in Turkey was 13 billion USD and 45 per cent of the total foreign direct investment was poured into the real estate sector which is 5.9 billion USD.
If you want to see Kingsman Estates cherry-picked high performing investment properties, click here.