Turkey: The Property Shangri-La
Turkish Economy
 
Turkey's dynamic economy is a complex mix of modern
industry and commerce, along with a traditional agriculture
sector that still accounts for more than 35 per cent of
employment. It has a strong and rapidly growing private
sector, yet the state still plays a major role in basic
industry, banking, transport and communication. The largest
industrial sector is textiles and clothing, which accounts
for one third of industrial employment. It faces stiff
competition in international markets with the end of the
global quota system. However, other sectors, notably the
automotive and electronics industries, are of rising
importance in Turkey's export mix.
 
Real GNP growth has exceeded 6 per cent for many years. The
economy is turning around with the implementation of
economic reforms, and 2004 GDP growth reached 9 per cent,
followed by roughly 5 per cent annual growth in 2005-06.
Inflation fell to 7.7 per cent in 2005, a 30-year low. The
country showed strong economic gains in 2002-06, which were
largely due to renewed investor interest in emerging
markets. Prior to 2005, FDI in Turkey averaged less than $1
billion (£515.39 million) annually, but further economic
and judicial reforms and prospective EU membership are
expected to help boost FDI.
 
Privatisation sales are currently approaching $21 billion
(£10.8 billion). Oil has been flowing through the
Baku-Tblisi-Ceyhan pipeline since May 2006, marking a major
milestone that will bring up to 1 billion barrels per day
from the Caspian to market. Without a doubt, the commitment
of the government to economic reform, supported by prudent
macroeconomic and structural policies, has played a
significant role in strengthening investor confidence in
the Turkish economy.
 
Foreign Direct Investment (FDI)
 
FDI in Turkey is rapidly increasing as a result of the
Turkish government working consistently hard to make
investment both easier and more attractive. As a result of
the government'sefforts, between January and October in
2006 alone almost $16 billion (£8.2 billion) was committed
to Turkey in the form of FDI.
 
Money is flowing into everything from banking
tomanufacturing and one particular sector where FDI has
reached record levels is the real estate sector. A number
of significant, international property companies such as
Emaar Properties and ETA Star have committed millions to
housing and commercial property projects in Turkey, and,
going in to 2007, bidding is taking place for a range of
new projects such as the biggest real estate project to
date in Istanbul for the construction of three skyscrapers
and a yachtmarina. Donald Trump is said to be in the
bidding war for the development that will beconstructed in
Zeytinburnu.
 
But Istanbul isn't the only area to be boosted by FDI;
there is a great deal of investor focus beginning to target
the southern Turkish coastline, which has a hugely
successful tourism industry already, and all of this
investment confidence and contribution is allowing for the
creation of jobs, which means that local purchasing power
is significantly improving.
 
Tourism
 
Steady growth - Turkish tourism can be characterised by
these two words. The year 2005 was a turning point for
tourism in Turkey. In 2004, there was a 29 per cent growth
in the number of arrivals. In 2005, the foreign visitor
arrival growth rate was 25 per cent. This indicates that
Turkish tourism has sustainable growth and stability. In
2005, incoming tourist receipts came to $11.9 billion (£6.1
billion) compared to $10.6 billion (£5.4 billion) in 2004.
In 2005, the biggest change occurred in the number of
tourists coming from non-European countries. The USA, Iran,
Denmark and Syria were the countries which showed the
highest growth rate in the number of arrivals.
 
EU talks boost holidays in turkey.
 
More and more people are taking holidays now because of
their increased purchasing power. With every step towards
Turkey's EU membership, more people in Europe are
considering the Turkish coast as an exotic option that is
also close to their homeland. EU membership talks and the
booming Turkish economy have made Turkey a favourable
nvestment haven. Reduced inflation and interest rates have
stabilised the economy since 2003.
 
If Turkey can get the FDI it needs and attain full EU
membership, it will become one of the most important and
influential countries in the world as it will,
strategically and politically, represent a bridge between
the Middle East and Europe. The future prospects for Turkey
and its economy are, therefore, very positive indeed over
the medium to long- term, making the country an exciting
investment opportunity for property buyers seeking
significant returns over the same term period.
 
As the Turkish economy continues to expand and the standard
of living improves further, the forthcoming membership of
the European Union will further lift what is already a
buoyant economy. As ongoing government reforms continue to
be introduced, the period of cooperation with business and
overseas investors continues to develop, facilitating an
ever increasing inventory of property being bought and sold
in Turkey.
 
 
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Aston Lloyd & Partners is a City based global real estate
investment company specialising in the emerging markets. We
source and develop opportunities that have the ability to
deliver generous returns for both the seasoned and novice
investor.
 
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