Reasons to Invest in Turkey and the Real Estate Market
During the past 15 years, Turkey has crossed a long way by becoming one of the most powerful economies in the world and an attractive destination for foreign investors in different sectors. Turkey is located at the intersection of Western Asia and Southeast Europe which gives it a unique location that plays a huge role in the prosperity of the country, with a population of 82 million where the majority of which are the young generation. Ankara which is situated on the Asian side represents the main Capital of Turkey However Istanbul is the most important and biggest city in Turkey since is it a crossroad between the Asian and European and a huge workforce and contains the largest establishment of companies and for having this unique location on the famous Bosphore attracting millions of tourists every year.
The major reasons why foreign investors should invest in Turkey which we will discuss more in this blog are mainly the fast-growing economy, the huge tourism factor, the large industrial sector, the young skilled workforce, and most importantly the government regulations and encouragement of foreign investment.
Tourism: Turkey is known for its unique location and the vast differences in culture and history It has become the 6 the powerful country in the tourism sector, in 2018 only turkey has attracted more than 48 million tourists. It has presented strong investment opportunities in both the established and the newly developing subsectors in the tourism industry. This impact many other sectors by default and has played a major role in putting Turkey among the strongest economies in the world with mega governmental and private projects.
Dynamic Young Population: By 2022 the population of Turkey has reached 82 million where 60% of it is the young generation and dynamic workforce. They are working on developing and expanding in many sectors as well as starting startups and small businesses in order to bring and create new sectors in the country.
These young investors and workers and the newly wealthy had a huge impact on the domestic market where the demand for housing, commercials, and offices has increased and has pushed the government to expand and establish new business areas and centers to decrease the pressure from the city center.
Low taxes and fast procedures: Turkey offers incentives in various areas while has reduced corporate tax from 33% to 20%. Among the major attractions for investors are the tax laws in Turkey and the encouraging purchase regulations and procedures. The government has decreased the corporate tax from 33% to 20%. In addition, the purchase is not limited and open to many nationalities with easy procedures and title registration within weeks.
Good infrastructure: During the past two decades, the government put huge plans to regenerate and urbanize the old districts and build new luxury areas for foreign investors. The country is rich with attractive beautiful spots, seas, Bosphorus, spectacular hills, large green area on both Asian and European sides ready for the expansion of projects and residences. A huge strong transportation network across the country competes with the strongest developed countries in the world. These features path the way for secured successful investment.
Real Estate in Turkey:
The Turkish real estate sector has reached a high peak during the last 2 decades comparing to the real estate market in other countries. Statistics from several foreign companies and countries have shown that Turkey has ranked the 6th in the world in terms of its annual price growth index with a yearly increase of 11%, more than that Turkey has been named Europe's most appealing city for real estate investment according to PWC and Deloitte Consulting.
One of the reasons why Turkey had a large number of real estate investors is the country’s potential to join the EU Union. Another significant reason is the helpful legislative amendments have been put by the government to encourage investors to invest in real estates such as the Tax laws, the property title registration procedures, and the mortgage laws.
Economy Growth Statistics:
Based on official statistics Turkey has made growth in GDP of 4%pa from 2002 to 2016 and increased as well the per capita income from 3500 USD in 2002 to 27.500 USD in 2017 which proved that the country is on the right track of a strong growing economy.
This economic strength was present as well during the Global crunch impact which affected the strongest economies in the world and affected turkey as well through the decrease of foreign investments however it remains solid and came back stronger and achieved a growth of 9.2% in 2010 and 8.5% in 2011. During this year the growth has been on a slow scale due to the instability of the currency where there was an economic growth of just 2.6% however in the same year the foreign investment increased to 168 billion USD.
Strength and Weaknesses of the Real estate market:
Strengths and Potentials:
⦁ Solid and strong financial and banking regulations and laws
⦁ Turkey has the highest GDP growth projections in Europe
⦁ International professional real estate companies
⦁ High demand for real state and commercials from locals( strong internal market)
⦁ Urban regenerations plans in many cities to expand the real estate opportunities
⦁ Strong regulation added to secure the new projects from any threatening earthquake
⦁ The expansion of High quality and luxury housing
⦁ Increase number of tourists reflecting on the commercial and offices purchase fore different sectors
Weaknesses and Threats:
⦁ Difficult procedures in purchasing lands or acquiring a construction license
⦁ The market is still unstable comparing to strong markets such as the Uk and USA real estate markets
⦁ Change in the currency value affecting the economy.
⦁ Earthquakes are real threats in Turkey that can push away investors.
Legal and Political Structure:
Turkey's political system is based on the separation of powers, it is a democratic parliamentary republic system based on the rule of law. It was established in 1923 and the first constitution was passed in 1982. A Changement in legislation has been made in 2018 by a referendum. The parliament system has changed since then to a presidential system. Under the presidential system, the Turkish president is both the head of government and the head of state with power and rights to appoint judges and head of state institutions and issue executive bills.
Turkish Citizenship By Investment:
According to a governmental law passed in 2018, buyers now can obtain Turkish citizenship by purchasing a property or more with a worth of 250.000$. This law has attracted thousands of citizenship seekers since it is the most affordable deal in the world with a lot of privileges and benefits.
Benchmarking Turkey to France, UK, Greece, and the US:
This analysis will clarify ideal investment and markets through a comparison between Turkey and other strong developed countries such as the UK, Greece, the US, and France since these are the main competitors of Turkey in the real estate market.
I. Finance and Banking sector: Turkey comes in the first rank in the most powerful and strongest banking regulation beating France and Russia and slightly below UK whilst Greece in the least. ( Banking sector stronger than the BRICS, Brazil, Russia, India, China, and South Africa). This skilled workforce and strong finance regulations give higher potential investments and encourage the investors more. A major feature related is the fact that the government doesn’t apply bans on funds or money flow to and from Turkey which makes the transactions and money flow easier and safer.
II. Globalisation, Flexibility, and Adaptability: The fact that Turkey has opened the real estate market and the investment to many foreign countries reflects how the country is leading towards globalization and the adaption of foreign businesses and investments in different sectors without restrictions unlike France, Russia and Greece.
III. Setting up and registering a new business: Turkey has guaranteed to foreign investors easy and smooth procedures while starting start-ups and establishing new businesses in order to encourage foreign investments. It is a major feature that differs Turkey from other powerful countries such as France, Russia, UK, and Greece.
Simple steps and procedures to open and register a business within 2 weeks. According to the New Turkish Commercial Law N: 6021 which based on international standards, foreign investors can register a joint-stock company or a limited liability company even as a single shareholder. Legal documents and forms are required along with personal documents, bank deposit based( you can visit our start-up a business in Turkey blog for more information), and an appointment in the tax office to finish the registration procedures.
These statistics and on-ground results prove how solid and stable is the Turkish economy and especially the real estate market which has been in prosperity for 2 decades comparing to developed countries like France, Russia, Greece, and the US.
The governmental efforts and huge plans had a real impact in transferring the country to an attractive destination for real estate investors which in return affected positively the economical growth in Turkey.