Turkish property is enjoying unprecedented interest from foreign buyers due to its affordability and the prospect of EU membership. A well-established package destination visited by millions of British and European tourists each year, Turkey has only recently emerged as a popular place to buy property. All the ingredients that made the country such a good holiday spot – a warm Mediterranean climate, lovely scenery, friendly people and excellent value for money – are now fuelling an unprecedented level of interest in the country from foreign buyers. Current prices are far lower than other, more established, property markets, such as Spain and Italy. The prospect of EU membership in the not-too-distant future also promises excellent potential for capital growth as Turkish property prices are expected to climb to the levels found elsewhere in the Mediterranean.

Outside interest in Turkish property has also been encouraged by a liberalization of the laws governing foreign buyers in 2003. These changes opened up rural areas to overseas buyers and created a more investor friendly environment.

Despite all the excitement, the Turkish market is still comparatively small by international standards- the $1.34 billion invested in Turkish property market by foreigners in 2004 compares with over $9 billion in Spain. It is also heavily concentrated along the Aegean and Mediterranean coasts, and particularly the stretch between resort of Kuşadası in the north and Alanya in the east. It will be no surprise that this area contains most of the country’s main holiday resorts, as well as some of the most beautiful scenery and the best beaches.

Tourist development and building, particularly over the last 15 years, have transformed quaint little fishing towns like Bodrum, Marmaris and Alanya into large resorts boasting modern leisure facilities, restaurants and nightlife, as well as efficient hospitals and well-stocked supermarkets.

The most popular spots for foreign property buyers and investors are Kuşadası, Altınkum, the Bodrum Peninsular, Marmaris, the Bodrum Peninsular, Marmaris, the Fethiye area including the resorts of Çalış, Hisarönü and Ovacik and Kalkan. In these areas British buyers are generally in the Majority, with German, Dutch and Scandinavians also buying in increasing numbers. Further east, Side and Alanya are also very popular, particularly with buyers from Scandinavia, Ireland and the UK. Property in Istanbul and Cappadocia in Central Anatolia is also attracting outside interest, though far less than in the coastal areas. Most property in the coastal areas is bought for use as holiday homes, although a small but growing number of people are choosing to relocate permanently to Turkey, tempted by the quality of life and low cost of living. Many holiday homes are rented out when not in use, but investors are also increasingly looking to Turkish property to provide a buy to let income, as well as capital growth.

The Mediterranean and Aegean Resorts are also popular with Turkish second-home buyers, with domestic demand set to increase as stable economic conditions and the introduction of a mortgage system make owning a holiday home possible for more middle-class families. Generally speaking, lower budgets mean that Turkish buyers tend to opt for certain property types, which are less popular with overseas buyers. This has caused a dual market to develop in many areas, with some construction companies targeting the foreign market by building larger, more expensive villas or apartments with better fixtures and fittings; while others build and sell almost exclusively to Turks.

Previously, many foreigners chose to buy land and have properties built themselves. This was largely due to the low-cost of building and a shortage of suitable properties, with most constructed according to local budgets and tastes. The scarcity of old buildings suitable for renovation was also a contributing factor. More recently, however, there has been a dramatic improvement in the quality of properties being built by Turkish developers. Buying new builds and off-plan has become very popular with many builders now offering units for sale on complexes with facilities like swimming pools, gyms and cafes. Some even offer guaranteed rental income, thanks to the agreements with package holiday operators.

Turkey’s Hottest Property Spots

1. Kuşadası: A large package resort town with marina and easy access to Ephesus, Turkey’s most impressive archeological site, as well as İzmir Airport.
2. Altınkum: A rapidly growing resort popular with British and Turkish tourists for its sandy beach. Close to Bodrum airport.
3. Bodrum: The country’s most sophisticated resort, with interesting sights, good shopping and excellent nightlife. Beyond the main town are a string of very different, smaller resorts.
4. Çalış: Fethiye’s nearest beach resort is attracting British buyers in droves thanks to some very affordable property and a long stretch of seashore.
5. Hisarönü & Ovacık: Set in lovely mountain scenery with the Ölüdeniz lagoon nearby, these two resorts near Fethiye are hugely popular with buyers-particularly from Britain however prices have risen dramatically in recent years.
6. Kalkan: An attractive friendly resort with plenty to do in the surrounding area. The town has grown explosively in recent years.
7. Side: Sandy beaches and Roman remains have made Side a popular resort. Now the area boasts villa and apartment complexes.
8. Alanya: A large seaside town with good beaches, entertainments and service. Wide choice of apartments and a large expatriate community.

Expert View Property

What is encouraging foreign interest in Turkish residential property?
The country’s location close to Europe and its pleasant Mediterranean climate are major draws for foreign buyers, as are the country’s reasonable property prices. The recent economic and political stability in the country is also an important factor.

Is Turkish property a good investment?
Yes, as the prices of residential property are very reasonable at the moment compare to other European Markets. There is also the potential for significant capital growth in the coming years, as Turkey begins accession talks with the EU and the infrastructure improves as a result of state and private investment.

What are the best areas for foreigners to buy?
The south and west coasts of Turkey are the most attractive for foreign buyers. These areas have the best scenery and also the best facilities for holiday makers. The main areas of demand are the Aegean coast from Kuşadası to Bodrum and on to Marmaris and Dalaman, Fethiye. The so called Turkish Riviera from Kemer to Antalya and Alanya is also popular. All these coastal areas have a warm drive climate and have traditionally been the main tourist destinations.

When will Turkey develop a mortgage system?
The mortgage system was legislated in May 2007. The law has already been issued and mortgage packages are now available both for domestic and foreign property buyers. It is expected that in the beginning of 2008 the mortgage system will be fully operational in Turkey.

Are there any recommendations you have for foreign buyers?
Title is the magic word in Turkey. Everything revolves around the title of a property, so clarity is very important for buyers in order to protect their investment. Careful research is needed, but they are also products suggest title insurance and guarantees that can help investors have peace of mind and security. The location of property should also be investigated well. Foreigners, for example, are not permitted to buy near restricted military zones.

Where to Buy

1. The Aegean resort of Çeşme and the coastline to the North have largely been the preserve of Turkish buyers. Within commuting distance to İzmir the country’s 3rd largest city, Çeşme is a popular weekend destination, which enjoys a buoyant property market driven buy local, rather than foreign demand. Although many properties in the area still offer excellent value for money, prices in the most desirable locations have sky-rocketed.
2. Kuşadası is a sprawling, rapidly growing reserved town close to the fascinating Roman city of Ephesus, Turkey’s most famous archeological attraction. Similarly, Altınkum has a good beach, plenty of activities and interesting archeological sites nearby. Both resorts have experienced massive developments in recent years and are particularly popular with buyers looking for the most affordable property, be it apartments and cheap villas.
3. The Bodrum Peninsular is a diverse area with something to suit all tastes and budgets. Its popularity with domestic and expatriate Turkish buyers, many of them extremely wealthy, has pushed prices up. But consequently, the area has a wide choice of properties at all levels of the market, as well as excellent leisure facilities, service and amenities.
4. Further south, The large town and package resort of Marmaris boats and marina and sandy beach at İçmeler. The urban setting will not be to everyone’s taste, although the nearby country is very beautiful. Dalyan is a much smaller, quieter resort surrounded by unspoiled rural scenery. As you would expect, the service and amenities on offer in Dalyan are more limited.
5. The recent designation of Dalaman as a so-called Tourist Development area, has encouraged intense interest from developers. The states-sponsored plans include a golf court course and several marins, making things an area to watch.
6. The small resort of Göcek has gained a reputation as Turkey’s top yachting center. Strict controls of developments and the comparative scarcity of flat land have had prices relatively high.
7. The town of Fethiye and nearby resorts of Çalış, Ovacık and Hisarönü are one of the most popular spots for buyers from the UK. There is a wide variety of property on offer, from town centre apartments to more secluded villas.
8. Kalkan is smaller and more up-market, with good access to nearby attractions, suggest the beach at Patara high demand for villa properties from mainly British buyers has pushed up property prices and fuelled a major building boom. The pretty seaside town of Kaş has a good choice of property, although the lack of a decent beach and the distance to the nearest airport puts some buyers off. Kemer is a rather utilitarian purpose built resort set in some the coast’s most beautiful scenery. Favourite by German and, more recently, Russian Buyers nearby Çamyuva is popular with British.
9. Antalya is a large city with lots of modern apartments and some atmospheric houses in the old tow. The Mediterranean resorts of Side and Alanya have excellent beaches with interesting sites and activities, suggest the Roman theater of Aspendos and white water. Water rafting nearby, Belek is the country’s premier golfing area.
10. The stone and cave houses of Capadocia are one of the most unusual property choices in Turkey. Often hundred years old, extensive renovation is usually required.

Property Prices

Despite rapid increases over the last 3 years, prices are below those in the more established Mediterranean property markets, such as Spain and Italy. Prices everywhere have increased considerably over the last 3 years with most areas experiences rises of 15-20 percent per annum, far more in some cases.

Generally, prices look set to continue rising in the face of growing demand. The introduction of Mortgage system will also encourage this trend.