Turkish Lira Declines Gulf property investors flock to Istanbul
The plenge in the value of the Turkish lira led to a foreign investor buying up apartment bills in Istanbul, with greater interest from the Gulf States, according to market watchers interviewed by Arab News.
Investors in the region have been seeking to exploit the local currency devaluation by about 40 percent against the dollar since January, as the political row with the United States and market anxiety about Turkey’s fragile economy triggered a massive sell-off.
In an interview, Cameron Diggin said: “In the past few weeks, the number of unique visitors to the site has more than doubled to more than 5,000 per day, and we can see from the data that most attention from the GCC Gulf, with Saudi Arabia – as the most populous GCC in terms of population – is at the forefront by a big margin.
Some, but not all, interests of Saudi Arabia came from other countries in the Middle East, such as Jordan, Iraq and Tunisia, but they had residency rights in Saudi Arabia for many years and in some cases were family children who arrived a generation ago.
Over the past five years, Deggin said Gulf investors have poured into Istanbul, buying apartments as secondary homes. This was more because they felt they were in agreement with Turkey as a Muslim country of a cultural nature and found it attractive, not because they saw real estate as a wise investment, although the weak pound helped. This trend accelerated this year as the currency crisis intensified.
“You ask why the citizens of the Gulf Cooperation Council (GCC) are buying apartments that may be worth more than ever before, and have already fallen by 35 percent … Well, my answer is that Gulf investors are buying from the heart.” At each training session, I tell our men that buyers in the Gulf They may say they want an investment, but for 90 percent of them, the real motive is lifestyle. In Istanbul, They just want a place. Investment is secondary motivation.
“Turkey is a socially, culturally and demographically stable country.”
Deggin predicted that when Lira stabilized, purchases from overseas will double. Some investors with deep pockets were waiting on the shore because they were unfavorable risks.
Until 2017, he said: “If you have dollars in your pocket, your investments are going up in value because the price increase was higher on average than the devaluation of the lira.”
The big question now is what happens if the crisis worsens as tensions between the US and Ankara grow.
“Turkey has faced a number of political, economic and financial crises in recent years, and yet foreign interest has proved to be very stable,” Kate Everett Allen, global real estate consultancy Knight Frank, told the Arab News Agency.
According to statistics from the Turkish Statistics Office, Turkestat, between January and March 2017, in the same three-month period in 2018, foreign buyers had 4,316 sales, this figure was 5,367.
For foreign investors, a 10-million-pound villa costing nearly $ 1.9 million a few weeks ago would now bring them back to only $ 1.57 million, a virtual savings of over $ 300,000, according to Julian Walker, director of Spot Blue International Properties. A London real estate portal based in London cited in a report by Mansion Global.
Walker said tourism was fueling the property market, and this year was indeed exceptional despite the woes of the state. According to the Ministry of Culture and Tourism, Turkey had recorded 11.5 million foreign tourists in the first five months of 2018, which was 30 percent increase in the same period last year.
Turkey saw a 22% rise in home sales to foreign buyers in 2017, according to the end-of-year report issued by the Turkish Statistics Institute.
However, not everyone is comfortable about the Turkish real estate market. The Guardian reported in a report on Aug. 23 that Turkey’s construction boom was based on cheap foreign loans and that with the sale of many building materials in dollars, the collapse could be just around the corner as developers collapsed.
“The construction sector looks like the head of the train – if that happens, all the country goes,” he said, quoting Kazin Bulut, who worked in high-profile positions in the anticipation and sales of a number of Turkish construction companies.