Turkey’s road to EU membership and its impact on property prices in Turkey
Turkey’s first contact with the European Union (EU) was in 1963. Turkey sought for full membership in 1987, and formal EU-Turkey discussions began in 2005.
Since Turkey’s application for full membership in the EU in 1987, there have been several pauses and starts in the discussions. Due to this rocky process, there is no visible momentum that would suggest a rise in property values, as was the case in Eastern European nations before to full EU membership, when property prices surged owing to the impending EU membership.
However, since 2007, it is a fact that a steady growth in international investors buying residential and commercial property in Turkey, especially after the stagnation within the EU zone. This has pushed up housing prices in Turkey, particularly in major cities like Istanbul. As a result, it might be claimed that property prices and foreign direct investment in Turkey have been rising despite the EU and Turkey is considered as a reliable investment destination due to its exclusion from the Euro zone.
What about the Erdogan government’s effect on investment?
Despite the social discontent of some sections due to the tendency to intervene people’s lifestyle, this government has initiated the largest privatization campaign in the history of Turkish Republic. Moreover, the current government has allowed foreign individuals obtain real estate in Turkey. With an amendment in May 2012, investors from the Middle East and ex-Soviet countries have become eligible for the purchase of real estate.
Overall, the maneuvers made by the government have had a direct positive impact on the level of foreign direct investment and real estate acquisitions by institutional foreign investors on the whole.
Individual and institutional investors from the US, Russia, the Middle East, and Europe are present; there is considerable investment from Middle Eastern governments, notably Kuwait, the U.A.E, and Saudi Arabia. The size of investment ranges from a few residential buy-to-let properties to bigger investments in retail malls, hotels, and development projects. They are inspired by Turkey’s economic growth and favorable investment environment, which allows investors to freely move money in and out of the country — virtually an investment haven profile.
Being outside the Eurozone turns out to be beneficial, as banking requirements on reporting transactions are less rigorous and offer tax benefits for investors.
In other words, Turkey has constructed a financial system free from the dragging EU negotiations. Regions outside of EU, such as the Middle East, China, the United States and Russia have formed strong financial partnerships with Turkey. On the other hand, Turkey conducts import/export activities with the EU countries, although in a smaller volume than before. To sum up, both social and financial structure tells us that Turkey prefers a multi-directional development.
Turkey’s road to EU membership and its impact on property prices in Turkey
Turkey’s first contact with the European Union (EU) was in 1963. Turkey sought for full membership in 1987, and formal EU-Turkey discussions began in 2005.
Since Turkey’s application for full membership in the EU in 1987, there have been several pauses and starts in the discussions. Due to this rocky process, there is no visible momentum that would suggest a rise in property values, as was the case in Eastern European nations before to full EU membership, when property prices surged owing to the impending EU membership.
However, since 2007, it is a fact that a steady growth in international investors buying residential and commercial property in Turkey, especially after the stagnation within the EU zone. This has pushed up housing prices in Turkey, particularly in major cities like Istanbul. As a result, it might be claimed that property prices and foreign direct investment in Turkey have been rising despite the EU and Turkey is considered as a reliable investment destination due to its exclusion from the Euro zone.
What about the Erdogan government’s effect on investment?
Despite the social discontent of some sections due to the tendency to intervene people’s lifestyle, this government has initiated the largest privatization campaign in the history of Turkish Republic. Moreover, the current government has allowed foreign individuals obtain real estate in Turkey. With an amendment in May 2012, investors from the Middle East and ex-Soviet countries have become eligible for the purchase of real estate.
Overall, the maneuvers made by the government have had a direct positive impact on the level of foreign direct investment and real estate acquisitions by institutional foreign investors on the whole.
Individual and institutional investors from the US, Russia, the Middle East, and Europe are present; there is considerable investment from Middle Eastern governments, notably Kuwait, the U.A.E, and Saudi Arabia. The size of investment ranges from a few residential buy-to-let properties to bigger investments in retail malls, hotels, and development projects. They are inspired by Turkey’s economic growth and favorable investment environment, which allows investors to freely move money in and out of the country — virtually an investment haven profile.
Being outside the Eurozone turns out to be beneficial, as banking requirements on reporting transactions are less rigorous and offer tax benefits for investors.
In other words, Turkey has constructed a financial system free from the dragging EU negotiations. Regions outside of EU, such as the Middle East, China, the United States and Russia have formed strong financial partnerships with Turkey. On the other hand, Turkey conducts import/export activities with the EU countries, although in a smaller volume than before. To sum up, both social and financial structure tells us that Turkey prefers a multi-directional development.