Is it time to look at Turkey for Christmas?


Is it time to check Turkey?

In the doom and gloom of the ongoing economic slowdown there are only a handful of countries around the world which seem to be coping with the problems of banking collapses and financial hardship.  Quite often these are countries that operate in a very different style and system to the western countries of the UK and Europe.  While some may have mocked them in the past for not taking ‘advantage’ of cheap finance, who is laughing now? Which banking systems are literally collapsing to their knees?

Turkey is one such country which seems to be immune from the ongoing worldwide economic crisis and indeed one which could well benefit when the dust settles and property investors look to realign their investments.  So why Turkey? Why now? What does the future hold?


Turkey is one of the few countries in the world where eastern and western cultures come together in a way which is accepted by both sides.  It is a country which stretches across the traditional east and west areas of the world but more importantly it is a country which has undergone massive change over the last 20 years.

To say that country is in one of the most volatile areas of the world is an understatement with the likes of Syria, Iraq, Georgia and Iran bordering the country.  Quite how the country has managed to stay neutral and relatively untouched in recent times is a testament to the political skills of the leading parties of Turkey.


Many people will be surprised to learn that Turkey is one of the founding members of the G20 of leading nations and has been very prominent in the OECD since inception.   The turning point for Turkey came in the 1980s when the country changed from a heavily regulated market approach to more of a western style free market economy.  While this did not happen overnight and was not without its problems, as time went by the new style of economy started to grow and more importantly attract interest from overseas investors.

As happens in the vast majority of expansive economies we also saw a change from traditional agricultural and manufacturing led economies to one where the services sector became more and more prominent until it was the leading area of the Turkish economy.  The change in structure of the Turkish economy has also had a massive affect on the wealth of the population and in 2008 it was confirmed that 35 billionaires lived in Istanbul alone which put the City 4th in the world list behind Moscow, New York City and London – further recognition that times have changed.

Financial system

This is perhaps the area which has ensured that Turkey has remained very strong and very competitive even in the grip of the ongoing worldwide slowdown.  While the banking system is very developed in the country there seems to be an aversion to mortgages, at least for those born and bred in Turkey.  Whether this is a cultural trait or the fact that mortgage interest rates have always been a little higher than in comparable countries is uncertain but the average Turkish property transaction is majority funded by the buyer’s savings leaving very little, if any, debt to worry about at a later stage.

It is this aversion to debt which has seen the banks in Turkey remain well capitalised and to all intense and purposes untouched by the ongoing troubles in many parts of the world.  This confidence has also spread to the economy with Deutsche Bank recent confirming its forecast of 5-6% growth per annum for the economy over the next ten to fifteen years – perfect conditions for a thriving property market?

Property market

The conditions in Turkey, even now, are perfect for property investment for a number of reasons which include steady economic growth forecast for the next decade at least, single digit inflation and a growing tourist market.  While the calm economic outlook and single digit inflation are important it is the invasion of tourists from all over the world which has brought the Turkish property market to the attention of the masses.

While 2007 was a record year for tourist numbers in Turkey, at around 21 million, even now 2008 is looking at 24 million visitors.  Can you imagine what the figure might have been had the rest of the world not been suffering from a major economic slowdown.  These figures alone will make the average property investor sit up and take notice of a property market which is still going from strength to strength.

The future

To say the future looks bright for Turkey is a bit of an understatement as the economy is booming, tourist numbers are climbing higher and higher and the amount of foreign investment in the country is at record levels.  When you also consider the focused approach to the future from the Turkish government and the fact that millions of pounds have been spend on improving and adding to the country’s infrastructure the building blocks are there for another period of sustained growth.


While some of the greedy bankers who have fallen foul of the ongoing credit crunch may have attempted to change the mindset of the modern day Turkish investor there was never any chance that they were going to over stretch themselves.  The culture of only spending what is available, with lending in rare cases, has proven to be a solid formula for long term economic prosperity.  To some the banking sector in Turkey may not be as exciting and forward thinking as some around the world, but on the other hand it seems to be an awful lot safer with no government bailouts required and highly unlikely to be.

Unless you have looked at the Turkish in detail it may not be one which stands out, it may not seem all that exciting compared to others but there is nothing wrong with following a long term plan for economic growth and reducing the risks as much as possible.  The pursuit of short cuts to success and money is what has ruined numerous markets around the world as many of us know only too well.


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