Residential property prices and rents moving upwards in most areas, latest index shows

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Turkish residential property prices improving

Residential property prices in Turkey are slowly edging upwards with the latest real estate index showing improvements in many of the seven major cities and 71 districts it covers.

In April actual sales prices increased 0.16% in Adana, 0.04% in Ankara, 0.68% in Istanbul and 0.2% in Kocaeli, the national TRPPI (Turkey Composite Index) report shows.

Prices were down slightly in some locations including 0.81% in Antalya, 0.30% in Bursa and 2.37% in Izmir, the index also shows.

When adjusted by inflation rate according to the Consumer Price Index, the residential real estate investments caused a loss to investors in real terms in April 2010, the report also says. Accordingly, the rate of loss in real terms is 0.05% in Adana, 0.10% in Ankara, 0.13% in Antalya, 0.12% in Bursa, 0.06% in Istanbul, 0.15% in Izmir and 0.10% in Kocaeli on a monthly basis.

Residential rent prices are increasing at a slightly faster pace. They increased 1.19% in Adana, 0.29% in Ankara, 0.21% in Bursa, 0.56% in Istanbul, 0.51% in Izmir and 0.05% in Kocaeli. Antalya was the only location to see rent falls at 0.07% in April.

With a tourist season that stretches from April to November and increasing numbers of visitors, Turkey is growing as a real estate investment destination, according to Cumberland Properties which build investment and holiday homes on and around the Bodrum peninsula.

It is predicting that buy to let property in Turkey can produce rental returns of around 6% but many people are put off by the sheer logistics involved in renting and marketing.

The company says that Turkey is unique in being the only one of the world’s top ten tourist destinations to record an increase in visitors last year with over 27 million people from around the world staying there during 2009, up 2.8% on 2008.

‘The one thing that the majority of these visitors have in common is that they all need somewhere to stay. It’s no surprise then that so many potential investors are now waking up to the substantial profits that can be gained by investing in buy to let or fly to let properties in Turkey,’ said Eric Kaya, director of Cumberland Properties.

‘Turkish property prices are still hugely undervalued so there’s an opportunity to make really substantial returns on investments in areas such as the Bodrum peninsula. In the next two years, for a well chosen investment, this could be as high as 10%,’ he explained.

‘However, it’s important to realise that although prices are still far lower than in other countries, they will not remain like this forever, especially considering Turkey’s imminent accession to Europe. Consequently 2010 genuinely offers investors the perfect window of opportunity to maximise returns on their investment,’ he said.

‘Property investors can benefit from the high rental income that their properties are fetching in an area that has just about everything, from remnants of the ancient world and magnificent beaches through to world class water sports and a vibrant nightlife. Less than four hours from the UK, Bodrum is located just 25 minutes drive from the international airport,’ he added.

The company also points out that property purchase costs and taxes are substantially lower than in popular holiday home destinations in Europe such as Spain and France. There is also no capital gains tax in Turkey.

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