Property in Turkey - The Residential Market Remains Buoyant in Istanbul

A new report from Jones Lang LaSalle has found that despite the global economic slowdown, the residential market in Istanbul remains buoyant, with plenty of opportunities on offer for investors and second home buyers, especially approaching 2010 when the city will be named European Capital of Culture.

The shortage of available land in the centre of Istanbul has pushed up market prices, and forced residential developers to expand towards the city’s periphery.

These emerging areas are being supported with planned transport links, while regeneration plans aim to move industrial production to the outskirts of the city to help the development of residential areas within the city centre.

Jones Lang LaSalle’s new report ‘Istanbul Real Estate Overview,’ showed that there was huge potential for long term growth.

Avi Alkas, Chairman of Jones Lang LaSalle Turkey, said, “The residential market in Istanbul has undergone rapid development over the last five years, and market drivers remain strong, creating further room for continued growth.

“The city offers huge potential with an expanding middle class and their strong investment intentions, ongoing migration into the capital, as well as the need to replace the existing earthquake-vulnerable stock.

“The global economic downturn may result in a slowdown of some luxury residential projects in the coming years, but demand from the middle classes is expected to remain strong,” added Mr Alkas.

Alan Robertson, Managing Director of Jones Lang LaSalle Turkey, said, “The global economic slowdown has caused a modest correction in residential prices but on the whole Istanbul’s residential sector is proving more resilient compared to other major cities around the world.

“The population is projected to reach 14.5 million by 2015, creating an estimated 1.18 million extra households and this potential growth means that major developers are continuing with large residential projects.

“The city’s combination of size, scale and location, strategic commercial position as well as strong retail market will also enhance the residential sector’s potential over the long term,” he added.

The Turkish Government, keen to encourage foreign investment, has already reformed aspects of the property buying process to make it more transparent and appealing to investors.

Currently, the lack of an efficient mortgage funding infrastructure has caused an imbalance in the residential market. However, the mortgage market in Turkey is still in its infancy and shows strong potential for growth.