Turkey leads house price growth

Turkey is leading house price growth around the world. The country saw property values jump 18.9 per cent in Q3 2015 compared to the same quarter in 2014, making it one of just five countries to record double-digit annual price growth in Knight Frank's latest global house price index - alongside Hong Kong, Sweden, New Zealand and Luxembourg.

Of the 55 housing markets tracked by the index, 45 recorded positive annual price growth in the year to September, an increase from 41 last quarter. Scandinavia also performed strongly, with values across the three countries (Sweden, Denmark and Norway) rising on average by 7.8 per cent year-on-year. The pace of decline in China slowed, from -5.7 per cent last quarter to -2 per cent in the year to September.

Turkey, though, was several steps ahead of the rest of the world. On a six-month basis, it was the only country to record double-digit growth, with prices up 10.5 per cent, while values have increased 5.1 per cent in the last three months alone, only matched by Australia's quarter-on-quarter rise of 4.7 per cent.

Knight Frank attributes Turkey's growth to an expanding population (1.2 per cent increase per annum) and a slowdown in construction, combined with "strong levels of foreign investment".

Indeed, sales of Turkish property to foreign buyers increased by roughly 24 per cent in the past year, according to new figures.

The market's positive performance follows the country's recent election, which saw Turkish President Recep Tayyip Erdogan regain rule, following a failed attempt at an opposing coalition. After a period of unrest and a volatile lira, the property industry welcomed the election as a sign of business as usual, with stocks also improving in response.

"This was a very difficult period for the country as there was no government in place and people’s confidence had begun to wane. The positive reaction of the stock market and the huge jump in the value of the Turkish lira is proof of the reaction of the market’s confidence in the AK Party regaining the mantle of Government," Philip Skorochod, Founder of Universal 21, told TheMoveChannel.com.

Now, Turkey is already looking to consolidate on its housing success, announcing plans to introduce its own Golden Visa scheme. Similar schemes have so far stimulated investment significantly in countries such as Portugal, a trend that Turkey will be keen to continue.

The country intends to grant citizenship to foreigners who invest around $500,000 to $1 million in its real estate industry, although the exact threshold and details are yet to be confirmed.