Turkey still leading european property price growth

Photo credit: Erman Akdogan

Despite unrest in the country and a severely weakened currency, the housing market continues to enjoy positive growth, with Istanbul based property firm Universal21.com enjoying "one of [their] most successful years to date" in 2013.

Indeed, the average price of residential property rose by 12.5 per cent in 2013 according to the latest report by Knight Frank. This figure is backed up by Reidin, which found that house prices in Turkey rose by 13.32 per cent in the 12 months to November 2013.

At city level, the largest increase in property prices was seen in Ä°stanbul at 17.06 per cent, although it was the European side of the city that performed best when it came to high end property developments, with 10.78 per cent growth in comparison to 9.01 per cent on the Asian side of the city.

"Much of this demand came from the UK and the Middle East and the lifting of restrictions on foreign ownership has certainly helped us with property sales," Adil Yaman, Director of Universal21 comments."

Monica Anca, Marketing Director of Universal 21 adds: "Istanbul has been the focus for much of the foreign investment we have seen in property in Turkey in the last 12 months. In our experience much of the interest is in new developments on the European side of Istanbul."

The suburbs of Beylikduzu has a particular appeal with investors due to its excellent transport links and growing middle class population. Property prices are still relatively cheap in this part of Istanbul and high rental yield make apartments particularly investible.

Universal 21 analysts predict that there will be more double-digit growth to come in 2014 as higher construction costs driven up by rising inflation will add 10 to 15 percent to prices of new properties. According to the agency, the decreasing value of the Turkish lira actually spells good news for investors, offsetting price rises to make properties more affordable for foreign buyers.