Istanbul to grow as its steps nearer to the EU
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, especially approaching 2010 when the city will be named European Capital of Culture and may be a step closer to EU membership…
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. The appeal of investment property in Istanbul is also set to increase as the city moves towards being crowned European Capital of Culture in 2010.
Apartments and townhouses across the most popular residential and historic areas of the city have seen up to 20 per cent growth year on year until now.
The World Travel and Tourism Council predicts that tourist numbers will continue to rise, so rental potential on a property in Istanbul looks set to be strong. The Government has pumped huge amounts of money into improving transport and infrastructure, which will attract more international tourists and investors. With the European Capital of Culture tag fast approaching, Istanbul is busy improving its cultural offerings. The local museums are now geared towards promoting the city’s European heritage, such as the installations by contemporary Turkish artists at the Istanbul Modern Museum and there are hopes that the European Capital of Culture title will help to progress Turkey’s bid to join the European Union.
In this vein, the Turkish Government is planning to take a number of ‘important steps’ regarding its EU accession process after the local elections at the end of this month, said the country’s Chief Negotiator for the EU membership talks.
Egemen Bagis said, “We are planning to take some important steps, constitutional amendments in particular, regarding the EU in cooperation with opposition parties after the local elections.”
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