Turkey covers a very large area of about 783,562.38 km² which again means there is a lot of potential for development. In the last decade, the Turkish real estate sector has grown tremendously. While there has been a general decline in the real estate business in Europe, Americas and many parts of the world due to the recent economic meltdown, Knight Frank figures show the real estate sector in Turkey grew by 18.4% in 2014-2015.
Dynamic demographic factors and good economic figures have enabled Turkey to increasingly become the choice for foreign investors interested in setting up businesses and purchasing real estate. There has been an increase in demand for homes and offices in the recent years as more global companies and foreigners demand commercial and residential real estate.
SWOT Analysis for Turkey Real Estate
|– Turkey is the leading investment country in Europe for GDP growth projections.
– Strong financial and banking regulations.
– Construction companies with global reputation.
– Access to mortgage facilities.
– Government adding more buyer incentives each year.
|– Acquiring land is difficult and obtaining construction permits is not straight forward.
– High number of old type of housing which cannot qualify for mortgage facilities.
|– High internal demand for residential housing and commercial space.
– Many slum upgrade projects in major cities to create opportunity for new housing.
– Regulations on earthquake and natural disasters have increased the need for quality construction.
– Increased tourists inflow and investors have made opportunities for office space and residential property.
|– Earthquakes are a common feature in some parts of Turkey hence may scare away investors.
– The sector still is volatile compared to mature real estate markets such as the UK and US.
Foreign direct investments have also played a key role in uplifting the Turkish economy. Demographic factors including a younger population, highly learned labour force, tax incentives and a large domestic market have all made the Turkish economy to reach where it is today. The amount direct foreign investments by 2015 increased to USD 168 billion; this is a strong indication of investor confidence in Turkey.
OECD 2012 – 2017 Economic growth forecast