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Turkey property investment prospects looking up - 9 November 2009

Economic data coming from both the UK and Turkey are suggesting that now is an ideal time to invest in property in Turkey for the future. With rumours that the Turkish Central Bank is preparing to cut interest rates on mortgages even further and the prospect of a recovery in the value of Sterling, the future of property investment in Turkey is looking positive.

In addition to the strengthening Pound, the rumours over the base rate of interest in Turkey have sent the Turkish Lira into freefall on the currency markets. This means that anyone buying property in Turkey at the moment could be in line for a ‘discount’ of up to seven per cent instantly on the exchange rate alone.

The interest rates make it even cheaper for Brits who are looking to buy property in Turkey using a local mortgage. However, the one thing to remember about financing your Turkish property with a Turkish mortgage is that banks will only lend on completed properties which can be independently valued by the lender. While this severely limits the properties that can be bought by foreign buyers using Turkish finance, the cautious approach of local lenders means that many Turkish banks are in much better shape than other European counterparts and have reported rising profits.

Therefore, mortgage lending should be able to continue on property in Turkey with little or no need for the banks to become more risk-averse.

As predictions for Turkey’s inflation rate to reach five or six per cent this year continue, confidence in the Turkish Lira appears to have drained away somewhat with investors heading for more stable currencies. This news opens up the way for further interest rate cuts from the Turkish Central Bank and speculative buyers from overseas to benefit from the relatively weak position of the Lira.

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