The tourism popularity in the country resulted holidaymakers' attention to the Turkish property. Many foreigners are buying properties in Turkey for their holidays or for the retirement, particularly along the Aegean and Mediterranean coast, as well as in some major cities such as Istanbul and Izmir.

Usually, Turkey is called the investment hot spot as it is working towards EU membership and experiencing numbers of tourists (over 18.5 million visitors has already com during first 8th months in 2008).

Coastal property in Turkey is rising in value as a result of increased foreign interest. According to the World Politics Review, as of June 2007, foreigners owned about 23 % of the real estate in the nearby city of Antalya, that even electricity bills came with an English translation.

Even though the rising property prices of between 30 % - 40 % were reported over two years in popular areas in Turkey, the prices are still low comparing to other places with similar climates as Spain or Italy. In Turkey, the two bedroom apartment can be bought for a bit more than 60,000 EUR.

Turkey has also started acting early in this property boom cycle to prevent overdevelopment and crowding in the most popular areas. Despite of that, in some places, which are media-hyped investment hot spots and crowded regions or sometimes even empty fields, lots of uncertain properties are being offered as the ‘cheap’ property with high potential. The investors should be cautious and aware of acquiring such a property that certainly has no prospects and be interested only in reasonable priced property in good location with extra services and facilities.

Residential market

On the other hand, not only foreigners form the real estate market in Turkey; young and growing population of over 70 million – 43% of the Turkish population is under the age of 25 and sizable migration to the country’s cities is taking place, according to Deutsche Bank Research.

Istanbul city is the biggest residential property market in Turkey. Just a small part of residential property suits the needed standards. In addition, there are plenty of local professionals and specialists, who are interested in high-end residential property, what ensures the rental market as well as high rental yields as the mortgage rates are very high in Turkey, so local resident cannot acquire the property with mortgages. Real estate investment in cities such as Istanbul and Izmir has high potential as growing number of residents and new households will ensure that the demand for residential property is going to rise as well.

The EU membership would ensure the investment potential in Turkey, as the investors need to know what the exit strategy of the property investment will be to realize the achieved profit.

Otherwise, the possibility of a worsening in global financial markets, the deepening of the credit crisis and increasing political uncertainties are key risk factors for the near future. Decreasing GDP growth as well as high inflation rate can cause falling disposable income of Turkish residents, so it is more likely that they will not be able to acquire the property.

To sum up, seeking just the pure investment in Turkey is risky now, however, observing the market the great property investments deals may be found soon.

In addition, Turkey can offer perfect opportunities for those, who are looking for holiday home investment or just holiday home for themselves, because the property is quite cheap there. Hot climate, long beaches and growing tourists’ numbers should let collect good rental yields on attractive units in the most popular areas or even more than 8 % if the owners do the letting business themselves.