With the exchange rate standing at well over 4.5 TL to the pound, 3.38 TL to the Euro and almost 3 TL to the US dollar (according to Garanti Bank today), Turks living abroad are now rushing back home to buy up Turkish properties before the November 1st election.
There have been a number of reports and statistics released recently showing a vast increase in the number of Turks abroad choosing to head back home in search of properties whilst the exchange rate is in their favor.
According to the Turkish newspaper Todays Zaman last Friday, the dollar increased by 36% and the Euro went up in value by 22% against the Turkish lira between October 2014 and October 2015. This is a whopping increase and savvy Turks and other foreign investors are taking note. Oceanwide Properties has also seen a marked increase in the number of Turks enquiring about properties both online and at the recent Place in the Sun exhibition in the UK last week.
“I’m not suprised”, says Suleyman Akbay, MD at Oceanwide Properties. “If I was earning a wage abroad in pounds, dollars or euros, I would do the same. I’d invest in property in Turkey before the big election next month. Due to the countries political uncertainty at the moment, the Turkish lira is at an all time low and foreigners are getting far more for their money in Turkey. The exchange rates are making the cost of Turkish properties, and the cost of living here in Turkey, extremely favorable for anyone enjoying a foreign income. I, like many investors here at present, do however think this may be short lived. Although I expect the lira to continue to drop until next months election, I also expect it will then level off and start to regain value soon after.”
It is not just Suleyman that shares this belief. Many financial firms are also predicting the value of the lira to continue it’s decent until after the November 1st election. Even Turkey’s Economy and Finance Minister Mehmet Simsek, in a rare admission by the governing AK Party at a conference in Istanbul last month, said that “the risk to the Turkish economy is it’s political uncertainty”. This was followed by Turkey’s new Deputy Prime Minister in charge of Economy, Cevdet Yilmaz, saying that “the political uncertainty that has hammered the lira will ease following the November poll”.
It was refreshing to read in a report by Anadolu Agency that Angel Gurria, Secretary General of Paris based OECD (Organisation for Economic Co-operation and Development) say that “Turkey is picking up”. At their annual retreat meeting in Istanbul last Friday, Gurria said “global economy is slowing down”and that he predicts that, despite the present political situation, he expects, “Turkish economy will grow 3% this year and 4% next”.
It’s certainly an interesting time for Turkey with the vote in just a few weeks. Early polls reported by CNBC suggest that the AK Party will once again struggle to gain enough votes to form it’s desired single-party rule. This would mean a coalition agreement would once again hit the table, the desired result for many Turks and foreigners with interests and investment on Turkish shores. If this is indeed the case, it is envisaged that the economy will slowly regain value soon after.
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