current economic crisis summary

current economic crisis summary

Turkey Property is a Wise Buy in the Current Economic Climate

Turkey has developed a reputation as a value-for-money destination, helping to boost the country’s popularity as a property investment destination. Spurred by relatively cheap property prices, demand for Turkey property is growing.

Weak Turkish currency
A recent report from the Post Office named Turkey as one of the world’s most affordable places for Brits’ to visit, due to sterling’s strength against the Turkish lira. Yet, the Turkish currency is expected to fall in value in 2009, according to Deloitte Turkey, making already low property prices even more affordable.

“It (the Turkish lira) started the year (2009) relatively weak due to a 200 basis point interest rate cut by the Turkish Central Bank,” says Homes Overseas’ Percy Pound.

Robert Nixon, executive director, Nirvana International, comments: “From a British buyers perspective the purchase of property in Turkey is a wise move in the current economic climate as it is outside the eurozone and therefore your pound goes further.”

Turkey, which now attracts around 25 million tourists each year, was last year named number one holiday destination for British tourists. Nonetheless, international visitor numbers to Turkey are expected to rise further this year. Travel association body, ABTA, predicts that Turkey will be one of two “big growth areas” in 2009, along with Egypt.

The economy
The Turkish economy, which is partly and unsurprisingly reliant on tourism, appears to be well equipped to withstand the current global financial calamity, after recovering from its own crisis in 2001.

A levelling up situation – wage inflation, growing prosperity and access to less constrained mortgage finance – is driving greater domestic and international demand for properties in Turkey.

Mortgages in Turkey were introduced in 2007, enabling buyers under the age of 75 to borrow up to 80 per cent of the property’s value for a maximum term of 20 years, according to Eric Kaya, director of Cumberland Properties. Mortgage borrowing rates currently start from around 5.8 per cent.

Kaya says that the previous inability to obtain mortgages was “stifling demand, preventing people from buying property and holding our (Turkey’s) economy back. The new mortgages that are now available are good news for both Turkish and overseas buyers.”

He adds: “Prices of property in Turkey are a lot cheaper than much of the rest of Europe” and this presents “a lot of opportunities for investors to make very good returns from property.”

The Turkish Statistical Institute shows that there are now around 73,000 overseas nationals registered with Turkey’s Land Registry, many of who will have benefited from recent capital growth.

Property price growth
Estate agent, Aston Lloyd, reports that average Turkish property prices appreciated by 7.3 per cent between 2004 and 2008. Given Turkey’s economic strength, combined with a general housing shortage, hopes of joining the European Union and a maturing mortgage market, Turkish property prices should strengthen further moving forward.

However, there are signs that property price growth may slow across some parts of the country or even depreciate in the short-term, as the worlds’ economy all but grinds to a halt.

Economic caution
Despite the country’s seemingly strong economic position, Turkey’s economy will potentially face a tough year in 2009, having made around £51 billion of financial obligations, according to Deloitte Turkey in its Economic Outlook 2008.

This means that the country will need to raise money in financial resources to cover a current account deficit and matured debt, according to the report. Consequently, an agreement with the International Monetary Fund will be vital to help produce these funds.

Nevertheless, the medium to long-term outlook for Turkey’s economy looks positive, which should in turn benefit the country’s maturing housing market.

Turkish news provider Hurriyet estimates that the rapid growth of the country’s tourism industry will contribute to a property boom in 2010, while investment banking firm Goldman Sachs estimates that Turkey will become the world’s ninth largest economy by 2050.

Where to buy

Istanbul
With a rapidly growing young population of over 10 million inhabitants, developers are whipping up new residential units across the city to meet growing demand for homes.

Prices of property in Istanbul reportedly jumped annually by up to 40 per cent between 2002 and 2005, after a law was introduced, permitting foreign nationals to purchase property in Turkey in their own name. Although capital growth in the city has since slowed, there are signs that prices of Istanbul property will continue to appreciate moving forward, especially as the city will be crowned European Capital of Culture for 2010.

Furthermore, some of the greatest rental yields in Turkey can typically be found in Istanbul, with an average rental return of 7.54 per cent currently achievable, according to the Global Property Guide.

Nixon says: “The rental market [in Turkey] is very good and being fuelled by the continued popularity of Turkey as a summer holiday destination, as well as by local demand, particularly in Istanbul,

“There is excellent potential for long-term lets to professionals [in Istanbul],” says Nixon. “Such is the confidence in the letting sector that many developers operating in Turkey offer rental guarantees. We are currently selling property with a 5-year rental guarantee at 9.5 per cent”.

Bodrum
Away from Istanbul the Turkish government is making significant investment in infrastructure improvements, particularly in places like Bodrum, located along the Aegean coastline, in southwest Turkey. This popular yachting and tourist hub attracts an estimated 70 per cent of all tourists that visit Turkey each year.

Cumberland Properties is currently marketing a luxurious gated development in the region, Seaview Regency, which features 19 contemporary three-bedrooms, three-bathroom, detached and semi-detached villas situated on a hillside overlooking the bay of Kucukbuk. Prices for Bodrum property here start from £165,000.

Altinkum
A cheaper alternative to Bodrum is Altinkum, located 75 minutes from Bodrum airport, where prices for new-build property in Altinkum start from under £20,000.

Kusadasi
Before Bodrum was the most popular holiday home destination in Turkey, Kusadasi, situated to the west of Turkey, was originally the most popular destination for British tourists visiting Turkey, during the 1990′s. However, the region’s popularity with Brits’ fell after most flights from the UK were redirected to Bodrum, due to cheaper landing costs.

“Enquires from Brits’ for homes in Kusadasi have risen substantially in recent months,” says Tracey Ogretici of Elite Homes Turkey. “The fact that property prices in the area are not over inflated, with new-build units starting from just £30,000, means that an investment in property in Kusadasi is a safe one, as homes are not likely to fall in value.”

Belek
Golf is seen as a major catalyst for attracting more tourists and second homeowners to Turkey. With mass infrastructural improvements taking place and the prospect of up to 15 new local golf courses, Belek is a highly sought after area to own property.

Set in Turkey’s Antalya Province on the southern Mediterranean coast just 20 minutes from the Antalya international airport, this year-round destination offers a range of attractive beaches, as well as archaeological sites, such as museums and bazaars. New-build property in Belek currently start from under £60,000.

Alanya
Although the overall standard of accommodations in Alanya, which is also situated in the Antalya Province, remains somewhat inadequate, attempts are being made to improve build-quality.

“We expect branded developers to start building property in Alanya City over the next few years,” says Ali Pusat of prominent construction firm Koray. “Alanya has the potential to replicate Spain’s property success, without the oversupply of homes.”

Koray has joined forces with developer BPI to build the Hill, located in Konakli, Alanya. Apartment prices at the hillside development, which will feature a selection of modern one to three-bedroom properties in Konalki, a stone’s throw from the beach, start from £89,000.

Amongst some of the other popular choices are: property in Marmaris, property in Fethiye, property in Dalaman, and property in Dalyan.

Summary
With a number of low-budget airlines now flying into Turkey, a burgeoning property market, a strengthening economy, and plans to join the European Union, the ingredients seem right to buy into Turkey’s residential property market – whether for investment or personal reasons.

However, despite all the positives, Turkey still lacks transparency. Tales of corruption and rogue housebuilders are not uncommon, and so it is necessary to approach any purchase of Turkey property with caution. Ensure that you seek independent legal advice and conduct appropriate due diligence before committing to buying a house in Turkey.

About the Author

Marc Da-Silva for Homes Overseas.
Search our extensive range of Turkey property. In particular, view our range of property in Altinkum.
Homes Overseas – International property experts since 1965.

Where can I find a summary of how the economy is doing?

There is a lot of information out there about the economic crisis, but I need specific data and numbers. Does anyone know of a good article, website, etc. that provides the most important facts in one place? Also, if anyone can provide a source that relates the current situation and the effect on families/marriages, I’d appreciate it.

America’s Current Economic Condition
America today is burdened with deeply rooted and unsustainable economic challenges. From credit debts and loss of manufacturing nationwide, to foreign nations buying our best companies and proping up the economy with loans, these issues impact every citizen. Here are the 16 major problems America faces today:

1. Wholesale sellout of core strategic assets to foreign acquirers: according to official figures, more than 16,613 American companies have been sold to foreign corporations in the last 30 years. Total foreign purchases total more than $1.5 trillion.

2. Subprime Fallout: more than one million home foreclosures have occurred in the first nine months of 2008 due to sub-prime lending. These negligent acts of predatory lending have taken houses from innocent homeowners and robbed the ability of deserving individuals to attain credit. The criminal behavior has also crippled America’s financial institutions. Banks such as IndyMac and Bear Sterns have collapsed while mortgage giants, Fannie Mae and Freddie Mac, seek a government bail-out to help shore-up $12 trillion in guaranteed home loans.

3. Housing Bubble Burst: America’s homes have hit their lowest value and sales rate while foreclosures soar. The median home value, as of June 2008, was $215,100, down 6.1 percent from the previous year. Home sales reached their lowest level in 10 years at an annual pace of 4.86 million, down 2.6 percent from June of 2007. Home values in 20 major metropolitan were down 15.8 percent while foreclosure filings rose 121 percent from the second quarter of 2007 to 2008.

4. Decline of vital industries through bankruptcy, foreign predatory competition, and foreign acquisition: examples include steel, publishing, textiles, machine tools, automobiles, electronics, movies and others

5. Inability to manufacture competitively: American manufacturers suffer a 22 percent structural cost disadvantage compared to overseas competitors through taxes, health and pension benefits, litigation, regulation, and unequal environmental protection

6. Overdependence on imports: $1 in $4 of US consumption of manufactured goods now goes immediately and directly to imports

7. Massive wealth transfer to foreign ownership: our trade deficit, at $711.6 billion in 2007, equal to almost $1.3 million per minute

8. Loss of job and career opportunities for people at all educational levels: 3 million high-paying manufacturing jobs lost over past 5 years

9. Insourcing of foreign manufacturers destroys our domestic industries, takes profits and taxes overseas, and provides only low-skill jobs for American workers: foreign manufacturers operating in the US now account for over 20 percent of our exports and manufacturing assets, and a large percentage of our employment

10. Dependence on foreign financing of vast majority of government debt: foreign countries now control more than 44 percent of our total federal deficit and finance nearly 100 percent of all new borrowings. Our competitors are now our bankers. China, Japan, Great Britain and Saudi Arabia account for more than $2.3 trillion in loans. Japan holds around $517.2 billion while China holds nearly $405.5 billion in loans.

11. Outsourcing key manufacturing, research, and design: unchecked offshore outsourcing benefits individual companies and shareholders but destroys entire industries and communities

12. Transition to services-oriented economy: high-paying goods-producing industries have lost net employment over the past 25 years while lower paying non-tradable service-providing employment has nearly doubled. Most new jobs are only in service positions in bars, resturants, hotels and hospitals

13. Lost scientific, engineering, technological prowess: in 2004, China and India graduated a combined 950,000 engineers versus 70,000 in the US. US ranks near the bottom of science/math proficiency

14. Record levels of personal and government debt: household liabilities at record levels, federal government adding record levels of debt each year financed mostly by foreign countries, trade deficits transferring unprecedented accelerating amounts of wealth to foreign hands each year. In 2005, the average U.S. savings rate was a negative 1%

15. Misleading commonly used economic statistics: misleading incomplete statistics like GDP, job creation, and productivity belie our crumbling economic infrastructure. In June 2007, Businessweek reported that 40% of the gains in manufacturing could be non-existent due to a miscalculation known as “phantom GDP.”

16. Proven failed trade policies and other legislation contributing to our demise continue unchallenged: destroying our industry and allowing our assets to be sold or taken from us

Information was obtained from economyincrisis.org

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