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Istanbul Property: A Safe-Haven Emerging Market Investment

By Liam Bailey Created: January 13, 2012 Last Updated: January 13, 2012
Related articles: Business » Real Estate
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The Istanbul skyline is seen in this file photo. (Courtesy of PropertyShark)

The Istanbul skyline is seen in this file photo. (Courtesy of PropertyShark)

As we look around the world—where economies are now not only recovering from one epic financial crisis, but trying to either stay out of, get out of, or minimize their exposure to, a second crisis—it is a struggle to find anywhere that looks like a good place to invest, save for things such as structured property investments. One place that really is standing out right now is Istanbul, which is currently appealing both to emerging markets investors and wealthy investors seeking a safe haven.

Prime property in prime locations is now proven as resilient against financial shocks. So, with cash devaluing at an alarming rate, the world’s wealthy along with institutional investors are now buying up such properties as safe-haven stores for their wealth.

Ski property in the premier Alpine resorts of Switzerland and France, chic apartments in Chelsea, Knightsbridge, and apartments and townhouses in London’s other pricey places, plush pads in Paris, and high-life homes in Hong Kong, are all providing such wealth store services as described above—but so is Istanbul.

What? Istanbul is an emerging market, isn’t it? Correct. Turkey is the fastest growing economy in the world, and Istanbul is its top emerging market. Istanbul’s population is among the fastest growing in Europe, both in terms of affluence and numbers. This, combined with high liquidity fueling incredible growth in Turkey’s immature mortgage market, is leading to demand for Istanbul property far outstripping supply.

Thus, as an emerging market few places in the world can rival Turkey: Natal in Brazil, maybe Pattaya in Thailand (but it loses out on political stability, over which there are still doubts over), Tangier in Morocco, and that’s about it.

Istanbul’s unique position as a geographic and cultural “intersection,” … places it among the most desirable locations in the world for property investors and the super-wealthy.

But according to Sotheby’s, Istanbul is also becoming one of the safe-haven destinations where the world’s wealthy individuals store their wealth in prime property, and where institutional investors make their low-risk acquisitions.

Some areas of Istanbul have become as attractive as marquee addresses in London and Paris, says Turkey Sotheby’s International Realty General Manager Arman Özver.

Özver told Sunday’s Zaman that Istanbul’s unique position as a geographic and cultural “intersection,” with its rich history and culture, combined with its well-developed financial system and sound infrastructure, place it among the most desirable locations in the world for property investors and the super-wealthy. “Istanbul is able to compete in every sense with those metropolises,” Özver said in reference to London and Paris.

Özver believes that areas such as Istanbul’s Nisantasi and the picturesque properties that line the Bosphorus have achieved the same status, being increasingly regarded by wealthy investors as a “safe haven” asset class, immune from fluctuations in the wider economy.

“Nisantasi is the same [as Knightsbridge, Central London], and if rental or sale prices in Istanbul collapse by 50 percent, prices for buildings like these [Sotheby’s office in an art nouveau building in Nisantasi] will maintain their value, because this [property] is unique,” he said.

This is the first article in a series of stories following real estate in major cities around the globe. The article was written by Liam Bailey for PropertyShark.com on behalf of Select Resorts, a leading overseas property agent currently marketing property in Turkey. Property Shark is a property search site with market data for New York City and New York state.




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