Turkey elections: positive result for property hunters

Monday, March 31, 2014

Turkey elections: positive result for property hunters

Turkey's global reputation has not had a great couple of weeks.

The government's blocking of Twitter and YouTube, on the back of persistent whispers of internal corruption was followed by violence on the day of the Turkish local elections - Sunday 30 March.

Yet things have calmed down since Prime Minister Erdogan's governing party obtained a clear victory at the elections - a major national test seen as clear proof of the continued support for his government.

Erdogan's AKP (Justice and Development Party) managed to win Istanbul and Ankara as the two most important cities in the country, the largest city - the business hub of Turkey and the capital respectively.

"The results certainly point to unwavering popularity of Erdogan and his ruling party AKP," says Cameron Deggin of propertyturkey.com.

"Despite being challenged heavily and at times ruthlessly by the opposition in what became an openly conducted smear campaign against Erdogan's inner political and private circle, votes in support of AKP did not wane.

"Over 92 per cent of 52 million people eligible to vote in Turkey turned out to vote on Sunday."

So, what are the implications for Turkey - economically and politically?

Turkey's exports and general welfare have improved visibly under AKP.

Since assuming power in 2002, AKP has seen Turkey through several chapters of economic reforms, including major privatisations, strict monetary and fiscal policies that resulted in curbing inflation from over 80 per cent to around 8 per cent per annum and delivering up to 8.9 per cent year on year GDP growth in 2008 - 2013 periods.

From the inevitable collapse of 2001, that saw international companies wiping 45 per cent off their balance sheet valuations overnight, the Turkish Lira has come a long way in demonstrating a stable and strong currency for trade and international business.

It was not until mid 2013 that the scenario started changing. Turkish Lira started to slide against USD, same as most emerging market currencies, due to US tapering of its quantitative-easing programme implemented back in 2008.

As Russia, India and several other emerging markets recorded up to 35 per cent losses in May - August 2013 period, Turkish Lira proved yet again more stable and managed to hold at around 20 per cent drop.

Various allegations of wrong-doings against prominent figures in the Parliament signalled political instability to the international markets, causing stocks and currency to depreciate further.

"The above explains some of the reasons as to why these local elections were seen as far more important than just electing heads of constituents in Turkey," says Deggin.

"The elections were more of a barometer as to continued popularity and general 'trust' in Erdogan and his ruling party, a barometer, which now a day after the elections, strongly signals continued support and hence political stability."

On the morning of 31 March 2014, Turkish Lira opened against USD at 2.15, which is almost 5 per cent up on prior week. It appears Turks voted for continued prosperity.

"The result of the elections are actually far more positive than meet the eye," suggests Deggin, who suggests there have been a fair few buyers waiting to see what happens on March 30th.

"Continued stability and development will see strong economic growth, which will undoubtedly increase domestic and foreign demand for quality housing in all parts of Turkey, pushing up property prices and presenting investors with exceptional gains.

"Average annual GDP growth expected in Turkey is almost three times that expected in the eurozone within next five years, therefore it is inevitable that compared to Euro zone Turkish real estate will be a clear winner for lifestyle and investment.

Seize the moment before the Turkish lira strengthens further and search here for properties for sale in Turkey.


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