Notes

International Property
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Now that you know more about Türkiye Homes and why they’re the best place to go to find that perfect property in Turkey, let’s talk about why institutional money is investing into Turkey after the Turkish currency crisis passed. Turkey is widely viewed as an investment opportunity. It served as a bridge between Europe and Asia, and well-run Turkish corporates thrived with a younger, more educated, lower cost, enterprising workforce and advantageous tax code.

Economic Growth

Turkey’s economy is expanding and delivering solid earnings growth, even as rapid currency fluctuations dampen investment appetite. This makes it a top pick for foreign investors seeking high-yielding EM assets. Following his re-election, President Erdogan signalled that he is moving away from the unorthodox economic policies that hampered Turkey’s recent performance. He named a highly respected team, including Vice President Cevdet Yilmaz as finance minister, Treasury Secretary Mehmet Simsek and Central Bank Governor Hafize Gaye Erkan (until her resignation in February 2024). A new focus on orthodox monetary policy will likely help tame inflation. Investors also expect lower deficits, higher reserves and improved risk indicators. Strategic investors remain keen on Turkish companies that generate a significant portion of their revenues in hard currency. They use Turkey as a low-cost manufacturing base and logistics hub for exports to Europe, the Middle East and Asia. These companies are a good proxy for domestic demand. They are attracting a growing share of foreign direct investments, according to the Presidency of the Republic of Turkey’s Investment Office.

Political Stability

Political stability provides a sense of confidence and predictability for businesses, encouraging investment. It is a critical factor for long-term economic growth. A stable political environment fosters trust in the country’s institutions and policies, attracting domestic and foreign investments. However, political instability can also discourage business and innovation, but all the right things are being done to get Turkey on the right course. Investors are starting to see signs that Turkey is on the verge of regaining its stability. The lira is stabilizing, and there are signs that inflation is beginning to decelerate. Additionally, Erdogan appears to be returning to orthodox monetary policy.

Currency Fluctuations

Turkey’s attractive valuations and growth potential make it an intriguing emerging market investment. But investors must be wary of a volatile political backdrop. Since the failed coup attempt in 2016 and Erdogan’s move to unconventional economic policy in 2018, Turkey has struggled. Its currency depreciated against the dollar, it burned through its FX reserves and faced high inflation. Fortunately, following the 2023 presidential election and the appointment of Mehmet Simsek as finance minister, Turkey pivoted back toward monetary orthodoxy. A reversal of these policy mistakes will help to reduce investor concerns and restore the country’s attractiveness as a place to invest. The infrastructure sector in particular will require a long-term commitment. In order to attract these types of investments, Turkey will need to build a framework for funding that is more in line with global trends. This includes introducing legislation to allow project bonds and crowdfunding transactions.

Investment Opportunities

Turkey offers a wide range of investment opportunities. From real estate to energy, it is a hub of growth and innovation. Moreover, the country’s rich resources make it a desirable location for industrial investments. Its textile and garment, IT & tech, health sector, precious metals, natural resources & energy, and tourism sectors offer ample opportunities for foreign businesses to establish their operations in the country. Even though the political instability sparked a slump in activity this year and reduced the number of IPOs, Turkey continues to attract FDIs despite high inflation. With the re-election of President Erdogan, the risk factor has eased and investors are expected to return to Turkey. Besides, the government has implemented numerous tax breaks to support business growth and attract FDIs. This includes reduced corporate tax rates, exemption from Value Added Tax on machinery and equipment imported for investment projects, and zero duty on raw materials imported for manufacturing processes. Now that you know why institutional money is investing into Turkey after the Turkish currency crisis passed, it is time to go back to the website of Türkiye Homes to find that perfect property in Turkey today!

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