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Why To Invest In Turkey?

Real Estate

Turkey has undergone a profound economic transformation over the last decade and its economic fundamentals are quite solid. It is the 17th largest economy in the world and the 6th largest economy in Europe with a current GDP of approximately USD 820 billion in 2013.
The advantageous geographical location, population growth and demographic advantage, the increase in income per capita, extensive urban renewal and development, large capacity and power in the construction sector and ease of doing business are the demand drivers of the Turkish real estate sector. The real estate sector in Turkey represents 19.5 percent of the total GDP, which brings great investment potential to the sector. The share of the real estate sector in GDP increased by 2.3 percent in 2000 and by 3.8 percent in 2012.The average share of construction, real estate, rental and business activities and new house sales in total GDP increased by 16.7 percent between 2000 and 2005. However, the sharpest increase was observed between 2006 and 2009 with 20.5 percent.
Looking at the investment side, it is seen that the FDI inflow rose to USD 12.5 billion, whereas real estate and construction received USD 1.6 billion of the total FDI in 2012. Following the enactment of the reciprocity law, sales of real estate to foreigners started to increase and reached USD 2.64 billion in 2012. The Ministry of Environment and Urbanization announced that real estate sales to foreigners increased from 2 percent to 5-6 percent in the last ten months of 2013.
As regards major facts and figures about the current situation, strategic plans and the future projects in the pipeline, Turkey’s real estate sector bears huge potential for investors.

  • The number of houses sold reached 290,000 in the property market in 2012.
  • 299 shopping centers with a total gross leasable area of 8.2 million square meters are operational in Turkey.
  • Office construction licenses obtained throughout Turkey increased 27 percent, reaching 6.84 million square meters.
  • According to the Turkish State Railways’ (TCDD) investment program, USD 240,145 million will be spent on building logistics centers.
  • As of 2012, there are a total of 2,870 licensed hotels with a total bed capacity of more than 700,000, while there is still a gap between supply and demand.

In addition, targets are being set and development also continues in urban renewal projects and for mega projects. The Turkish government has decided to renew and retrofit buildings that are prone to destruction during natural disasters, which includes 6.5 million residences, with a budget of USD 400 billion. With its existing potential, mega projects and ambitious targets set for 2023, Turkey offers great opportunities for investors in the real estate sector.


Turkey, as a well-known tourism destination, continues to present investment opportunities both in the established and newly developing subsectors of the industry. Turkey is currently the 6th most popular tourist destination in the world, attracting more than 30 million tourists each year, and the number continues to rise every year. The Turkish tourism industry’s energetic and continuous growth remains unhindered by the negative effects of the recent global economic crisis, while retaining immense untapped potential. The robustly growing industry is enriched by its wide variety of tourist attractions, such as breathtaking coastlines along the Aegean and Mediterranean seas with long sandy beaches and pristine bays. Adding to Turkey’s natural riches, the country is the birthplace of many ancient civilizations that left their mark in history. The Anatolian Peninsula has a vast number of archeological sites inherited from various empires and diverse cultures, some dating back millennia. From Ephesus to the West and Mount Nemrut to the East, it is common to encounter sacred sites, temples and religious grounds belonging to various cultures and beliefs.
Further contributing to Turkey’s strong socio-economic growth, the Ministry of Tourism and non-governmental actors of the tourism industry are working towards increasing tourism receipts by utilizing the full potential of diverse opportunities in this key industry. The Turkish government offers programs and pursues policies that offer reduced utility prices and reduced tax rates, while decisively eliminating any bureaucratic barriers that may hinder sectorial growth. 
Elimination of almost all bureaucratic procedures for admittance of foreign patients to receive treatment in Turkish hospitals contributed to the steady growth of the health tourism sector. Furthermore the redesigning of environmental protection policies has fostered development in newly discovered eco-tourism opportunities.

  • Turkey is the 6th most popular tourist destination in the world with an ever-increasing number of visitors. From 2007 to 2012, the number of international tourist arrivals increased 37 percent, reaching more than 31.5 million foreign visitors.
  • The Turkish tourism industry has grown above the global average in recent years and the direct contribution of the industry to the GDP reached USD 30 billion in 2012.
  • The tourism sector targets 60 million tourist arrivals and revenues of USD 80 billion by 2023.
  • Istanbul Atatürk Airport had more than 45 million visitors in 2012, of which 29 million were passengers on international flights.
  • 25 million passengers flew to Antalya Airport in 2012; 20 million of these passengers were passengers on international flights. Antalya Airport has more than 50 different airways flying from/to more than 75 destinations. Antalya Airport is ranked the 21st busiest airport in the world by number of international passengers.
  • In 2012, the number of airline passengers in Turkey exceeded 130 million.
  • In terms of geothermal tourism potential, Turkey is among the top seven countries in the world and ranks 2nd in Europe with its 1,300 thermal springs. Bed availability in thermal vacation resorts has reached 35,000.
  • Turkey has 7,200 km of coastline and offers beautiful beaches; has 355 blue flag-beaches and ranks 4thamong 38 countries. There are also 19 blue flag-marinas in Turkey.
  • Turkey is an emerging destination for golf tourism, with 15 operation licensed golf tourism facilities. Most golf courses in Turkey use Bermuda grass, which is perfect for a Mediterranean climate and can be used for more than a decade.


Economic Outlook

The Turkish economy has shown remarkable performance with its steady growth over the last decade. A sound macroeconomic strategy in combination with prudent fiscal policies and major structural reforms in effect since 2002 has integrated the Turkish economy into the globalized world, while transforming the country into one of the major recipients of FDI in its region.
The structural reforms, hastened by Turkey’s EU accession process, have paved the way for comprehensive changes in a number of areas. The main objectives of these efforts were to increase the role of the private sector in the Turkish economy, to enhance the efficiency and resiliency of the financial sector, and to place the social security system on a more solid foundation. As these reforms have strengthened the macroeconomic fundamentals of the country, the economy grew with an average annual real GDP growth rate of 5 percent over the past decade between 2002 and 2012.

Average Annual Real GDP Growth (%) 2002-2012

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Source: OECD, Eurostat and national sources

Moreover, Turkey’s impressive economic performance over the past decade has encouraged experts and international institutions to make confident projections about Turkey’s economic future. For example, according to the OECD, Turkey is expected to be the fastest growing economy of the OECD members during 2012-2017, with an annual average growth rate of 5.2 percent.

Annual Average Real GDP Growth (%) Forecast in OECD Countries 2012-2017

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Source: OECD Economic Outlook No: 91, June 2012


Together with stable economic growth, Turkey has also reined in its public finances; the EU-defined general government nominal debt stock fell to 36.3 percent from 67.7 percent between 2003 and 2013. Hence, Turkey has been meeting the “60 percent EU Maastricht criteria” for public debt stock since 2004. Similarly, during 2003-2013, the budget deficit decreased from more than 10 percent to less than 3 percent, which is one of the EU Maastricht criteria for the budget balance.
As the GDP levels increased to USD 820 billion in 2013, up from USD 305 billion in 2003, GDP per capita soared to USD 10,782, up from USD 4,565 in the given period.
The visible improvements in the Turkish economy have also boosted foreign trade, while exports reached USD 152 billion by the end of 2013, up from USD 47 billion in 2003. Similarly, tourism revenues, which were around USD 14 billion in 2003, exceeded USD 32.3 billion in 2013.


Significant improvements in such a short period of time have registered Turkey on the world economic scale as an exceptional emerging economy, the 16th largest economy in the world and the 6th largest economy when compared with the EU countries, according to GDP figures (at PPP) in 2013.

  • Institutionalized economy fueled by USD 135 billion of FDI in the past decade
  • 16th largest economy in the world and 6th largest economy compared with EU countries in 2013 (GDP at PPP, IMF-WEO)
  • Robust economic growth over the last decade with an average annual real GDP growth of 5.1 percent 2003-2013
  • GDP reached USD 820 billion in 2013, up from USD 305 billion in 2003
  • Sound economic policies with a prudent fiscal discipline
  • Strong financial structure resilient to the global financial crisis

Macroeconomic Indicators

Fiscal discipline and a tight fiscal policy continue to be the main pillars of Turkey's economic program, and both have contributed substantially to disinflation, as well as to the strong growth performance. In addition to its sound macroeconomic policies, Turkey has implemented a comprehensive and far-reaching structural reform agenda. Compared with the experiences of other countries, Turkey's success has been remarkable, primarily on the back of its speed in carrying out structural and institutional changes. Indeed, Turkey has made great progress in restructuring its financial sector, as well as in improving public sector governance and its business environment.
The structural reforms that have been implemented are aimed at:

  • increasing the role of the private sector in the Turkish economy,
  • enhancing the efficiency and resiliency of the finance sector,
  • placing the social security system on a more sound basis.

These reforms have strengthened macroeconomic fundamentals of the Turkish economy.

Economic Growth

Sound economic policies combined with vigorous economic reforms have yielded favorable results; the economy has sustained robust economic growth over the last decade. Due to resolutely implemented structural reforms and successful macroeconomic policies, Turkey has become one of the fastest-growing economies in its region.
Between 2003 and 2013:

  • GDP increased by 180 percent, reaching USD 820 billion
  • Annual average real GDP growth of 4.9 percent
  • Public debt stock decreased from 74 percent of GDP to 36.3 percent of GDP
  • Budget deficit decreased from 10 percent of GDP to 1.2 percent of GDP 


Compound Annual Growth Rate (CAGR) of GDP (%) - Constant Prices

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Source: Turkish Statistical Institute (TurkStat)

In the past ten years, the Turkish economy has been one of the fastest-growing emerging economies.

Average Annual Real GDP Growth (%) 2003-2013

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Source: IMF World Economic Outlook April 2014,
Turkish Statistical Institute (TurkStat)

Turkey was the fastest-growing economy in Europe and one of the fastest-growing economies in the world in 2010 and 2011.

Real GDP Growth (%)

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Source: IMF World Economic Outlook April 2014,
Turkish Statistical Institute (TurkStat) 

While the Turkish economy has been growing steadily, living standards have increased significantly. GDP per capita increased from the level of USD 4,565 in 2003 to USD 10,782 in 2013.

GDP per Capita - Current Prices (USD)

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Source: Turkish Statistical Institute (TurkStat)

GDP - Current Prices (USD billion)

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Source: IMF World Economic Outlook, April 2014 and TurkStat

Prudent Fiscal Policy

Fiscal discipline continues to be the cornerstone of the macroeconomic performance of the Turkish economy. Thanks to this prudent fiscal policy, Turkey has reduced its debt stocks, becoming one of the best performers among the European economies in reducing government debt. The general government debt stock ratio has been meeting the EU Maastricht Criteria, 60%, since 2004.

EU-Defined General Government Debt Stock (% of GDP)

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Source: Undersecretariat of the Treasury 

EU-Defined General Government Budget Balance (% of GDP)

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Source: European Commission's Directorate-General for Economic and
Financial Affairs (ECFIN)

General Government Debt Stock (% of GDP)

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Source: Undersecretariat of the Treasury and Eurostat 

General Government Budget Balance (% of GDP)

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Source: European Commission's Directorate-General for Economic and
Financial Affairs (ECFIN) and Eurostat