Turkish lira plunge sees Gulf property investors flock to Istanbul

Turkish lira plunge sees Gulf property investors flock to Istanbul
Foreigners bought 5,367 properties in Turkey during the first quarter of 2018, compared to 4,316 last year. (AP)
Updated 25 August 2018

Turkish lira plunge sees Gulf property investors flock to Istanbul

Turkish lira plunge sees Gulf property investors flock to Istanbul

LONDON: The plunge in the value of the Turkish lira has fueled a foreign investor buying spree for Istanbul apartments, with the most interest coming from Gulf countries, according to market observers interviewed by Arab News.
Investors from the region are seeking to exploit the near 40 percent depreciation of the local currency against the dollar since January as a political spat with the US and market concern about the fragile Turkish economy has stoked a massive sell-off of the lira.
In an interview with Arab News, Cameron Deggin, founder of PropertyTurkey.com said: “In the last few weeks, unique visitor traffic to our site has more than doubled to over 5,000 a day. We can see from the data that most of the interest is from GCC countries, with Saudi Arabia — as the most populous GCC state — in the lead by a significant margin.”
Some of the Saudi interest, but not all, was from people who originally came from other Middle East states such as Jordan, Iraq and Tunisia, but who have had residency rights in KSA for many years, and in some cases are the children of families who arrived one two generations ago.
Over the past five years, Deggin said that Gulf investors had flocked to Istanbul, buying up apartments as second homes. This was more because they felt an affinity with Turkey as a Muslim country with a cultural vibe that they found appealing, rather than because they saw real estate as a canny investment, although the weakening lira has helped. That trend has accelerated this year as the currency crisis has intensified.
“You ask why GCC nationals are buying apartments that may fall further in value, and have already dropped about 35 percent? Well, my answer is that it’s because GCC investors are buying from the heart,” Deggin said. “At each training session, I tell my guys that GCC buyers might be saying they want an investment, but for 90 percent of them, the real motive is lifestyle. They just want a place in Istanbul. Investment is a secondary motive.
“Turkey is a stable country socially, culturally and demographically.”
Deggin predicted that when the lira stabilizes, the buying surge from outside the country will double as some investors with deep pockets were waiting on the sidelines as they were more risk averse.
Up to 2017, he said “if you had dollars in your pocket your investment was going up in value because the price increase was on average higher than the depreciation of lira.”
The big question now is what happens if the crisis worsens with a further cranking up of tensions between the US and Ankara.
Kate Everett-Allen, of global property consultancy Knight Frank, told Arab News: “Turkey has faced a number of political, economic and financial crises in recent years and yet, despite this, foreign interest has proved largely stable.”
Between January and March 2017, there were 4,316 sales to foreign buyers, in the same three-month period in 2018 this figure increased to 5,367 according to data from the Turkish Statistics Office, Turkstat.
For foreign investors, a 10 million-lira villa that would have cost roughly $1.9 million a few weeks ago, would now set them back only $1.57 million, a hypothetical saving of more than $300,000, according to Julian Walker, director of Spot Blue International Property, a London-based Turkish real estate portal, cited in a report by Mansion Global.
Walker said that tourism fuels the property market and this year had already been exceptional in spite of the state’s woes. Turkey logged a record 11.5 million foreign tourists in the first five months of 2018, a 30 percent jump over the same period last year, according to the Culture and Tourism Ministry.
Turkey saw a 22 percent spike in home sales to foreign buyers in 2017, according to a year-end report from the Turkish Statistical Institute.
However, not everyone is relaxed about the Turkish property market. The Guardian warned in a report on Aug. 23 that Turkey’s construction boom was built on cheap foreign loans and that with many construction materials sold in dollars, a crash could be round the corner with developers going bust.
Citing Kajin Bulut, who has worked in senior positions in forecasting and sales for a number of Turkish construction firms, told the Guardian: “The construction sector is like the head of a train — if it goes, the whole country goes.”


Asia to dominate Davos virtual forum as virus-hit West struggles

Asia to dominate Davos virtual forum as virus-hit West struggles
The 2020 WEF, which took place in its usual Swiss Alpine resort of Davos, saw the global elite just starting to worry about a pandemic that surfaced in China a month earlier. (Shutterstock)
Updated 23 January 2021

Asia to dominate Davos virtual forum as virus-hit West struggles

Asia to dominate Davos virtual forum as virus-hit West struggles
  • Spotlight will be on Chinese President Xi Jinping, who will give a speech on Monday — the opening day of the event

PARIS: Emerging stronger from the COVID-19 pandemic, Asia is set to dominate this year’s virtual World Economic Forum as a virus-battered West struggles and a new US president faces particularly daunting challenges.

The 2020 WEF, which took place in its usual Swiss Alpine resort of Davos, saw the global elite just starting to worry about a pandemic that surfaced in China a month earlier.
While the coronavirus leaves a mounting death toll and upends economies, depriving millions of people of work, China and Asian countries in 2021 are making a strong comeback from the virus that hit them first.
In virtual format because of the pandemic, next week’s event is headlined: “A Crucial Year to Rebuild Trust.”
The spotlight will be on Chinese President Xi Jinping, who will give a speech on Monday, the opening day of the event that will last through next Friday.
The big names from Europe will be German Chancellor Angela Merkel, French President Emmanuel Macron and European Commission President Ursula von der Leyen, who heads the EU executive.
US President Joe Biden will not appear at the virtual Davos, which has never been a fixture on the White House calendar — even if the new administration has pledged to revive a US multilateral foreign policy after four years of Donald Trump’s America First approach.
Trump had been an exception as he stopped in Davos twice, with the real estate billionaire enjoying mixing with the global business elite.
Before him, Bill Clinton was the only American president who had traveled to Davos, and that was just once.
Showing up from Asia are China’s and South Korea’s presidents as well as the prime ministers of India and Japan.
Following the first virtual session, Davos will move in May to Singapore, far from the luxury Swiss ski resort where it has taken place since it was launched in 1971, the brainchild of German professor Klaus Schwab.
The stated reason for the changes is health safety.

FASTFACT

The big names from Europe will be German Chancellor Angela Merkel, French President Emmanuel Macron and European Commission President Ursula von der Leyen, who heads the EU executive.

But a virtual forum is not particularly attractive for the world’s well-heeled movers and shakers, who value huddles behind closed doors in fancy hotels over meetings in formal settings.
French insurance-credit group Euler Hermes said in a study this month that the “world’s economic center of gravity” (WECG) has been moving toward Asia since 2002.
“The COVID-19 crisis could accelerate the shifting global balance toward Asia,” it added.
“By 2030, we forecast the WECG, could be located around the confluence of China, India and Pakistan,” the study projected.
The speech by Xi, who addressed Davos back in 2017, seems almost to set the clock back, as if the business world seeks to erase the Trump era.
Four years ago, he presented himself as the champion of free trade, much to the joy of Davos participants who feared the newly elected Trump’s protectionist moves.
Biden is nevertheless sending John Kerry, the special climate envoy who will be welcomed after the new Democratic president has brought Washington back into the Paris climate accord.
The agenda includes workshops titled: “Stakeholder Capitalism: Building the Future” as well as “Advancing a New Social Contract” and “Resetting Consumption for a Sustainable Future.”
In a column published in mid-January, Schwab said 2021 could be a positive and historic year, 75 years after the original “Year Zero” following the devastation of World War II.
“We once again have a chance to rebuild,” he said, calling for rethinking capitalism in the light of a pandemic that has worsened inequality.
He said “COVID-19 has delivered the final blow” to the post-war model where free markets and limited government produced prosperity and progress that now is “no longer sustainable, environmentally or socially.”