Turkey Benefits From Financial Meltdown In Europe
Turkey Benefits From Financial Meltdown In Europe
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Home Page > Finance > Turkey Benefits From Financial Meltdown In Europe
Turkey Benefits From Financial Meltdown In Europe
Posted: Apr 25, 2010 |Comments: 0
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Turkey property is likely to see continued benefits from the dire state of many European economies in comparison, and — arguably for a shorter time — from the strength of the euro compared to the lira in relation to the pound.
Turkey used to be the lesser of budget hot destinations in Europe. Despite its lovely climate, long seasons, and the fact that it has a gorgeous coastline to both the Mediterranean and the Aegean sea, Turkey was still overlooked by many in favour of Greece, Spain, Italy and Portugal — not necessarily in that order.
Not anymore. Firstly Turkey became a more popular tourism, investment, and holiday home destination, because the pound came down to near parity with the single European currency. This meant that people could no longer have a cheap holiday in Spain, not really, and so they turned their attentions to destinations outside the euro zone, like Turkey.
This phenomenon was hugely beneficial in the Turkish tourism industry throughout 2009. According to the Association for British Travel Agents, tourism from Britain to Turkey had been increasing at around 20% per year before 2009, at which point the added benefit of the strong euro was expected to push this growth up to 25%. It is widely agreed that holiday home sales increase almost in line with tourism growth.
The euro is still a lot stronger, but the pound has started to make some gains in recent months, due to the financial meltdown in the Eurozone as explained below.
More recently property in Turkey has seen benefit from the near financial collapse of its main rivals. Sure, their economies collapsed a long time before, but only recently has there been real fears over the financial solvency of several whole countries, including Greece and Spain (as well as the UK and Ireland).
We have all heard about this: it started with Greece, which had been struggling to bring down a 9% budget deficit for some time before the international financial crisis, which then pushed this deficit up to 12%. This caused investors and lenders to start getting jitters about whether Greece would ever be able to bring its deficit under control. This then brought to light the roaring deficits of several other economies, with the question: what makes them any different.
Meanwhile, Turkey is sitting with a deficit of around 5% and enjoying what looks like one of the strongest recovery cycles in the EU. Turkish industrial production grew 12% in January, and 18% in February according to Turkstat. The prediction is for a year-on-year GDP growth of 10% or more for this first quarter, following a 6% growth in the final quarter of last year, also year-on-year. It is little wonder that Turkey’s popularity with holiday home buyers and investors continues to increase exponentially.
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About the Author:
Mark Burns is a Director of Offplanworld.tv, an overseas property consultancy specialising in off-plan property abroad, offering a wide range of property in Turkey.
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