Throughout 2008 Turkey's economy proved to be resilient enough to cope with the challenges of the global economic crisis, says the report from international property consultants CB Richard Ellis.
Institutional reforms, export growth, a vigorous privatization programme and the EU accession talks all helped Turkey perform strongly compared to many other countries in the world, said Feroze Bundhun, the managing director of CB Richard Ellis in Istanbul.
The report points out that the Turkish real estate market is slowing like many others in the world. In the second half of last year the pace of economic growth slowed following contractions in domestic demand, export markets and foreign investment. And in the third quarter the economy grew by only 0.5% compared to a growth rate of 4.25% in the first half of 2008.
However, it also points out that Turkey's banking system does not have the same exposure to toxic assets compared to its European counterparts. Most Turkish banks have a Capital Adequacy Ratio of 13% or above and the sector's average stands at 18.9%. The banks are maintaining high liquidity levels and are only marginally handicapped by the non-availability of the wholesale banking market.
Bundhun said that a strong banking sector is probably the biggest advantage Turkey has over other emerging economies. 'Banks are healthy, liquid and still lending to the real estate market. On the whole, Turkey benefits from a reasonable infrastructure, a healthy regulatory environment and transparent bureaucracy,' he added.
He said another advantage is the relative ease with which investment channels operate. Turkey enjoys relative political and economic stability and the outcome of local elections at the end of this month is likely to be in the governing party's favor.
Although the economic downturn has had a negative impact on new projects, most sectors in the real estate market continue to perform satisfactorily, the report continues. Equilibrium exists in the office sector in terms of supply and demand and, as a result, the rent levels remain stable at around $30 square meter. Capital values for good quality office space are in the region of $3,500 square meter. Many international companies are still entering the Turkish market, enabling rental and capital values to remain at a high level.
