Turkey has enjoyed incredible rates of economic growth during the last couple of years, as it was recently confirmed GDP grew by 8.5% last year, and by 9% the previous year. Even though economic growth has begun to slow, the property industry is still booming. One example is the Macka Residences complex in Istanbul which is a $300 million development of 98 units.
All but 14 have been sold already even though the project isn’t due for completion until summer. While some of the more modest one-bedroom flats are achieving prices in excess of $1 million, the penthouse apartments have price tags of $20 million. Although these prices may not be typical they do illustrate the growing popularity of the city.
However it’s not all good news, as there are worries about the economic slowdown and the current account deficit, and how it might impact the construction and property industries. Some experts think Istanbul has a bit of a housing glut, and are worried about a bubble forming even though demand is still outstripping supply.
The problem is many projects are geared towards the wealthy, and there’s little available for those on lower salaries. Each year Istanbul needs an extra 15,000 housing units to cope with the growing population, and more people are choosing to live alone which is adding to the problem.
During the fourth quarter of last year construction grew by 7% throughout Turkey, exhibiting much less of a slowdown than other parts of the economy. This sector employs around 2 million people, and most are engaged in building residential property, although there are a growing number of shopping malls being built, and one suburb in Istanbul is notable for having no less than 20 of them.