A combination of affordable property and high demand means Turkey is the best place to invest in second homes in Europe.

That is the view of the Global Property Guide Property Recommendations mid 2010 report, which says gross rental yields are currently at 5.48% with “significant potential for growth” - especially in cities such as Istanbul.

“I believe that Turkey, and Istanbul in particular, presents one of the most attractive property investment opportunities available in Europe today,” says Steven Worboys, MD of Turkey investment property company Experience International.

Appreciation in value and future earnings were among the key factors looked at in the report, with rental yields currently topping those in Italy (5.04%), France (3.85%), Spain (3.81%) and Portugal (3.63%).

A shortage of housing in the country means rental yields and capital gain are forecast to increase further, explains Worboys.

And there is help available for investors: one development in the Beylikduzu area of Istanbul offers two-year protected rental guarantees of 7.5% and up to 70% finance, for example.

High GDP growth is also expected in Turkey with 12% forecast by the Turkish Finance Minister for the first three months of this year.

Perhaps more significantly, 6.7% per annum is predicted by the Organisation for Economic Co-Operation and Development (OECD) between 2011 and 2017.
 

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Mortgage quotes for Turkey doubled in May
Many say that 2009 was Turkey's year, but the signs suggest that 2010 could be even better. Conti has seen a steady increase in mortgage quotes for Turkish properties over the last year, and in May alone, the number of quotes issued was double that of the previous monthly average in 2010. As such, it's turned into a bit of an investor hotspot. The warm climate and beautiful coastlines help of course, but Turkey also offers some great property prices within a shelter from the euro, which means that your money goes much further than in some other popular destinations.

Tourism in Turkey has also risen dramatically over the last few years, and it was reportedly the only one of the world's top ten tourist destinations to record an increase in visitors last year. While 2009 saw the economic downturn force global tourism to contract by 4.3%, Turkey welcomed more than 27 million foreign visitors, an increase of 2.8 per cent compared with 2008. Because it's outside the eurozone, it has been attracting an increasing number of holidaymakers who are looking for value. This means that demand for quality rental properties in the popular tourist areas should continue to outstrip supply, making rental yields very lucrative.

Clare Nessling, Conti's operations director, says: "These factors, combined with low interest rates and some bargain property prices, have made Turkey increasingly attractive, as well as more affordable, for UK buyers. Property purchase costs and taxes there tend to be lower than other popular hotspots. Accessibility is important too and the country has a wide choice of airports which are well served by flights from the UK. Bodrum, for example, is only half an hour's drive from the international airport."

When it comes to obtaining a mortgage in Turkey, this is a generally straightforward procedure. A deposit of 25-30 per cent of the purchase price is generally required, the maximum loan term is 20 years, the loan is on a repayment basis, and your total mortgage payments and other financial commitments must not exceed 33 per cent of your monthly gross income. You can usually choose between a sterling or euro mortgage (euro mortgages tend to be cheaper at the moment), but in order to protect your own financial interests, we recommend that an overseas mortgage and the income used to service the mortgage repayments are in the same currency. This will allow you to avoid exchange rate issues. When it comes to current mortgage deals, these start at around 4.05 per cent.

While the rest of the world suffers in the throws of a global financial meltdown, property in Egypt, especially in the resorts along its Red Sea coast, is proving to be a safe haven from the economic woes of the rest of the world. Investors are afforded a low-cost entry point into the Egypt property market, and its proximity to Europe, as well as the many international flights now available, make it an extremely appealing emerging investment market.

According to the World Travel and Tourism Council (WTTC), there was a gradual increase in tourist numbers visiting Egypt during 2007, and a report released recently states that the tourism and travel industry in Egypt is predicted to show a growth last year of approximately 5.5 percent. Experience International, one of the top experts in the particulars of investing in emerging markets like Egypt property, has noticed a growing number of investors taking the plunge and investing in the country’s stable political system, vibrant economy and strong currency.

Experience International’s director, Steve Worboys, says, “Egypt is a modern state and as a country we have seen it grow as a tourist destination over many years due to its rich history and unique attractions such as the pyramids; now though people are increasingly seeing its potential as a place of investment for both remuneration purposes and the fact that it is a year round holiday destination.”