While rents are increasing and property annualized capital gains drop down to 17% after a beginning of year at 40% in the US, we will look at a market that is truly struggling in nominal terms.

In December this year, the Turkish Lira has been moving from 11 Lira per USDollar to 17 Dollars. The price was 7 Lira per Dollar only a year ago. Turkey is used to high inflation, and banks offer foreign currency accounts.

This resulted in a complete loss of confidence in the currency. Sellers refuse to commit to a price in Lira if it can depreciate 15% in a day.

The government arranged a currency intervention that suddenly brought the price from 17 Lira to 11, while announcing it would guarantee Lira fixed-term 1Yr savings account to individuals resident in Turkey value above USD. The price has since stabilized to around 14 while the country arranged swap lines with UAE.

While private sellers might be nervous to part with their bricks for a known sum of Lira, Turkish property developpers and construction workers who committed to a price are facing rising costs.

Real estate is highly dependent on financial stability in any country. Low rates and availability of credit enabled a great leveraging in most stable countries, further increasing the difference with the unstable ones.

Note: tenant must get notice to vacate 15 days before expiration of the lease.