Calis Beach and Fethiye Turkey Discussion Forum
Turkey Related Subjects => Turkey Discussion Forum (Not Calis specifically) => Topic started by: Piscoe on July 07, 2011, 16:31:47 PM
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Does it feel like this?
http://www.selectproperty.com/turkey-property-news/turkey-world%e2%80%99s-fastest-growing-economy/
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If the Turkish economy is so strong, why is the Lira so weak against the pound ? At this time last year, one pound would buy about 2.30 TL, now it is about 2.60 . At the same time, the pound has fallen against the Euro from 1.20 to 1.10. Obviously there are many factors at work, but on the face of it, it seems strange.
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What is strange is that with all the talk of the economy being strong, a very acceptable general election result, the Greek economy falling apart, others heading the same way, bad forecasts for the UK, the lira exchange rate hardly wavers from 2.60 in a constant trend that has gone on for weeks. It appears to be set to 2.58-2.62, totally immune to everything the World throws up. It isn't natural ;)
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One of the biggest problems is Turkey is very much depending on foreign investment and it is this investment to shores up the private sector. The requirement for funds is one of the reasons why Turkish banks are paying around 9%.
As global problems mount there is a strong possibility that banks and other financial institutions will withdraw liquidity from Turkey and this will make it more difficult to raise money and the private sector will start to contract.The Turkish government is not far from being bankrupt and its ability to raise finance is very limited. This week S&P downgraded Turkey and this is really why the currency is so weak.Turkey also has high levels of unemployment that is in part due to the age of the workforce. As a percentage of population the workforce in Turkey is much greater than the west. One of the major contributors to Turkish growth is construction and this sector is now under attack as the global economy continues to struggle.
To compare Turkey to Greece, Portugal and Ireland is not a fair comparison. The Euro is at the levels it is at the moment because of the German and French economies and it is very unlikely that the European Central Bank will let the Euro collapse.If Spain or Italy were to collapse then it would be a different story.If Turkey was to encounter serious problems they would be relianyt on the IMF and there relationship with the IMF is rocky to say the least.
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The fact that the information is supplied by an organisation pitching Turkey as a viable property investment opportunity leads me to feel the information is a bit suspect.
Indeed the turkish economy is very dependant on foreign investment and that being thin on the ground I see no evidence of boom times as it suggests.
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No slow down of the construction industry noticeable, you would not recognise some of the places around the Fethiye area Gerry, new roads, shops, housing, parks, new drainage systems being constructed, new car showrooms, the prom between Fethiye and Calis joining up it's all going on everywhere we gave travelled.
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You are right, and I receive emails showing that the property market is booming, up every year for 7 years and will be 40% up by year end 2011 compared with 2010. To answer the original question on this subject, no, it doesn't feel like this. It is not remotely like that and if anyone tells you that, put your wallet away and run like hell.
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quote:
Originally posted by Diverbaz 1
No slow down of the construction industry noticeable, you would not recognise some of the places around the Fethiye area Gerry, new roads, shops, housing, parks, new drainage systems being constructed, new car showrooms, the prom between Fethiye and Calis joining up it's all going on everywhere we gave travelled.
Yes, the Republic of Ireland was a bit like that too not so many years back...
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The underlying economic, political and social wellbeing of a country are only some of the factors involved shaping a currency's exchange rate. Another is inflation rate. Although Turkish inflation is far, far lower that anyone who visited in 1990s will remember, it is still much higher than in the big economies of Europe. People with money in TL will be dissuaded from leaving it there if it will be worth 6.25% less in twelve months (the June rate of inflation for Turkey, this is still a lot worse than the Eurozone). Dissuaded unless, that is, the annual risk-free interest rate is a good margin more that this (Central Bank rate currently 6.25%, but ordinary punters can get 9-10% for 30 day accounts in their local bank). Even so I have found it so surprising of several years that the Turkish exchage rate has stayed as high as it has. Surely it is ludicrously overvalues? The key is, as OPO has identified, the large quantity of international "hot money" that remains (and continues to come) to the Istanbul financial markets. I guess this will continue to bolster up the TL providing the economic, political and social stay stable and benign to the operation of financial capital.
[Careful readers will have noticed that the analysis I offer here doesn't work too well for the UK - low/zero growth, high inflation, low interest rates. What the hell is happening here? And does anybody think they can translate it into simple terms intelligible to that economic ignoramous George Osbourne? I won't enter that territory in this post].
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Here is Fethiye Times, explaining just how buoyant the property market is right now - wish I owned 100 apartments, I'd make a killing in this boom...
http://www.fethiyetimes.com/news/44-news/6600-fethiye-property-market-overview-2011.html
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Scunner you are right when you refer to the Republic of Ireland. I was there last week and it was surreal when looking at these ghost estates. They were like a set for asci fi movie where the world ended in one day. Some houses completed and unoccupied and others in various stages of building. All left and just starting to crumble.In the republic they have built a superb road and transport infrastructure. Modern shopping centres have been built but most of the units have either been closed or never let.
I would say throughout the Fethiye area there are too many properties available for sale.
With regards that article in the Fethiye Times I think whoever wrote lives on another planet.
How many people who have bought and sold property in Turkey in the last 5 years have made a 100% plus return?
The vast majority have been lucky to break even.
There has always been this attitude in Turkey to hype up even when things were bad. When I was living in Ovacik we always heard that the volume of tourists is up so many percent but when you went to Hisaronu and Olu deniz all you heard from the local traders is where are the Brits and why do they not come to Turkey anymore.So any stats I would take with a pinch of salt.