Turkey’s making headlines as the lira exchange rate drops to the lowest rate this year against both the pound and the dollar, after a fall of over 34% across the past year. However, there’s also good news for the country. According to the Turkish Statistical Institute, house sales increased by 22.4% between June 2017 and June 2018. And, while a weak lira isn’t great for Turks importing from abroad, it does mean lower costs for international property owners.
What’s happening with Turkish lira?
Over in the US, the Trump administration is ramping up its response to disputes with the Turkish government. The US is reviewing the duty-free access to the US that Turkey currently enjoys for its €1.7 billion of exports. A diplomatic rift over the detainment of an American pastor is also on-going.
This uncertainty has caused the lira to enter a downward spiral. In total, it’s lost over 34% against the pound sterling in the last twelve months. This time last year, it was at 6.25 lira to the pound; now, it’s over 7.10.
There is also a significant number of international property buyers in Turkey. June saw an increase of 7% on the previous month.
What does this mean for property buyers?
As we mentioned above, Turkey’s property market is still booming. Over 10,000 more houses were sold in June than May, and this trend doesn’t seem to be slowing down any time soon. Although driven by easier access to mortgages and lower interest rates for domestic buyers, there is also a significant number of international property buyers in Turkey. Around 3% of buyers in June were foreign citizens – an increase of 7% on the previous month. More significantly, British buyers increased by a massive 27% since last year.
That said, most properties for international buyers are advertised in euro. This does mean that the prices of homes themselves will not necessarily be cheaper, as it will be a GBP-EUR exchange rate. Nonetheless, property prices are low. In popular Bodrum, the average residential property costs 5,100 lira a metre. In Istanbul, it’s just 4,000 lira – and, in Ankara, 1,800.
Moving to Turkey is a hugely exciting step, but you need to make sure you understand how local systems work. Read our guide, Healthcare Abroad 2018, to find out about accessing medical care in the country.
So what savings does the lira exchange rate offer?
However, that’s not the whole story. After purchase, you’ll be dealing lira – and that’s where the exchange rate will be so advantageous for you. Your utilities will invariably be in Turkish lira. Monthly utilities (electricity, gas, water, rubbish collection) for example, cost on average 310 lira.
Over just the last month, the cost of this would have dropped from around £50 to £40 pounds. That’s the same as the average monthly electricity cost alone in the UK.
Maintenance will be even cheaper; a plumber working on a job of ‘average difficulty’ costs around 60 lira – currently £8. This means that, for property buyers abroad, there’s a huge financial incentive to look toward Turkey.
Now’s the time to buy
For international buyers in Turkey, the historic low of the lira is too good an opportunity to pass up. It’s no wonder that the number of British buyers has jumped so massively since last year. Finances are a big decider for many people moving abroad and now really is the time to buy. Otherwise, you could miss out on the savings offered by the falling exchange rate.
For international buyers in Turkey, the historic low of the lira is too good an opportunity to pass up.
How can I make the lira exchange rate work for me?
Buying and living in Turkey can involve transferring money into both euros and Turkish lira. Both of these are volatile and have historically shown sharp changes. If you’re transferring money to Turkey, you want to make sure that you don’t lose out by a sudden rise. However, there are ways that specialist traders can help you control the risk.
Our partner Smart Currency Exchange has over a decade of experience in helping property buyers to safeguard their budget. By using a ‘forward contract’, they can lock you in an exchange rate for up to 12 months. This way, you know exactly what you’re paying.
Speak to Smart Currency Exchange to discover how to reduce the risk of transferring pounds to lira or euro.
The Turkey Buying Guide takes you through each stage of the property buying process, with practical recommendations from our experts who have been through the process themselves. The guide will help you to: