The collapse of the Turkish lira and its impact on the real estate world in Turkey
The Turkish lira lost more than half of its value after the recent unprecedented decline, which drew attention to it, and raised the right questions from investors and those wishing to enter the Turkish real estate market. What are the reasons for this collapse? What are its effects on the real estate sector in Turkey?
The last decade has witnessed a gradual decline in the value of the Turkish lira for many reasons, some of which fall under the category of political reasons and political and economic relations with several countries of the European Union, the United States of America, and the countries of the Arab East. In addition to the significant impact of the Corona crisis on all countries of the world, including Turkey, which has done its best to maintain the stability of its economy in the face of the challenge of stopping life facilities in the face of the new virus and the negative impact of this on the tourism sector, which contributes 12% to Turkey’s GDP, but the direct cause of the decline It was linked to the interest rate cut by the Central Bank of Turkey.
Reducing interest rates comes following an economic policy adopted by Turkish President Recep Tayyip Erdogan, which believes that lowering interest rates will lead to a decrease in inflation, and that the decrease in the exchange rate will increase the importance of Turkish exports and this will reflect positively on the Turkish economy, and that this decrease will lead to the recovery of the tourism sector and an increase in numbers Tourists in the country, and this vision confirms that the Turkish economy index still indicates growth with an expected increase in growth in the coming years.
It seems that the Turkish lira’s falling period is the optimal period for real estate ownership in Turkey by foreign investors who will find real estate at the best prices waiting for them.
Here we must clarify that real estate in Turkey is an important source of investment and represents a competitive investment alternative to the financial markets. The low-interest rate is an incentive for real estate investment for Turks who place financial deposits in banks, which makes the wheel of production spin, and then the economy grows in a manner better.
Also, real estate prices seem more attractive to foreign investors with foreign capital, as the dollar price rises, they find the real estate market constantly attractive and profitable, not to mention that real estate remains a major need that cannot be dispensed within all circumstances.
The Turkish real estate market is still an ideal market for profitable investment, and the Turkish economy is still growing steadily, many observers confirm that the Turkish lira has proven its strength. As for the challenges, the drop that research centers expected in its value are more than 200% of its current value, and many put their confidence in the policy of the Turkish government. This confirms that we are in front of the stage of breaking out of the bottleneck, an indispensable step for the development and liberalization of the Turkish economy.
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