In the last decades, Turkey investment in the real estate sector raised especially after the economic openness to the world. Real estate companies in Turkey work hard to satisfy the demand of the internal market with the big population of Turkey which passes the 75 million and look for the invasion of the international market. Turkish businessmen show their professionality in the real estate market try to be number one as far as Istanbul join the great projects with a big budget like the World biggest airport and the world tallest bridge as a move to overcome Dubai with its great projects.
The last report published from the international company moody show the progress in the property market in Turkey. Moody’s said strong lending practices, favorable demographics and the low weight of mortgages in Turkey’s financial system lessen the risk of a housing-related slump in Turkey like those seen in the U.S. or Spain. Also, mortgage-covered bonds are among the safest credit instruments in the country while mortgage loans are some of Turkish banks’ most creditworthy assets it added.
José de León, a Senior Vice President at Moody’s said
House price growth in Turkey is not sustainable, but when it does stabilize or turn negative the market will likely have a soft landing owing to robust lending practices and macro-prudential measures that aim to insulate mortgage lending from a downturn said José de León, a Senior Vice President at Moody’s.
Tomás Rogriguez-Vigil an Analyst at Moody’s said
The low weight of mortgage lending in the financial system at about 6 percent of banks’ total balance sheets reduces the likelihood that a housing correction would spill into the financial system says Tomás Rogriguez-Vigil an Analyst at Moody’s.
The main risks for investors in Turkish mortgage
Moody’s research says that the main risks for investors in Turkish mortgage covered bonds stem from tail-events related to (1) Turkey’s position as an emerging market; (2) a challenging environment for the country’s banks over the next 12 to 18 months; (3) earthquakes; and (4) refinancing needs.
If you want to attract emerging markets investors as well as international investors in search of higher yields Turkish mortgage programs aim to issue in foreign currencies namely euros and U.S. dollars as a kind of attractions to the Turkish market.