Istanbul ranked fourth out of 27 European cities based on property market performance last year, dropping down the list after coming top in two recent years, according to a report released by Pricewaterhousecoopers (PwC) and the Urban Land Institute (ULI) on Feb. 20.
“As the survey’s rankings of cities’ investment prospects reveal, markets such as Munich and Berlin have overtaken ‘non-core’ locations such as Istanbul, a two-time winner in recent years,” said the Emerging Trends in Real Estate Europe 2013 report. Munich ranked first, followed by Berlin and London. Fifth-placed Hamburg followed Istanbul in a top five dominated by German cities.
“It is no surprise that a German city tops the bill for 2013, knocking two-time winner Istanbul off the top spot,” the report stated, stressing that investors hunted for dependable cities in economies that can “shoulder headwinds.”
Munich and London rate highly for their ability to withstand the ongoing financial crisis, according to the report. “Munich has the lowest unemployment rate in Germany and its job market is growing as biotechnology, environmental sciences, media, and genetic engineering expand,” it said.
Istanbul tops in ‘opportunities’
Istanbul ranked top in “development prospects,” obtaining 3.46 points out of 5 in 2012, as it did in a year earlier.
“It’s Berlin and London for the core, but it’s Istanbul for opportunities. It is Istanbul’s exciting economic and demographic potential that keeps it popular with interviewees,” the report said. Turkey’s Association of Real Estate Investment Companies (GYODER) estimates the change will boost investment in real estate by $5 billion a year. However, the report warned that a fragmented market and lack of institutional-quality assets in Istanbul made deals hard to secure.
Meanwhile, Istanbul’s real-estate sales number reached 24,244 in the fourth quarter of last year with a 24.8 percent increase from the third quarter, according to figures revealed by the state-run statistics body T_K yesterday. Istanbul took its place in the top five once again, ranking second in new property acquisitions performance last year. It was the leader in 2011.
“Global companies such as Nestl and Microsoft, as well as newcomers from banking and insurance, are establishing bases, drawn by the proximity to cities in Russia and the Middle East,” T_K said.
Istanbul’s young population, with half of its 75 million people under the age of 29, is also an important factor for its economic growth, it added.