Interest rates in Turkey have been cut to a record low level as the Turkish government continues to curtail high inflation and combat the recession. Turkey’s central bank reduced its borrowing rate to 7.25%, giving a total reduction of 9.5 percentage points over the last 11 months. Interest rates have been lowered every month since November last year.
The government’s fiscal measures have seen inflation fall gradually to 5.3% in August 2009 and caused Standard and Poor’s to revise Turkey’s credit rating from negative to stable. In a statement by Standard and Poor’s, they said “The revision of the outlook reflects the easing in external financing risks and the publication of the government’s medium-term fiscal plan, which we believe reduces uncertainty regarding the fiscal trajectory in Turkey”.
The falling interest rates have triggered a surge in demand for Turkey property, according to Kerem Alkin, Economic Consultant to the Association of Turkish Building Material Producers (IMSAD).
With the lower cost of borrowing and the strong Pound and Euro against the Turkish Lira, Turkey property is becoming an increasingly attractive prospect for both a second holiday home and investment option. The various incentives and tax breaks implemented by the government have further fuelled rising demand.
Overseas mortgage specialists, Conti, confirmed that Turkey is the third most popular location for enquiries and has actually increased its share of enquiries over the last year.
Sources: Bloomberg.com, Mortgagesoverseas.com, BuyAssociation.com
