If you’re reading this, you may be thinking of investing in a holiday home somewhere in Europe and you’re undecided on Spain or somewhere a bit more exotic like Turkey.
To help you decide, we have compared areas such as capital growth prospects, ease of travel and the amount of money you are likely to make during the holiday season in producing this comparison between Spain’s Costas and Turkey’s increasingly popular coastal destinations.
The results were closer than you might think.
Turkey’s property prices have risen dramatically in recent years fuelled by investment from the Middle East and a strong economy. According to Reidin-GYODER prices have increased 7.5% in the past 12 months according to the latest figures available, which means there are excellent prospects for capital growth even if the spectacular double-digit price rises seen in recent years has eased.
Main Holiday Season
April to September is usually the best time to book a holiday in Turkey, if good weather is high on the agenda. You can expect a good six months of demand before the weather get cooler and wetter from October.
In resorts such as Bodrum, you can still pay as little as £40,000 for a 2-bed apartment with a sea view and communal swimming pool which is a lot cheaper than all the other destinations listed here. A generously proportioned villa near less well-known beach resorts such are on sale for £75,000.
Gross rental yields in Turkey are the highest of all countries listed here at 4.05%. Rental yields in the cities like Istanbul can be considerably higher. It must be remembered that these are headline figures and investors must allow for void periods with holiday lets unlike city investments where properties are rented all year round.
It takes just over 3 ½ hours to fly to Turkey, from the UK which is about an hour longer than Spain. There are also established budget airline routes with Easy Jet flying to locations such as Dalaman and Izmir but the choice of budget air travel is less than other major holiday destinations in Europe. Turkey time is also 2 hours ahead of UK time during the summer months.
Average Score: 8.2
House prices on the coast of Spain are still considerably below their peak in 2007, although there are considerable regional variations. Some areas of Barcelona for example have already recovered more than 20% of their losses since 2007 and there are signs things could be on the up with large increases in foreign investment from Asia the US and the Middle East. There is still some uncertainty however about how long the recovery will last and recent reports suggest that house prices went up just 1.4% on the coast in the 12 months to May 2014.
Mainland Spain has one of the warmest coastlines in Europe and the Canary Islands can offer sun worshippers warm weather all year round. The most popular times to visit are between June and September but generally mild weather means that the holiday season can last from April to November. This means that holiday homes can be let for the better part of 8 months.
Spain is classed as a mature property market which means prices are still among the highest in Europe despite the price falls since 2007. The price of property in Costa Blanca is generally cheaper than you will find in the Costa Del Sol at around €145,000 for a 3 bed townhouse rising to €310,000 for a luxury 2 bed apartment on a golf course in the Costa Del Sol.
Rental yields in Spain are surprisingly good overall at 3.91%, however there are regional variations and some resorts are swamped with empty apartments waiting for tenants.
Spain is an established destination for the main budget airlines and as a result flight will be comparatively cheap and regular which makes managing a property investment yourself easier. Expect to arrive in Spain in around 2 ½ hours from the UK.
Average Score 7
In the end it is a close call between Spain and Turkey for property investors. For prudent investors looking for a bargain, Turkey is most definitely the place to look. Turkey can offer a better return on investment for a lot less cash than Spain.
Turkey is also able to compete with Spain for an overall holiday experience and the distance from the UK is not such a barrier as it once was with flight times only an hour or so more than they are to Spain and regular routes between the two countries.
While Spain’s property market has taken something of a battering in recent years and seems to be experiencing a revival of sorts, Turkey remains a market that offers strong growth and good rental yields which makes it the better choice overall.