Although the Turkish lira has fluctuated in recent months and has lost 9 percent since the beginning of 2019 after falling 28 percent in 2018, Kuwaiti investors have decided over the past five months to reverse the downward trend of the lira by increasing their real estate investments in Turkey to about 33 percent, compared to the corresponding period last year, according to the Turkish Institute of Statistics, reports Al-Rai daily.
While investors focused on readyto- go residential or investment projects, this strong investment appetite opened up a wide debate about whether real estate buying by Kuwaitis could continue to grow in the coming months, especially if the currency continued to record further losses.
There are those who believe in the usefulness of the future of these investments, but the condition of directing them towards well-known projects, relying on the assumption that in this regard the decline in the exchange rate of the lira is essentially motivated to record this growth in real estate purchases, and Kuwaiti investors took advantage of the decline in the exchange rate to more investments.
While there is speculation that investment in Turkey in the short term is not encouraging, optimists support their expectations that most of the Kuwaiti individuals’ investments are directed towards residential properties, some of which are investment properties, making the largest segment classified as accounting in long investments, and this reduces the negative repercussions usually resulting from the large fluctuation in the exchange rate of the lira during the last period. “The real estate investment in Turkey is not encouraging in the short term, given the lack of clarity about the country’s political and financial challenges, which negatively affected the economy,” said Talal Mustafa Al Shamali, CEO of Land United.
At the same time, Al-Shamali advises against exiting investment properties at the moment because of the significant drop in the lira since the beginning of this year, as selling will cause significant losses. He pointed out that the best investment option currently is to move towards the European markets, in line with his expectations in this regard to the real estate prices of these countries from a decline during the past period, ranging between 10 and 15 percent, considering that this rate of decline increases the opportunities for investment in the future.