Just days after investors are told they now face a total 15 per cent tax for high-end property purchase in London, figures show the capital is to fall behind Istanbul in investor popularity.
According to Loxley McKenzie, MD of colordarcy .com Istanbul is expected to outperform London in terms of potential investor return.
"I make no secret that I am attracted to the eastern promise of Istanbul and while London still offers great returns for investors, I expect Istanbul to outperform it and offer a more exciting opportunity in 2012,” McKenzie said.
Colordarcy.com has recorded a net yield on prime property in London of 5.5 per cent while the current yield in Istanbul is 8.5 per cent.
While figures show rental growth is slowing in London with a drop of 0.1 per cent in the fourth quarter the opposite is true of Istanbul.
A surge in foreign investment in Istanbul is driving prices up and out of the reach of buyers hence increasing rental need.
This is giving investors the opportunity to slide in and provide the accommodation for the market, yielding a positive return.
According to Colodarcy house prices have increased by a whopping 15 per cent in the past 12 months and this is forecast to continue.
Further purchasing rights are being granted to international buyers as Istanbul lifts its reciprocity rule.