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Is Turkey headed for a housing bubble?

Will Turkey’s housing sector, which leads the world in price increases, continue to attract foreign investors?

A lone house is seen at a construction site of an urban transformation project in Fikirtepe, an Istanbul neighborhood, in the Asian part of the city, May 7, 2014. The house belongs to a family who has refused to give its approval for the demolishment of the building, bringing the transformation project to a standstill. The owner of the house has demanded a new contract with further guarantees before signing an agreement with the construction firm behind the project, local media reported. REUTERS/Murad Sezer
A lone house is seen at a construction site of an urban transformation project in Fikirtepe, an Istanbul neighborhood, in the Asian part of the city, May 7, 2014. The house belongs to a family who has refused to give its approval for the demolishment of the building, bringing the transformation project to a standstill. — REUTERS/Murad Sezer

Over the years, the only sector in Turkey that hasn’t disappointed investors seeking high returns has been housing. The trend continues, although there are fears that it may be a bubble that could burst soon.

According to Central Bank data, housing prices in Turkey in January 2016 went up 17.5 % compared to January 2015. And the increase in Istanbul prices is about 22%, making Turkey the leader in the global list of housing prices.

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