The Aftermath

It is hard to write about events, particularly when they are still fresh and the outcomes remain unclear, as is certainly the case with the spasms that ripped through Turkey and specifically central Istanbul as a result of the Gezi Park protests.

I have seen a number of protests in my life, many here in Istanbul and a few others elsewhere, including one in Halifax, Nova Scotia after the Toronto Blue Jays won the World Series sometime back in the nineties. That was the first riot I witnessed, involving not more than a few hundred people and lasting perhaps an hour. The intent of the rioters was completely unclear…jubilation, revulsion, inebriation all seeming likely causes.

Riots and protests seem to have become much more a part of the landscape than they were back in those days. We have had protests and riots as part of anti-capitalist movements, anti-war protests, as well as all of the events of the Arab Spring.

So, as unexpected and wide reaching as the Gezi Park event was, taken in a larger global context, it should not be such a shocking event. Brazil is currently undergoing an almost parallel version, though it is playing out differently due to the views and actions of the authorities.

The scale of Gezi was certainly massive and this was perhaps what is most worthy of commenting on. It involved millions of people.

But make no mistake about it, Turkey is a functioning democracy, and though this was a regrettable episode in this long path, one cannot count out or disregard Turkey just on the events and responses to this particular mini-crisis. Many mistakes were made and various people have stepped forward to attempt to soften the at times harsh rhetoric.

The stock markets went predictably manic, the currency plunged and it felt like something really horrible was happening. However, as the dust over the battle field clears, the picture also gets sharper. There was an ideological clash that occurred, but as many will agree, this was something that was already in the air. Now, it is a little more out in the open. This could be a positive if it is used to bridge the ideological divide. Is this likely to occur? I believe, in many ways, that it will and my reasons for believing so are as follows;

- Turkey has managed for centuries with the same or at least similar divides.

-Turkey has a lot of support from surrounding countries, which surely would also like to see a stable and strong Turkey.

-Turkey itself has gone through a period of unprecedented growth and it would seem unlikely that it will merely implode as a result of what were mostly peaceful protests.

-elections are not that far off and I think everybody will see that protests are fine, but if you want to influence events in a democracy, the best way to do it is still at the voting booth.

-the mayor of Istanbul has taken on a conciliatory tone and let’s face it, what goes for Istanbul, mostly goes for the rest of Turkey.

Chill out he's just trying to do the right thing

Chill out, he’s not a bad guy

To some extent Istanbul has been having periodic spasms for the past decades due to the rapid change and re orientation of this city. With leadership and dialogue, there is little doubt that Istanbul can continue on an impressive arc, though the expectations are dimmed in this Spike Lee beginning to a hot summer. I hope the Radio Raheem’s are safe and we can enjoy gentle evening breezes on the shores of the Bosphorous for the rest of the summer of 2013.

 

Democracy in action

It’s hard as a lowly real estate agent to make an objective contribution to the recent events in Istanbul and greater Turkey, much analysis has already been done by people infinitely more qualified on the subject, however, as someone who has lived and worked in the capital for the past 11 years my non partisan view is - 

It seems that the AK ruling party is getting a very strong, Big Ben, type of wake-up call and may consider taking heed to some extent. Authoritarianism and creeping Islamification is obviously very much on the minds of the electorate that didn’t vote AK in the last elections.  Maybe if Erdogan can see a way of toning down the presidential ambitions and rhetoric whilst keeping the non-Urban conservatives happy then perhaps we could see economic confidence push to even greater heights in the future. However, it could get a bit messy for inward investment and the economy if he remains very obstinate and non-conciliatory.

As per the usual with politics we’ll probably see a bit of a middle way and a muddle through. From what I understand this’ll probably affect the inflows of money into Turkey but over time and as long as the correct conciliatory note is struck then it should all return to normal. However, the government needs to tread very carefully. Economists tell us that these inflows of money are pretty important as Turkey’s current account deficit has few other ways to be serviced.

So to real estate – 

In general we don’t think even with a prolonged problem we’ll see a long term drop in Istanbul property prices. One should keep in mind that even in Tehran, a much less economically dynamic and sanctions ridden city, prices reach very high levels.

http://tehrantimes.com/opinion/106544-irans-skyrocketing-real-estate-prices

As in all asset classes, uncertainty puts downward pressure on prices. However, if that uncertainty is removed, prices tend to spring back and pent up demand adds fuel to this. Think US stock market in the past year.

To a certain extent, if you looked at the recently battered Turkish Lira, you could view this as a pricing in of the risk.

I am not a huge fan of quotes, but a wise rich fellow once said, ” be fearful when others are greedy, and greedy when others are fearful.”

Couple this with the fact that some may be looking to cash out on property gains over the past years and you could be seeing some good buying opportunities.

In short, I do not think by any means that this is the time for players to take their eyes off the ball of Istanbul real estate. It may even represent one of the better buying opportunities for dollar/euro laden buyers.