"Over the last decade, Turkey has featured consistently at or near the top of the lists for both investment and development prospects in the Emerging Trends report. The report is a consensus survey of sentiment, and investors are attracted by the long-term economic prospects for Turkey. While much of the rest of Europe is facing a demographic time bomb, Turkey has a youthful population and an expanding workforce. Despite the short-term political uncertainties, the long-term opportunities are very appealing," Forbes says.

He then referred to Tipping Point, his report for PwC outlining how the years 2012 to 2015 represent a tipping point for the global economy. It showed that, for the first time, the share of world GDP of the emerging economies would exceed that of the developing economies. The number of people regarded as middle class in Asia would surpass that in Europe, and more people would live in towns and cities than the countryside.

"A young, urban middle class in developing Asia will be the dominant source of investment opportunity and capital. Rapid growth and urbanisation will drive raw material demand, creating huge challenges for the real estate industry but also adding to the pool of investment capital," Forbes says.

"In this dramatically changing global real estate environment, Turkey is in a unique position, straddling the border between Asia and Europe literally and figuratively. It is a gateway into Europe with Asian demographic and economic growth prospects. This is attracting real estate investors and the opportunities to invest are broadening as Turkish real estate capital markets become more sophisticated. We can expect a broader range of real estate funds to be available and the existing Turkish reit [real estate investment trust] market that is dominated by developers to expand to include more property investment companies."

Istanbul will be a focal point, says Kate Everett-Allen, of Knight Frank's International Residential Research. "There is a huge level of development, both on the commercial and residential sides in Istanbul and also in other Turkish destinations such as Bodrum," she says. "While the latter is becoming one of the five star locations in Europe, with the likes of the Mandarin Oriental, Aman, Kempinski and Four Seasons all developing resorts, Istanbul is set to become one of the world's key cities, capturing investment from western Europe, Russia, CIS [Commonwealth of Independent States], GCC [Gulf Co-operation Council] and Asia."

Last year, Turkey also eased restrictions on purchases by overseas buyers, opening the door to private investors from a wide range of countries, including Southeast Asia. It was a move the government expected would at least double the amount of property investments in Turkey, which were then around US$2.5 billion annually.

Property purchases by foreigners doubled in the first half of 2013, according to the Ministry of Environment and Urban Planning. The number of originating countries of the foreign realty buyers also increased, from 55 to 88.

Russians have bought

Julian Walker, director at Spot Blue, a British-based Istanbul real estate company, says that infrastructure improvements are increasing the investment appeal of the city's property market.

He says many of Istanbul's burgeoning residential districts are on the verge of becoming more accessible places to live, once a landmark new rail link connecting the European and Asian sides of the city opens this month.

"The Marmaray Project, described as one of Turkey's greatest railway engineering projects ever, is a much-needed solution to Istanbul's traffic congestion and expanding suburbs, caused by the city's rapidly growing population."

Walker says that to date, 2013 has been the busiest in years for Istanbul property sales, with the relaxed foreign ownership rules having a significant impact.

"Five to 10 years ago, 95 per cent of our buyers were from Britain. Now we are possibly 50/50 with international buyers from all corners of the globe," he says.

Attracting investors are "head-turning" residential, commercial, tourist and mixed-use projects, such as Trump Towers Istanbul - the first Trump-branded project in Europe, including a 37-storey residential block, 36-storey office block and five-storey shopping mall; and Vadistanbul, the 1.1-million-square-metre site of a new modern town split into three architecturally distinct parts.

Istanbul has also been chosen by Dutch BioCity Development as the first city in its series of purpose-designed eco cities centred on tertiary care teaching hospitals and biomedical hubs. "Once complete, this network of 'Bio Cities' will constitute the world's largest network of science-based communities, dedicated to the development of translational research and knowledge based economies," Walker says.

But while 2013 is panning out pretty much as the property analysts optimistically expected for Turkey, the new unknown factor is the conflict involving its neighbour, Syria.

Walker says it's "too early to tell" how, if at all, this will affect investor sentiment in Turkey's largest city, adding that "as it stands at the moment, there is minimal impact". He notes: "Turkey is a large country, and the border in Syria is a long way from Istanbul."

Buying Guide

An off-plan studio apartment of 32 square metres located in the new developing area of Halkali on the European side of Istanbul. Facilities of the development will include swimming pools, tennis, basketball and volleyball courts and fitness centre areas.

A four-bedroom, one-bathroom new-build apartment of 180 square metres in Erenkoy, a 15-minute drive from the coast, and 30 minutes from the airport. City centre living in Bagdat Street, an elite part of Istanbul, boasting top fashion and restaurant brands.