Turkey's property boom reflects economy To see the riches that Turkey's economic boom has brought, clamber up to the top of a building site in Macka, one of the most fashionable parts of Istanbul. There, among the girders, dangling wires and plastic flapping in the wind, is a future penthouse with a commanding view and a price tag of $20m. The apartment, and two others like it, have already been bought, as have the site's more modest one bedroom flats, which sell for more than $1m. The developers of the $300m "Macka Residences" complex, which features interior design by Giorgio Armani, have already sold all but 14 of its 98 units, even though it will not be completed until summer. This is the product of Turkey's blistering economic growth, which has seen the country increase gross domestic product by 8.5 per cent in 2011 after racking up 9 per cent a year before. Yet as data on Monday confirmed, the rate of economic growth has at last begun to slow, marking up an annual 5.2 per cent for the fourth quarter of 2011 - far less than the 12 per cent registered in the first three months of last year. The slowdown has been broadly welcomed by Turkey's authorities, who are in search of an economic soft landing, and want to rein in a current account deficit of more than 10 per cent of GDP. But its impact on the construction and real estate sectors may be more of a concern. Experts acknowledge something of an Istanbul housing glut, even as they reject comparisons with the likes of Spain and Ireland where property booms helped precipitate financial crashes. "My main worry is about an asset bubble," says Gazi Ercel, a former governor of Turkey's central bank, who notes that while overall housing demand still outstrips supply, there are growing stocks of unsold units because many new developments are geared to upper and middle income people, leaving little for those on lower salaries. "There is still room for manoeuvre," Mr Ercel adds, emphasising that property prices have risen relatively slowly. But he highlights the possible impact on the property market if interest rates are increased to restrain inflation running above 10 per cent, or to bolster the Turkish lira. "Economic management, central bank monetary policy is the key," he says. Construction across Turkey grew by 7 per cent in the fourth quarter, registering less of a slowdown than other parts of the domestic economy. The sector employs almost 2m people and - as is the case in many emerging economies - is driven largely by residential properties. Even so, one Istanbul suburb alone boasts more than 20 shopping malls. Adverts for newly built gated communities still crowd the pages of the Turkish press and loom out from its billboards. The noise of building echoes through sites in Istanbul suburbs and areas far away from the city centre. "For one or two years, it has seemed as if the developments outside Istanbul city centre are growing faster than demand," says Vedat Asci, the head of Astas Holding, the company behind the Macka Residences project. Mr Asci cornered the Turkish market for textile machinery before moving into real estate when the economy was at a low ebb. He notes that the city centre, where land is rare and the well-heeled want to be based, is very different from elsewhere. A building almost always has to be knocked down before a another goes up and tenants typically demand more space than they had before - often, an extra apartment. Abdullah Baysal, the head of Istanbul's construction association, says that each year Istanbul needs up to 15,000 more units - because of the country's growing population and social shifts that mean more people living alone. But he still marvels at a nearby tower block, where floor space will be €20,000 a square meter, and voices concern about the construction on Istanbul's outskirts. "There is a fashion in this sector," he says. They are not planning but they are building.