AS ANCIENT as Rome, as happening as London and busier than both, Istanbul is the real capital of Turkey. EasyJet has just started flying there, Harvey Nichols is about to open and, for the first time, foreigners are permitted to buy property. Ancient Byzantine buildings gather dust quietly in the shadows of shiny new skyscrapers. It’s a bargain bazaar.

Istanbul is the bridge between Europe and Asia, the past and the present. One side of the Bosphorus is European, the other side is Asian (known locally as Anatolia). More than 14 million people bustle across the many bridges between the two sides — most work in Europe and live in Asia. All this movement means hellish traffic, which is the city’s worst feature. The rush hour never ends. Work has begun extending the limited underground train system but, perhaps because of earthquakes, locals seem to prefer cars, ferries and trams.

The red and white crescent flag flutters alongside the blue and gold European flag over many buildings. Turkey is not yet in the EU, although talks are under way. Since January non-Turks have been allowed to buy property (but with provisos, see box). “Britons are the biggest foreign investors,” says Turgay Tanes, general manager of Isgyo, one of Turkey’s leading real estate investors and developers. “They make up 23 per cent of buyers. Most are buying purpose-built homes in coastal areas such as Marmaris.” There you can buy a fairly basic three-bedroom house for as little as $150,000 (£78,600) and prices tend to be in dollars per square metre.

But not everyone is happy with this increasingly open market. In August explosions in Istanbul and two major tourist centres killed at least three people and injured ten Britons. A group calling itself the Kurdistan Freedom Falcons (TAF) claimed responsibility, saying on its website: “We had warned before, Turkey is not a safe country. Tourists should not come to Turkey.” In May the same group claimed responsibility for a large fire at the city’s Ataturk airport.

“London, New York and Madrid have all been targeted by terrorists,” says Tanes. “This is a fact of life in all major cities, and Istanbul is no different. We are taking serious precautions.”

Turkey has been criticised for its human rights record; outside major urban centres women still face discrimination and life is far from easy for gay people. Not so in Istanbul. There are more veiled women in Hackney and a vibrant gay scene revolves around the frantic Taksim Square area. Istanbul is Istancool.

The latest reassuringly cosmopolitan sign is Kanyon. A mixed-use development of offices, apartments and shops, it’s in the leafy Levent area of town. Traditionally a business district, it’s becoming more residential with several luxury high-rise blocks under construction.

Kanyon is a vision of the future from a 1960s Star Trek episode. Everything is clean and white. It’s built from matt stone and is all out of doors — the main shopping area has no roof. Clever curving architecture creates a canyon of cool air. Harvey Nichols occupies three floors and Hakkasan is opening its first restaurant outside London on the roof of the futuristic cinema.

All 170 apartments were sold off-plan before construction was finished. All have balconies or access to spacious communal gardens hanging in the sky. The one-bedroom bachelor pads are very boutique hotel and now resell for $480,000 — double their original price. The penthouse has views of the Bosphorus, the Golden Horn and the Sea of Marmara. The Blue Mosque looms on the horizon alongside the Hagia Sofia. All of Istanbul is yours. The cost? Now $2 million.

“Prices have risen 100 per cent in two years,” says Emre Erol, broker and owner at Century 21 in the Akatlar area. “Demand is outstripping supply since the market opened up. It’s only going to increase when mortgages become available.”

You still cannot get a mortgage in Turkey. The law is supposed to change soon but at the moment buyers use long-term bank loans. Tanes says: “Because of stock market volatility, people have tended to invest in property, which makes for a fairly stable market.” As with buying in any other country, it should be possible to get a mortgage from a UK lender.

“The area most popular with foreign buyers is Sultanahmet,” says Erol. All of Istanbul is ancient, but this is something else. All the major tourist sites are here — the Hagia Sofia, the Blue Mosque, the Topkapi Palace. Here a property that’s only a few hundred years old is practically new. Many of the bigger houses have been converted into flats. “You can pick up a property needing work from $1,

500 per square metre,” he says. “If already converted, the price rises to $2,500 per square metre. If you have a water view, the price more or less doubles.”

The clamour for Turkey’s coast continues, but clearly now is the time for Istancool.

Fact file

How to buy: Your property must be within the boundaries of a city, town or village with more than 2,000 residents. You cannot buy in a military zone and, oddly, applications to buy must still be approved by Turkey’s Army Office

The buying process takes six weeks and involves a 10 per cent deposit.

Fees: estate agency (3 per cent of purchase price, but this is negotiable), legal (about £100), purchase tax (£300) and land registration (about £450).

Make sure your property meets earthquake regulations and get proper earthquake insurance (no more than £500 a year).

Emre Erol, Century 21. Tel: 0090 212 3249324, www.century21platin.com.

Kanyon, www.kanyon.com.tr

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