The Real Estate Market in Turkey
Regarding the state of the real estate market in Turkey, many say it is a wise property investment. The world's eyes now focus on Turkey, whose housing market in many areas is yet to establish itself. As a strong performer in some sectors, the market revolves around domestic Turkish property sales but heavily features overseas real estate portfolios. As a result, many foreign homebuyers purchase a property in Turkey, and the lure is easy to understand.
Gorgeous weather, strong cultural identity, beautiful landscapes, and mass investment into infrastructure makes Turkey an excellent place to be a property owner. However, as with any real estate market globally, knowledge is key to ensuring a wise investment. With that in mind, let's see how the property market in Turkey is performing, key areas to invest in, and how to ensure your property purchase adds value to your portfolio.
The Real Estate Market in Turkey
1: International Property Sales
To see the current performing status, we can look at results from Turk Stat, the statistical information centre for Turkey. They say that in July 2021, although domestic sales slowed due to high-interest rates, 4,495 houses were sold to foreigners, an increase of 64% year-on-year. The most popular provinces in Turkey were Istanbul, Antalya, Ankara, Mersin, and Bursa. In 2020, out of the 1.5 million house sales across the country, 40,000 were to foreigners.
2: Why Domestic Sales are Down
Despite a good performance for overseas sales in Turkey, domestic sector sales decreased because of the Turkish lira volatility, economy, high-interest rates, and increasing inflation. The government and the Central Bank of the Republic of Turkey also clash over policy. The government wants to lower interest rates to increase mortgage performance. With the uncertainty of the Turkish lira expected to last for a few years, domestic sales in Turkey won't pick up soon.
3: Rising House Prices in Turkey
By 2021, housing prices have risen for two main reasons. Firstly, building Turkish real estate involved higher costs because of the rising prices of construction materials. Second, as increasingly more Turkish buyers realise the COVID-19 virus isn't going away, they are heading out of large congested cities of Turkey. Instead, they prefer smaller coastal towns, where they purchase villas with private swimming pools and gardens. For decades, apartment living was the trend in Turkey but not anymore. This surge in demand is increasing prices.
4: Why Foreigners Invest in Turkey
They say one man's disaster is another man's opportunity. So, referring to monetary policies, people from other countries now get more Turkish lira than before. Additionally, compared to western real estate markets, the Turkish housing market is in its infancy. Redevelopment in Turkey only started about twenty years ago; hence, there is mass potential for capital appreciation in many areas. Thanks to buyers ' domestic and international markets, there is also high liquidity in Istanbul and many Aegean and Mediterranean towns. Add to this the chance to buy new housing thanks to mass development. And overall, we can understand why overseas buyers see Turkish real estate as a good investment.
5: Popular Areas to Buy Real Estate
Istanbul: This city ranks as the top spot for property sales in Turkey, both domestic and foreign. For an eager-eyed investor, districts on the European side present much capital growth potential if looking at a mid to long term investment. Despite not being the capital of Turkey, the city is an economic hub and the most popular real estate sector.
Ankara: Turning towards Turkey's capital city, Ankara ranks 2nd for domestic house sales and 3rd for overseas sales. The overseas sales are mainly by professionals looking to work and live in Ankara or people buying for a long-term investment.
Antalya: Although not in the top three spots for Turkish buyers, Antalya is the 2nd most popular spot for foreigners. This popularity stems from its beach holiday reputation as the best in Turkey. The Konyaalti marina project put Antalya on the map for investment. Additionally, Konyaalti and Lara beach districts are famous across Turkey for residential holiday homes.
Izmir: Although not ranking for foreigners, Izmir comes in third place for its popularity with Turks. This is no surprise since Izmir is Turkey's third-largest city and a business hub. In addition, the outskirt resorts like Cesme, Foca and Alacati are popular places to own a holiday home or retire.
6: Tips to Invest in Real Estate
To grow your portfolio, don't jump straight into buying property since some areas in Turkey present better price growth potential than others. Firstly, look at this as a long-term investment. Remember that if you sell before five years, you will need to pay capital gains tax. Additionally, you will need to pay tax on rental income. The off-plan property presents a better opportunity for value growth than resale houses in Turkey. The most crucial aspect, though, is to research locally. Don't buy in average areas. Instead, choose one where the local council actively invests back into the community through transport, infrastructure, and their tourism markets in the case of the Aegean and Med of Turkey.
7: What About Citizenship by Investment
In 2020, roughly 7,000 people had gained citizenship by investing in real estate in Turkey. So, if that is something you are considering, all you must do is buy a property worth $250,000 or more, and pledge to keep it for at least three years. It is that simple. Find out about citizenship investment in Turkey here.
8: Research the Property Market of Turkey
To find out more about property in Turkey, you can browse our portfolio of apartments and villas for sale in many areas, including Istanbul, Antalya, Bodrum and Fethiye regions. Each listing shows the price, location, and home features and contact details to find out more via email or arrange a viewing. Alternatively, if you have any further questions, call us today and speak with a local sales advisor about the real estate market in Turkey.