Why Have Property Prices in Antalya Risen So Much?
If you’re a property buff or a real estate investor who enjoys following the global market, you’ll know homes around the world have risen considerably in value over the past few years.
Since 2020, few countries have been able to rival the Turkish market for growth and, as you might expect from the second most-popular destination in Turkey, Antalya has kept pace with cities like Istanbul and Ankara.
But what’s behind the steep rise in prices? Can Turkey’s extraordinary performance be sustained - and would that be a good or bad thing?
Let’s look at the statistics
To understand property prices in Antalya, you first need to appreciate the national picture in Turkey – so some up-to-date statistics may be useful. In April this year, for example, the Turkish Statistical Institute reported the nation’s construction cost index had risen 6.12% in March – and a staggering 106.6% on the same month in 2021.
The costs of civil engineering work increased by similar margins – up 5.27% and 117.38% respectively. The materials index also went up 6.10% and the labour index 1.81% compared to March. However, year-on-year, the figures were up 145.83% and 44.61% respectively.
As you might expect, businesses working in these markets needed to recoup the additional costs. As a result, the average price tag on a new home has increased by a nominal 110% by March this year compared to 2021 – a figure higher than any other country in the world.
The effect of inflation
It’s not just the services of companies working in construction which have influenced the property market in Antalya. Like many other nations, Turkey has witnessed significant inflation. Unlike other countries, though, the Turkish government opted to cut interest rates in an effort to stimulate jobs and encourage investment from overseas.
Unconvinced this would result in long-term success, the international money markets have since given the Turkish lira a rough ride. As a result, the currency lost around 40% of its value by the end of 2021, increasing the cost of imports - and therefore many of the costs involved in building homes.
Property in demand
Nevertheless, as a side-effect, investing in property in Turkey has become an attractive proposition. With other investments looking comparatively fragile – and with Covid-19 as a backdrop - wealthier Turks began to look at larger or second homes as a way of weathering the current financial storm.
However, they have also found themselves in competition with buyers from overseas, attracted both by comparatively low asking prices prompted by the favourable exchange rates and offers of Turkish citizenship available to those spending $400,000 or more.
Such high demand – compounded by a lack of supply due to a slow-down in construction – has created a perfect storm, driving prices upwards. In the past year they’ve doubled in some of the most desirable locations, notably Istanbul and along the Aegean and Mediterranean coast.
Areas around Antalya which have seen similar rises include the popular spots along the stretch of coast from Kemer to Alanya.
Will it last?
Despite property investment often being dubbed ‘as safe as houses’, there are no cast-iron guarantees it will reap financial rewards in five or ten years. There is always a risk that an unforeseen natural event or even a political regime change could lead to prices falling as well as rising. Our advice to anyone considering buying property in Antalya is always the same – make a judgement based on your own resources and attitude to risk.
However, the issues which have led to significant increases in property values over the past decade are unlikely to be resolved speedily. An overnight crash therefore seems unlikely.
In Turkey, the Government has promised to limit the excesses of the property market – at least to some extent - by offering to build a significant amount of new social housing, affordable to middle-income families and those on lower salaries. If this happens – and if those in power remain so after the May 2023 elections – then there may be a reduction in demand, which could take some of the heat out of the Turkish property market.
Where is the smart money going?
In the meantime, it’s important to remember there are still up-and-coming areas around Antalya which remain competitive.
Altıntaş, just a little inland from the city’s famous Lara Beach area, is a good example. You might pay a little more for your contemporary luxury apartment now than you might have done last year, but the district feels very much like Konyaalti did ten years ago.
With Antalya’s most popular spots now at saturation point when it comes to new-builds, smart residential complexes are beginning to appear just a short drive from the city’s international airport. Not only that, they’re accompanied by new play areas, sports facilities and public transport links, giving them considerable appeal – but with lower prices than those demanded along the shoreline.
Resale homes in Lara, Belek and Konyaalti – from exclusive private villas to luxurious apartments – will always be in demand, of course, and we wouldn’t expect that to change. However, if you’re looking for a comparatively affordable foothold or your first holiday home in the sun, we’d definitely recommend Altıntaş as an option.
How can we help?
If you’re considering purchasing Antalya real estate, whether it’s as a holiday rental investment, a second home in the sun or your dream forever home on the Mediterranean coast, then we’d love to help you.
Our experienced team will help at every stage of the buying process, from identifying suitable properties to sealing the deal. You can view our full portfolio of current properties here and just get in touch when you’re ready or with any questions you may have.