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NEWS Izmir, Muğla and Antalya rank first in the world in increase of home prices

12 Apr 2021

House prices are on the rise around the world. Turkey is also reported to be among countries experiencing said increase. Experts share following comments on this topic:

House prices have shown a record rise during the pandemic, especially in developed and developing countries. Prices in 37 countries that are members of the Organization for Economic Cooperation and Development (OECD), including Turkey, have incurred a record increase in the third quarter of 2020. The average increase in house prices in these countries was recorded as 5 percent, the highest level in 20 years.

According to experts, the increase is due to the economic support packages announced as part of the fight against Covid-19 in many countries, as well as the change in purchasing styles as more people start working from home.

Examples in different geographies show similar trends. For example, Deputy Governor of the Danish Central Bank has said the increase was 5 to 10 percent, relative to the market, while in the Chinese city of Shenzen, house prices are observed to go up by 16 percent. In New Zealand, house prices rose 23 per cent in February 2021 compared to a year earlier. Similar increases were recorded in Sydney.

Izmir, Muğla and Antalya rank top of the list regarding house price increases

According to experts, the growth this time is not due to speculation, but due to an increase in demand. The most important factor in regards is the increase in the interest of families in large houses with gardens outside the city with the trend of working from home. According to the news, rising house prices have also lead to homeowners feeling wealthier, resulting in more spending in concerned market, leading to increased supply.

Izmir ranks second in the world

So, what is the situation in Turkey? According to the third quarter results of the 2020 global house prices index, released in January by Knight Frank which is a global real estate consulting company based in London, Izmir, Ankara and Istanbul ranked 2nd, 3rd and 4th among 150 cities in price increase. According to the index, the increase in Izmir was 27.8 percent, the increase in Ankara was 27.2 percent whereas the increase in Istanbul was 25.7 percent. Despite rising prices, there were also a record number of house sales in Turkey in 2020. According to a media report dated January 15, 2021, 1 million 499 thousand 316 people bought homes, exceeding the historical record of 1 million 409 thousand in 2017, was exceeded.

Epidemic has not decreased house sales

So, how should we interpret the growth trend in house prices in Turkey? Can we draw parallels between the factors that are effective in Turkey and the causes of increase in the world? What should we link the rise of house prices to, especially in Izmir? All these questions are answered by real estate experts.

Increases in Turkey can be mainly due to reduced supply and increased construction costs. In addition to Izmir, the increase in provinces along the Aegean-Mediterranean coastline such as Antalya and Muğla can be explained by the new living and working conditions brought about by the pandemic. It seems that the increase in these cities has also pushed up the national average.

Pandemic increases demand in Izmir, Muğla and Antalya

Demand growth in temperate regions, especially Izmir, is also explained as follows:

 “The spread of remote working practice due to the pandemic has increased interest in Izmir, as access to Istanbul has been shortened due to the new highway. Access and climatic conditions, as well as the social fabric of the city can be said to be effective. But Izmir is not alone in the price increase. Muğla and Antalya are also affected by price increases due to their temperate climate characteristics. In the last year, price increases in these two provinces reached 43 percent.”

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