The real estate market in Turkey during the recent years
The last decade has witnessed an unprecedented rise in real estate prices in Turkey; this comes due to the increasing demand for buying properties in Turkey, whether it is for housing, real estate investment, or obtaining Turkish citizenship.
Although the period of the COVID-19 pandemic witnessed a global economic stagnation, Turkey was not directly and significantly affected, as happened with most European countries. This period witnessed a rather quiet rise; however, the real estate market was stable and was going up amazingly, starting in the second half of 2021 until now. According to a study conducted by Bahcesehir University in Istanbul last year 2022, real estate prices in Turkey have increased by 109% over the price per square meter throughout Turkey. Economic experts and real estate analysts expect that real estate in Turkey is on the way to increase due to the activity of the Turkish economy and the huge projects that the Turkish government is carrying out to raise Turkey and move it to the fore among the largest and most developed economies, which means that the best time to invest in Turkey, if not yesterday, is today. So, if you are looking for big financial returns, you should read the following article, in order to understand that waiting for real estate prices to drop will not work!
- Risks of Buying a Property in Turkey.
- Buying a Property in Turkey as a Foreigner – a Full Guide.
- Shall I Buy a Property in Turkey for Citizenship or Buy in Europe?
- Should I Buy a Property Now in Turkey or Wait for the Elections?
- The Cost of Living in Turkey 2023.
Reasons for the increase in real estate prices in Turkey
- The Turkish real estate market depends on local citizens, who make up 93% of real estate sales in Turkey, compared to only 7% for foreigners.
- The economic inflation that hit the world recently, exceeded 70% in Turkey, according to TURKSTAT.
- The new huge strategic projects undertaken by the Turkish government, such as: the New Istanbul Canal, the recently discovered gas fields, the third Istanbul Airport, the Türksat 6A satellite project, the electric cars project, and many others.
- The Turkish government's interest in infrastructure throughout Turkey, including the new following projects: the new Izmir road "Gebze", the 1915 Çanakkale Bridge road, the Balıkesir road, the Eurasia Tunnel and others.
- The facilities provided by the Turkish government to foreign investors on its land.
- The return of the Turkish-Gulf relations, particularly, with the UAE and Saudi Arabia.
- New huge international investments in Turkey from great countries and economies such as Qatar, China and Saudi Arabia.
- The Russian-Ukrainian war, which positively affected the Turkish real estate market, as Russians exported the highest percentage of sales among all nationalities this year.
- The current situation in Iran. Despite the decline in Iranian sales in 2022, Iran ranks second in terms of real estate purchases in Turkey.
Recent talking numbers of real estate prices and sales in Turkey
Sales during the last 4 years:
- In 2019, 1,348,729 houses were sold across Turkey.
- In 2020, 1,499,316 houses were sold across Turkey.
- In 2021, 1,491,856 houses were sold across Turkey.
- From January to December 2022, real estate sales in Turkey reached 1,393,809 houses.
Top cities in terms of real estate sales in Turkey:
According to TURKSTAT’S report from Jan-Nov 2022, Istanbul topped the list of cities with the best real estate sales, with a total of 19,687 houses, followed by Ankara, with a total of 9,367 houses, then Antalya with a total of 7,902 houses, followed by Izmir with a total of 6,366 houses, then Bursa, where 4,304 houses were sold.
The countries that buy the most real estate in Turkey
According to the TURKSTAT’S report of 2022, Russia topped the list of countries that bought real estate in Turkey the most, with sales of Russians reaching 2,575 homes from January to November 2022. Followed by Iran, where the share of Iranians buying real estate in Turkey was about 510 homes, then Iraq, followed by Ukraine, and then Germany.
Will government housing projects affect the real estate market in Turkey?
In September 2022, the Turkish President announced the "largest social housing project", which aims to own vulnerable social groups, about 500,000 housing units, 50,000 workplaces, and 250,000 pieces of land for construction.
The houses will be about 2 rooms and a hall, with a monthly installment starting from 2,280 TL over a period of 240 months, after paying 10% of the value of the house as a down payment. As for the (3+1) apartments, the monthly installment will start from 3,187 TL over a period of 240 months as well.
Ownership in these projects will be by lottery, within qualified conditions that guarantee that those with higher incomes will not benefit from this project. The Turkish government has confirmed that the project targets only the following groups:
- Martyrs' families.
- People with special needs.
- Youth between 18 and 30 years old.
Taking into consideration that applicant or any member of his/her family does not own any residence that are officially registered, his/her monthly income should not exceed 16,000 TL or 18,000 TL in Istanbul, and he/she should be a Turkish citizen who has completed 18 years with exceptions for the families of martyrs, veterans, and war-wounded. Economists have stated that focusing on the construction sector will lead to maintaining economic growth and achieving faster and more positive results, as this sector is considered a vital option for employment, production and long-term growth, in light of global inflation to maintain the progress of the country's economy.
As for the impact of the project on real estate prices in Turkey, in general, economists have made it clear that this project will not affect real estate prices in Turkey, especially luxury real estate, given that this project is about simple and cheap apartments targeting a certain group of Turkish society with disabilities and limited income.
Comparison between Istanbul, Dubai, and London
Dubai is one of the cities that everyone dreams of visiting and living in. It attracts great interest from individuals and institutions due to the permanent development of the country, which includes the tallest tower in the world, in addition to the artificial islands that have gained popularity among the rich and famous of the world. There is no doubt that Dubai's popularity has increased after it hosted the Expo 2020 exhibition in the Dubai South region.
From January to November 2022, the real estate sector in Dubai recorded about 88,000 real estate sales transactions, with a value exceeding 240 billion dirhams. According to a report issued by Property Finder, the number of sales deals in Dubai increased by 46% compared to 2021.
Pros and cons of real estate investment in Dubai:
- It is true that there is a high demand for the real estate market in Dubai by foreigners, but it is a fragile market that is easy to fall. During the COVID-19 pandemic, real estate prices fell very dramatically, because the purchasing power in Dubai basically depends on foreigners, not on local citizens! Unlike Istanbul, the purchasing power of the real estate market in Turkey comes from the Turkish people, as they represent about 93% of the real estate market, compared to 7% for foreigners! This is why it is stable compared to Dubai and was not significantly affected during the pandemic period, as happened with Dubai.
- Due to the large number of foreigners in Dubai, rental returns are very high compared to Turkey, where they can simply reach 6% or 7% often, while in Istanbul, it can reach 5% or 6%.
- Dubai is the best choice for those who want a stable long-term income, due to the stability of the currency and the high demand for rent.
- As for Istanbul, it is considered the perfect choice for those who want to buy a property to sell it after two or three years, because real estate prices are developing and increasing significantly, year after year, by 10-15%, since 2016.
- Real estate prices in Dubai can go up amazingly, but they can also drop dramatically, which will lead to a loss of money, but this doesn't exist in Istanbul at all.
- In Dubai, the owner of the property is the one who pays the management fees when renting it; but in Istanbul and Turkey, in general, the tenant is the one who pays it.
- Investing in Dubai only qualifies you to obtain a long-term residence permit, while if the minimum investment in Istanbul or Turkey, in general, is $400,000, you will obtain Turkish citizenship with all the rights and privileges that local citizens have.
- According to Property Finder, the price per square meter in the city center of Dubai, such as Burj Khalifa and its surroundings, starts at $6,270. As for the outskirts in Dubai, such as Dubai Silicon Oasis, the price per square meter starts at $1,787.
However, it seems that the coming period will limit the competition between Dubai and Istanbul, when Istanbul wins the title of the first destination for investors because of the upcoming huge economic and strategic projects, the first of which is the new Istanbul Canal, which will steal the light and the transit of international commercial shipments from Dubai to Turkey.
Living in the UK is a desirable destination for many. It is one of the best and most desirable standards of living in the world; due to its stable currency and high level of education, the availability of many professions and office work, in addition to the fact that the main language is English, which is spoken by the majority around the world. However, many believe that buying a property in London or the UK, in general, qualifies them to obtain British citizenship, while this belief is unfortunately incorrect!
Pros and cos of real estate investment in London:
- London is one of the largest and most important British cities that attracts real estate investors, especially from Asia, as the proportion of real estate investments has recently increased by 40%-60%.
- Real estate investment in London takes a long time to benefit from its returns, yet it is stable compared to other investments. However, you have to prepare for periods of economic recession and depreciation depending on the global economic situation.
- The British government imposes huge amounts of tax on real estate investment commensurate with capital.
- After the COVID-19 pandemic, real estate prices increased in the southwest of the country, where demand outweighed supply, because working remotely eliminated the need to live in the big cities, as more people moved to the countryside, coasts, and quieter areas.
- According to the official statistics of the country in 2022, London, has maintained the first place in terms of the high prices of real estate, as the average price per square meter of a house is 7.2 thousand pounds, an apartment is 7.7 thousand pounds, newly built real estate is 9.5 thousand pounds, while price per square meter of old real estate 7.4 thousand pounds. Moreover, London is followed by the Southeast, in terms of price increases, then the East of England, followed by the Southwest, and then the West Midlands.
- The United Kingdom is NOT one of the countries that grants citizenship in return for real estate investment, but it grants long-term residence through the (Tier 1) investor visa, which can be obtained as follows:
- An investment of £2,000,000 for permanent residency after 5 years.
- An investment of £5,000,000 for permanent residency after 3 years.
- An investment of £10,000,000 for permanent residency within two years.
Istanbul is different from the rest of the Turkish cities by its location on two continents, as it is divided into an Asian part and a European part, and each of them has areas that distinguish it from the other, so each part has its own unique characteristics. It is considered one of the most beautiful tourist places in the world due to its climate, nature, and ancient remains that reflect the different civilizations that passed through it. Istanbul is an attractive investment environment for businessmen and investors around the world. In addition to its charming beauty, it is considered the economic capital of Turkey, and it is characterized by a solid and developed infrastructure. In addition, the Turkish government is making great facilities for foreign investors on its land, by reducing taxes, the possibility of obtaining Turkish citizenship, and many others.
Pros and cons of real estate investment in Istanbul:
- The cycle of return on investment (ROI) is short-term; that is, the value of the property after a few years rises, and therefore the invested capital will increase.
- The increasing and continuous demand for the rental market, whether the property is new or old, because Turkey is a country open to all nationalities who desire to travel to and Istanbul, particularly, for work, also Turkish people, themselves, consider Istanbul a main destination for them to work and study.
- The buying curve, if it is not rising, is constant and cannot decline because the purchasing power in Turkey, in general, depends on the Turkish people, not on foreigners, who in turn prefer to buy real estate in Istanbul over other Turkish cities due to its economic importance.
- The low percentage of taxes imposed on real estate in Istanbul, or Turkey in general, compared to European countries and cities.
- One of the disadvantages of real estate investment in Istanbul is that you may be exposed to real estate fraud when buying a property, but this is possible anywhere in the world. Our advice is to deal with a well-known real estate company to facilitate the procedures and not be exposed to any kind of real estate fraud.
- It is also possible that you will encounter some problems with the tenants, such as stopping paying the monthly rent or delaying in paying the monthly allowance for the property, taking into account that the rent payment system in Turkey, unlike many countries, is monthly, not annually or for 6 months, for example. However, this problem is also solved by consulting a real estate expert or a real estate company, which in turn does the required work by searching for the tenant’s work, the method of payment, and everything that guarantees receiving the rental allowance by the owner, on time.
- According to official sources in Turkey, the price per square meter in the city center in Istanbul, such as Maslak, for example, starts at about $2,200. As for the outskirts of Istanbul, the price per square meter starts from $1,500, according to current prices for this year.
- Owning real estate in Turkey, in general, makes it easier to obtain Turkish citizenship within 90 days after purchasing the property, under certain conditions:
- The value of the real estate or the total real estate owned by the foreigner is $400,000 or more.
- The new owner of the property must undertake not to sell the property for at least 3 years from the date of ownership.
The future of the real estate in Turkey
In short, a deep study of the Turkish real estate market reflects only one result, which is that the demand for Turkish real estate is increasing, and we know very well that the higher the demand, the higher the price. Thus, if investors desire a greater return on their investment, they should invest and buy today not tomorrow, especially since the real estate investment value will achieve its highest return in 2023, which is considered the year of economic prosperity for Turkey due to the expected global radical change that will push it to the top. As for those who wait for real estate prices to drop, they only deprive themselves of obtaining a greater return on their investment.
We offer you our services in the field of buying real estate in Turkey in three stages, before buying the property, after purchasing the property, and during the purchasing process. We also provide you with the latest real estate offers, in Turkey, that go with your desires and the specifications that you desire, including suitable real estate, offers to obtain Turkish citizenship through real estate investment, and purchasing real estate in Turkey within a standard period of 90 days.
Credibility, honesty, and speed are our motto. Do not hesitate to visit our company on the ground or online, in order to request various services at any time you want.
We are ready to answer all your inquiries, so do not hesitate to contact us via WhatsApp, please click here.