Lately, we have received more inquiries via Google from people asking if it is a good time to buy a house in Turkey. We answer that it is always a good time if you look at mid to long-term ownership. This is because Turkey was late to remodel and update its real estate market from the crumbling buildings of the 20th century. Hence, new builds take center stage in many areas, and local councils invest heavily in infrastructure and transport links.
So, anyone planning to keep property for at least five to ten years can expect good capital growth. However, recent developments have attracted more eager buyers looking for an investment in Turkey. Let’s look at those developments, how many foreigners bought property in Turkey last year, and what to know if you want to invest in Turkish real estate.
Buying a House in Turkey
The Turkish lira depreciation brought many foreign buyers to Turkey’s shores last year. In November of 2021, 7,363 foreigners bought villas or apartments. Compare this year-on-year when foreigners purchased 4,962 properties, and the significant jump is easy to see. Nationalities varied from Middle Eastern to Europeans to Asians. This generated billions of dollars in foreign currency. In fact, in the eleven months leading up to November, Turkey generated more than 8.5 billion USD through house sales to foreigners. All this happened despite COVID, and it is quite an achievement considering Turkey entered 2021 in lockdown status. However, house prices increased as well.
Will Property Prices Rise in Turkey?
The Turkish lira effect prompted price increases in imported construction goods into Turkey, which impacted housing markets. Additionally, there were significant house price increases on the Aegean and Mediterranean coasts as they received a surge in buyers looking to get out of Turkey’s big cities. So, while many assumed house prices in Turkey to drop, they showed one of the most significant global rises. Therefore, do not expect them to drop anytime soon either. Since COVID shows no sign of going away, we still receive more inquiries for the Mediterranean and Aegean areas.
Turkey also invests heavily in major highways and transport, which bring in global real estate investors. In most places of Turkey, new constructions match buyers’ demand, keeping prices buoyant. While we do not expect more significant house price increases in 2022, property values will still rise with national averages, especially since Turkey’s government introduced measures to help construction companies with costs and imported goods.
Turkish Citizenship by Real Estate Investment
The other aspect bringing real estate investors into Turkey is the Turkish citizenship by investment program. As one of the world’s cheapest and easiest golden visa programs, buyers invest $400,000 in real estate in Turkey and pledge to keep it for at least three years. In addition, each application applies to the house buyer and spouse and dependents, including future-born. As a result, Turkey comes out on top whenever comparing the citizenship real estate program with other countries.
How to Make a Good Property Investment
Despite Turkish lira troubles in 2021, Turkey’s housing market is still going strong, and 2022 looks set to break records for the number of properties sold to foreigners and generated foreign income. However, buyers looking for investment in Turkey should still do their research. Certain areas show more promise and capital growth potential than others. Here is what to look for.
Local Developments: Areas that show more promise than others actively put back into their communities, whether it is shopping, nightlife facilities, transport, or social areas. Mediterranean Alanya is one such area that consistently reinvests every year since they look to grow their tourism market. Additionally, European outskirt districts in Istanbul attract foreign real estate investors, as talk of the Istanbul Canal remains.
Liquidity: Areas in Turkey that prove more promising than others include the big cities and southern and western coasts simply because of high liquidity. Certain coastline areas benefit from not only interest from Turkish buyers but foreigners. Should you want to turn your bricks and mortar investment back into hard cash, assess local markets to see how quickly houses sell and for what price.
Avoid Flipping Houses and Renovation Projects: In America and other western markets, flipping houses and renovation projects fare well in profit. Unfortunately, this doesn’t work in Turkey. For starters, any sellers who need hard cash go straight to local estate agents, and only knowledgeable buyers hear about these deals. Secondly, in 2002, Turkey changed its construction laws to strengthen property foundations. As a result, domestic buyers avoid old properties since new constructions provide more safety and have more appreciation potential. In addition, paperwork and structural changes required for renovation projects older than twenty years drain cash.
Off-plan Constructions: Certain government-backed constructions in Istanbul offer guarantees, in addition to discounted prices. Additionally, staged payment plans, for which some last five years, have 0% interest in exchange for cash deposits. These constructions encourage real estate investment and are popular with buyers looking to rent out properties.
Rental Yields: If you plan to invest in Turkey to rent out your property, check local markets and rental yields. For example, holiday rentals saturate certain Aegean and Mediterranean areas, bringing average daily prices down. Whereas in Istanbul, demand for long-term rentals is always high and provide exceptional rental yields.
Popular Areas to Buy Property
Istanbul: This large metropolis always leads foreign real estate investment. Large lifestyle residences mentioned above are significant factors. Still, because Istanbul is Turkey’s hub despite not being the capital, the city excels in all areas, including business, economy, education, health, and tourism.
Antalya Region: Covering Turkey’s Mediterranean coast, the region breaks down into smaller coastal areas and ranks as the country’s top beach holiday district. Places to buy include golfing Belek, historical Side, the city centre, and luxury Kalkan on the outskirts, offering exceptionally high rental yields.
Fethiye: Still belonging to the Mediterranean coast, the region attracts holidaymakers but also expats looking to live in Turkey all year round. Popular areas include the city centre, Calis Beach, Hisaronu, Ovacik, and Uzumlu. Many people look to buy in Oludeniz because of scenic beauty, but local construction laws keep supply low.
Bodrum Peninsula: On the Aegean coast, Bodrum attracts upmarket buyers specifically interested in places like Yalikavak and the town centre. The Bodrum peninsula has an airport, making it popular with holiday home buyers.
Conclusion
Despite challenges, Turkey’s real estate market remains robust and continues to attract foreign investment. With strategic planning and research, buying property in Turkey can be a rewarding investment.
If you’re considering investing in Turkish real estate, let Aegean Locations assist you in finding the perfect property. Our expertise in the Turkish market ensures a smooth and successful investment experience. Contact Aegean Locations today to start your journey in Turkey.