Last Updated on 05/04/2023
Turkey has become one of the most important investment destinations globally, especially in the real estate market. This remarkable investment is due mainly to Turkey’s strategic location being at the crossroads between Europe and Asia as an international bridge.
Real estate market in Turkey is one of the essential sectors of Turkey’s economy. It ensures safe and guaranteed high profits. We should also mention that the return value varies according to the property type and the location.
How is the Real Estate Market in Turkey
Turkey Houses for sale
Turkey’s real estate market has been continuously developing, especially in the last decade. It recorded impressive sales in 2015-2021, which positively impacted its economy. Real estate sales keep increasing every year.
According to the Turkish Statistical institute’s latest data (TUİK), house sales reached 178,814 in November 2021. This number increased by 59% compared to November 2020. Istanbul, Turkey’s biggest city, has the most significant share, with 17.7%. After that comes Ankara in second place with 9.6% and Izmir with 6.2%.
Thanks to the advance of Construction sectors that adopts recent and innovative materials and construction technologies, new buildings are distinguished for their high quality and decent standards.
Thus, many buyers prefer to invest in first-sale houses to avoid renovation costs. New houses sales increased in November 2021 by 52% compared to the same month 2020 with 55706 sales. Other investors still prefer to buy second-hand properties thanks to their affordable prices than newly-built residential projects. In November 2021, second-hand houses sales reached a number of 123,108 with a rise of 62.4% compared to the same month of the previous year. Second-hand houses were the most sold properties with 68.8% of Turkey’s total sales in 2021.
Real Estate in Turkey for Foreigners
The real estate sector constitutes one of Turkey’s essential pillars of foreign investment. Real estate investment occupies 57% of the total Foreign direct investment in Turkey, with a value of 4.4 billion USD in 2020.
Foreign investors’ interest in the Turkish real estate market is due to advantages, such as developed infrastructure and an advanced construction sector. Moreover, some regulations on the law of properties acquisition by foreigners in Turkey increase the foreign demand for real estate properties in Turkey. Besides, regulations relative to the Turkish Citizenship investment program made the Real estate market more appealing to foreign investors; reducing the minimum investment amount from 1 million USD to 250,000 USD contributed to rising home sales to foreigners in the last 5 years. In fact, in January-November 2021, house sales made to foreigners increased by 39.4% compared to the previous year.
Turkish real estate market attracts investors from different countries. However, Iran, Iraq, and Russia are the top 3 nationalities investing in properties in the last 2 years.
According to TUİK data, we can notice that most of the house’s sales concluded to foreigners in November 2021 was made to Iranian investors with 1406 units, followed by Iraqis with 1075 sales and Russian with 836 units.
Is Turkey Real Estate a Good Investment?
Real Estate Investment in Turkey, a strong sector which is resisting the crisis.
Real estate Investment during the pandemic
Corona pandemic has caused a negative impact and a considerable loss in most world countries’ economies in different sectors. However, the Turkish government succeeded in maintaining the economy stable and keeping control thanks to specific schemes.
Plans set by the Turkish government during the Covid period effectively reduced the pandemic’s negative impact on the economic sectors, mainly the real estate. Despite the restrictions decided worldwide in that period, properties sales in Turkey continued to increase and didn’t collapse within all the challenging circumstances because of the pandemic.
Houses sales in Turkey in January 2020 increased by 55.8% compared to January 2019. Although this month corresponds to the apparent beginning of Covid in most countries, real estate sales continued their prosperity. Moreover, in March 2020 where the 1st case of Covid was officially announced in Turkey, house sales increased by 3.4 compared to the same month of the previous year. We can notice that although the rise was not as significant as at the beginning of 2020, the real estate market keeps strong and didn’t record a decline.
The stability of the real estate market in Turkey during the pandemic could be due to the delay of the luxury housing tax for one year. This decision encouraged buyers to keep investing in properties despite the threatening situation.
Real Estate Investment in Turkey, among the lira fluctuation
During the pandemic, real estate sector stability was mainly due to the transactions made in the local market. However, the Turkish lira fluctuation in the past 3 months encouraged foreign buyers to invest in Turkey’s real estate. Housing prices increased remarkably in this period in Turkish prices due to the inflation rate. However, the decrease of Turkish lira value toward hard currencies made the properties cheap in Dollar and Euro.
Future Of Real Estate Market in Turkey
Despite all the challenges that Turkey and the world have been through in the last two years, Turkey succeeded in preserving its strong trade relations with Europe and the middle east, which contributed to keeping its economy solid.
Many indicators show that this market will keep its prosperity in the upcoming years guaranteeing high returns.
Balanced Sector with safe capital
When the local currency value fluctuates facing the hard currencies, property prices automatically increase to compensate for any decline in the property value and keep it stable. This scheme is behind the Turkish government’s willingness to maintain the real estate market’s stability and ensure its balance against the variation of the Turkish lira.
The advanced construction sector and competitive prices
The development of architecture and construction sectors in Turkey with updated decisions and regulations made Turkey one of the Pioneer countries in these fields. Thus, this situation helped boost the demand for real estate properties in Turkey, thanks to the excellent quality. The ministry of housing in Turkey sets specific requirements for developers to adopt modern, ecological, and sustainable projects to correspond to global construction quality standards and compete with the world’s most famous construction masterpieces.
Besides, the Turkish Citizenship investment program and the competitive prices in the market will keep encouraging foreign investors to be actors in the real estate market in Turkey.
If you would like to know further details about the real estate investment in Turkey, or you are willing to invest in this Sector, MEO Consultants offer you a complete advisory.
