Turkey Real Estate Market: Opportunities and Challenges

2024-03-06

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Turkey Real Estate Market: Opportunities and Challenges
Turkey's real estate market is one of the most dynamic and lucrative in the world, offering a range of investment opportunities to both local and international buyers. With a growing population and a thriving economy, Turkey has seen a significant increase in demand for residential and commercial properties in recent years.

One of the key factors driving growth in Turkey's real estate market is the country's strategic location, as it serves as a gateway between Europe, Asia, and the Middle East. This makes it an ideal location for international business and trade, as well as a popular destination for tourists.

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Growth and size

The Turkish real estate market offers a range of investment opportunities, from affordable apartments to luxury villas, commercial properties, and industrial facilities. Istanbul, the largest city in Turkey, is a particularly attractive investment destination, offering a wealth of investment opportunities across a range of sectors.

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Turkey's real estate market has grown significantly over the past decade, becoming one of the largest and most dynamic markets in the world. The market has experienced steady growth due to several factors, including a growing population, increasing urbanization, and a strong economy. According to official data, the real estate sector in Turkey accounted for approximately 8% of the country's GDP in 2020.

Demand for properties as a whole is essentially stable. According to the Turkish Statistical Institute, the total number of home sales increased marginally by 1% to 1.28 million units in the first eleven months of 2022 compared to the same period in the previous year, following a 0.5% fall throughout 2021. (TurkStat).

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Following annual expansions of 11.4% in 2021, 1.9% in 2020, 0.8% in 2019, and 3% in 2018, significant investment, output, and exports helped Turkey's economy grow by around 5% in 2022. Although the International Monetary Fund (IMF) predicts a moderate 3% expansion this year, which is slightly more optimistic than the World Bank's prediction of a 2.7% growth, overall economic development is expected to decelerate this year.

There are also significant regional variances, with smaller rural locations seeing more demand in Turkey's main cities. Throughout the initial eleven months of 2022:

  • Home sales in Istanbul, which account for more than 17% of all transactions, decreased by 6% year over year to 222,910 units.
  • Home sales in Ankara, which had a market share of roughly 9%, fell by 10.5% year over year to 109,801 units.
  • Home sales in Izmir, which made up about 6% of the market, decreased marginally by 1% year over year to 72,626 units.
انجليزي: تركيا جنة الاستثمار انجليزي: تركيا جنة الاستثمار

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The Turkish real estate market has experienced significant growth and development over the past decade, and experts anticipate that this trend will continue in the coming years. Here are some of the current trends and predictions for the future of the Turkish real estate market:

  1. Foreign investment: Turkey has become an attractive location for foreign investors due to its favorable economic and political climate, low property prices, and high rental yields. The Turkish government has also implemented policies to make it easier for foreigners to invest in the real estate market, which is expected to drive further growth in the sector.
  2. Infrastructure development: Turkey has invested heavily in infrastructure development in recent years, with new airports, highways, and public transportation systems being built. This has improved accessibility to various parts of the country, leading to an increase in demand for real estate in these areas.
  3. Luxury real estate: The demand for luxury real estate in Turkey has been increasing in recent years, especially in cities like Istanbul. This trend is expected to continue as wealthy individuals seek to invest in high-end properties.

What factors are driving demand in Turkey’s real estate market?

There are several factors driving demand in Turkey's real estate market:

Economic growth

Turkey's economy has been growing steadily, which has led to increased demand for real estate, both from domestic buyers and international investors. Turkey's economic growth has been a significant driving force behind the demand in its real estate market. Turkey has experienced strong economic growth over the past decade, with GDP growth rates averaging around 5% per year. This growth has led to increased levels of disposable income and greater access to credit, which in turn has driven demand for real estate.

Economic growth

Population growth (Demographics)

Turkey has a large and growing population, with a significant number of young people entering the workforce and starting families. This has created a strong demand for housing, particularly in urban areas.

One of the key drivers of Turkey's economic growth has been its large and growing population, which has created a strong demand for housing. This demand has been particularly pronounced in major urban centers such as Istanbul, Ankara, and Izmir, which have experienced rapid population growth in recent years.

Related: The Best Area to Buy a Townhouse in Turkiye.

Government policies

The Turkish government has introduced many policies to encourage investment in the real estate sector, including the Citizenship by Investment program, which allows foreign investors to obtain Turkish citizenship in return for a real estate investment of at least $400,000.

 Low-interest rates

Low-interest rates make it more affordable for individuals to take out mortgages and purchase properties, which in turn drives demand in the real estate market. With lower borrowing costs, more people can afford to buy a home or investment property, which increases the overall demand for real estate.

In addition, low-interest rates also make real estate investments more attractive to investors, particularly those who are looking for a stable and reliable return on their investment. As a result, the low-interest-rate environment has helped to boost demand in the Turkish real estate market, particularly in major urban centers such as Istanbul, Ankara, and Izmir.

Overall, these factors are expected to continue driving demand in Turkey's real estate market in the coming years, particularly in major urban centers and popular tourist destinations.

Tips and recommendations for potential investors in Turkey's real estate market

If you are considering investing in Turkey's real estate market, here are some tips that may help you make a smart and profitable investment:

1. Research the market well

Before making any investment decision, it is important to research the local real estate market, including property prices, demand, and trends. Look at various properties and neighborhoods to get a sense of the market and the potential returns.

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2. Choose the location wisely

Location is a key factor in real estate investment. Look for properties in areas with high demand and potential for growth, such as Istanbul, Ankara, and Izmir. Even within the city, check the property’s surroundings, the area, the buildings, and whether it has facilities or not.

3. Determine your investment goals

One of the key tips for potential investors in Turkey's real estate market is to determine their investment goals. Before investing, it's important to have a clear idea of what you hope to achieve from your investment. Are you looking for a long-term investment for rental income, or are you looking to buy a property to sell it for a profit in the short term? Having a clear understanding of your investment goals will help you make more informed decisions and choose the right type of property to invest in.

4. Choose a reliable agent

A reliable, reputable, and experienced real estate agent can provide valuable insights and help you navigate the local market. Look for agents with good reviews and a track record of successful transactions. Imtilak Real Estate Company is a pioneer in the Turkish real estate market and has helped hundreds of clients to buy their dream homes that meet both their budgets and needs. Imtilak company will also help you understand the legal requirements for buying and owning property in Turkey, including obtaining a residence permit, paying taxes, issuing the title deed, and applying for Turkish citizenship.

5. Understand the risks

Like any investment, real estate investment also carries risks, and it is important to assess these risks before making a decision. Some of the risks that investors should be aware of in the Turkish real estate market include fluctuations in exchange rates, changes in government policies, and changes in interest rates. Additionally, investors should also be aware of potential issues such as title disputes, zoning restrictions, and the risk of a slowdown in the market. Therefore, understanding the risks is an essential tip for potential investors in Turkey's real estate market.

الجنسية التركية انجليزي الجنسية التركية انجليزي

Maximize your investment in the Turkey real estate market with Imtilak

At Imtilak we are glad to assist you to invest in the thriving Turkish real estate market. Whether you're looking for a home, rental property, or investment opportunity, our team can help you find the right opportunity for you. contact Imtilak now to begin your real estate journey in Turkey.

Experts predict that Turkey's real estate prices will continue to increase in 2023. The areas close to such projects are already drawing attention. For instance, real estate prices in Mersin rose by 194% in the previous year.
By 2023, it is anticipated that Turkey would be producing 1.5 million new homes annually due to the country's high real estate demand.
Edited by Imtilak Real Estate ©

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