Those interested in the Turkish property market, especially those who have invested in Turkish properties during the past ten years, have suffered from inflation and the continuous decline in the value of the Turkish currency against other currencies, which sometimes contributed to reducing their profits in real estate investments in Turkey.
The high demand and the continuous increase in demand for properties in Turkey, especially the new ones, were among the positive factors that contributed to the rise in property prices and the preservation of some gains.
In addition to this, the Turkish laws issued that encouraged foreign investment in the Turkish property market, including real estate residency and Turkish citizenship for an amount of 250 thousand dollars.
But real estate in Turkey this year has achieved unprecedented gains for property owners, especially foreigners who owned properties in Turkey during the past three years.
For the first time in many years, property prices in Turkey are increasing at a rate higher than the rise in inflation rates in the Turkish currency.
Also, real estate in Turkey promises more profits for investors in the coming period, as real estate prices have increased throughout the country at record rates exceeding 60% in some areas of Istanbul, Izmir, Ankara, and Antalya.
Reasons for High Property Prices in Turkey
- The openness that the country witnessed after long periods of closure, the availability of vaccines, and the decrease in the number of cases of corona disease were all positive factors contributing to the return of the tourist movement and thus the return of investors to Turkey with a good appetite fo properties.
- Other factors such as the return of remote workers to work in cities and the return of face-to-face learning in universities and schools after nearly a year and a half of interruption and distance learning, this sudden return formed a housing crisis in major cities such as Istanbul and Ankara, which led to a rise in rent at rates ranging from 50 to 80%.
- The increase in foreign demand for buying properties in Turkey, where the statistics for July and August this year indicate a 64% increase compared to the same period last year.
- Among the factors that contributed to the rise in real estate prices is the increase in the prices of building materials such as iron and cement, the decrease in the number of new housing projects, and the high cost of construction per square meter to at least 6000 Turkish Lira (equivalent to 700 dollars).
- Low confidence in currencies, financial market fluctuations, and high inflation rates in global markets made investors turn towards safe investments, of which real estate is one of the most important.
- It is noted that there is a global rise in real estate prices, as property prices in the world rose by 9.2%, according to the statistics of the British Knight Frank company, which included nearly 55 countries around the world. Turkey ranked first in the world in terms of price increases with a rate of 29.2%, followed by New Zealand with a rate of 25.5% and America with a rate of 18.6%.
Have property prices reached their peak in Turkey? Or still can rise!
As a result of all the previous reasons and as a result of the continued demand for real estate, it is expected that Turkish real estate will witness more rises in the coming period, especially after the government tends to reduce the interest rate on bank savings, the last of which was on 10/24/2021 by 2% to become 16% after What was 18%, followed by the decision of the three government banks (Halkbank, Ziraat Bankası, Vakıfbank) to reduce interest rates on real estate loans by 2% as well, which may be followed by long-term government real estate offers to support the purchasing power of citizens.