Turkey Real Estate Market in 2021

Turkey Real Estate Market in 2021

In May 2020, the average housing prices per square meter in Turkey real estate market rose by 40% and reached ₺3,919

In the same period, prices increased by 34.2% in Istanbul, by 38.3% in Ankara, and by 38.6% in İzmir. In this way, prices per square meter climbed to ₺5,200 in Istanbul, ₺2,692 in Ankara, and ₺4,690 in İzmir.

The deceleration kicked off by the pandemic continues in the rental housing market, as well.

The increase rate in rental housing prices is 23.2% by May 2021 while the prices reached ₺18.4 per square meter.

The annual increase rate in the rental prices was reported as 37.7% in Istanbul, 20.3% in Ankara, and 21.8% in İzmir. The increase rate in Istanbul is particularly striking. As a result, the average rental price per square meter reached ₺27.1 in Istanbul, ₺13.1 in Ankara, and ₺19.1 in İzmir.

Another data for 2021 reveals that the highest increase in the housing prices was seen in Hatay, Aydın, Muğla, Balıkesir, Çanakkale, Antalya, İstanbul, İzmir, Manisa, and Zonguldak, with an increased rate between 5%-10%.

The real estate market in Istanbul is on the rise since mid-2021. Başakşehir, Gaziosmanpaşa, Bakırköy, Bayrampaşa, and Maltepe districts saw the most remarkable increase in the sale prices, with a rate of 10%-24% in the last month.

An Overview of Housing prices in Turkey

On the other hand, an index prepared by the real estate consultancy company, Knight Frank, indicates that the housing prices worldwide experienced the highest increase on an annual basis in the last 15 years by the end of May, with Turkey taking the lead.

In this period, the real estate prices rose by 32% in Turkey, followed by New Zealand with an increase of 22.1% and Luxembourg with 16.6%.

The highest annual increase was seen in İzmir by 33.9%, followed by Ankara with an increase of 30.3% and Istanbul with 28.9%.

According to data, the average price per square meter reached ₺4,150.5 countrywide. Istanbul prices rose to ₺6,447.2 in Istanbul, ₺5,026.2 in İzmir, and ₺3,084.5 in Ankara.

To get the most accurate result for Turkey real estate market, we suggest you average out these figures with the prices we shared in the first paragraph.

Stating that the real estate market got flat regarding the land prices, experts say the previous fifteen years saw an overwhelming investment in this kind of property, and people prefer to buy land during the pandemic, too.

According to experts, the main reason is that people want to get away from crowded places. They also foresee 2021 will be a year when buyers gravitate towards land even more, which will result in land prices in proximity to central areas will go up in Turkey real estate market.

Basic Dynamics in Economics

According to the Turkish Contractors Association report, even though there might be a decrease in the interest rates in Fall 202, housing prices will not go down due to high demand.

Experts predict there are approximately 1.5 million properties in the housing stock in Turkey real estate market.

In fact, nearly 800,000 units are needed annually to meet the housing demand in Turkey, and the current housing stock can be depleted if the right policies are followed. However, due to the recent economic atmosphere, the expectations for real estate sales in 2021 are limited.

Within this context, it is important to launch campaigns for low-interest consumer credit in first-hand property sales in order to liven up the Turkey real estate market.

According to Turkish Statistical Institute data, the homeownership rate in Turkey was 58.8% in 2019 and decreased to 57.8% in 2020 despite campaigns and low interest rates. Developing alternative financing models in the real estate industry can be beneficial in the long term.

Factors Affecting Supply and Demand in Housing Sector

On the other hand, house sales made to foreigners increased when compared to last year. Istanbul takes the lead as the sales increased by 185.3% to 4,748 units.

Antalya, Ankara, Mersin, and Bursa shine out regarding the sales made to foreigners, and Iraqis bought the most properties.

The sales are expected to increase as confidence builds up regarding the real estate market. However, there are some structural issues in this regard.

Tourism workers who are irrelevant to the real estate industry sell properties for excessive prices. Construction companies, too, quote different prices to Turkish and foreign buyers.

At this point, working with experienced companies with good references has the utmost importance.

Prices of Housing in Istanbul and in Turkey

123,731 houses were sold in Turkey by June 2021. Even though there is a decrease by 29.1% when compared to last year, this figure is still the highest in the past 9 months.

Istanbul takes the lead with 19.2% of units sold in this city, followed by Ankara with 9.9% and İzmir with %5.6. The lowest number of sales were reported in Hakkari, Ardahan, and Bayburt.

Industry representatives highlighted that prices will increase in line with the growing demand in Turkey real estate market.

Because there was a lockdown in May, the sales graphics were promising in June.

Locations close to the airports with lower prices are preferred in Istanbul.

However, residential projects of renowned companies in Turkey’s real estate market receive demand regardless of their location.

Those who buy properties outside of Istanbul gravitate towards different project areas of these companies. Many buyers chose to buy real estate in Kocaeli, Mersin, Eskişehir, and Konya. But in general, people still prefer Istanbul to other cities, buying properties in the further districts or cities near Istanbul.

In short, the normalization will dramatically increase housing sales in Turkey real estate market. During the lockdown, buyers experienced problems in touring the real estate or exploring the area. Such problems are no longer an issue. At the same time, the majority of buyers believe that the prices will not go down, which highly affected the increase in sales.

Let’s give out an example: imagine a ₺10,000-property bought from a 2-year project. Renovating it will cost ₺13,000, therefore it will be sold for ₺15,000. Consequently, the increase will continue even further. There is a minimum of 600,000 new houses demanded in Turkey. The supply runs low in the new houses, and the buyers who see the prices in the second-hand properties will not go down gravitate towards second-hand properties in Turkey real estate market.

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