Due to the strategic, economic and geographic importance of Turkey, we see that it has become the destination of many investors, especially in the field of real estate because of the large profits, low risk of depreciation, and the favorable conditions that are facilitated by government to make real estate investment more secure and stable.
The Turkish government pays great attention to the real estate sector and makes continuous efforts to attract real estate investors and motivate them to invest in Turkey. This interest derives from the share real estate contributes to the Turkish economy which quantifies for 20% of the total domestic production of the country. According to market analysts, Turkish real estate market expects tremendous sales by 2023 and is expected to sell more than 6 million properties with an estimated worth of $400 billion.
This numbers are not surprising because of the continuous rise of the foreign demand for Turkish property. To illustrate, in 2015, more than 1.2 million properties were acquired by foreign investors and the numbers are getting higher every year.
The Right Way team breaks down the top cities in Turkey that are the most attractive for investments. We supported the study with official data and statistics from governmental sources.
Istanbul
Istanbul properties are always on-demand and competitive, its financial returns make them stand out from other cities in Turkey. Interestingly, Istanbul is a transcontinental city as it is located on the Bosphorus waterway in northwest Turkey between the Black Sea and the Sea of Marmara. This means the commercial center is in Europe while the rest of the city is in Asia. The location is indeed unique and making it central hub between Europe and Asia, thus developing trade and service activities.
Some parts of Istanbul have still preserved the historical architecture and Ottoman soul which brings you back to the old Ottoman days. On the other hand, the city is highly industrialized having all high-end and modern buildings and infrastructure just as in London, Tokyo, etc. The city administration has done a great job combining styles and wrapping it in a one complete package. Every district has its own style and features, so when you walk around ‘Beşiktaş’ what you see there will be absolutely different of what you can see in ‘Fatih’.
Earlier, the Turkish Investment Agency prepared a report stating that "Istanbul has surpassed the rest of the Turkish cities in terms of volume of real estate sales due to the great progress made in the real estate market conditions. Which led to an increase in the investment returns for Istanbul properties where it is ranked second worldwide in terms of return on investment".
According to data collected by Right-Way, there is a significant increase in the return on investment of Istanbul real estate from 7% to 12% since 2017. These reports also indicate that the prices of Istanbul properties have doubled in the last ten years. The rest of the Turkish cities has witnessed much smaller rate of change in prices- 12%. The study concluded that the prices of rental properties in Istanbul during the past three years have increased by 5%.
Other real estate studies suggest that real estate investment in the commercial sector is more favored by foreign investors in Turkey, namely companies and offices because these projects are more profitable than residential real estate investment, and here is the strong competition among investors in the office market in Istanbul.
As a summary, considering the influx of tourists to Istanbul and the great economic development makes Istanbul more attractive and promising more return on the investment compared to investment in other cities.
These are the districts/regions of Istanbul where the real-estate has increased in value the most. Data has been taken from TUIK(Turkstat)
Ankara
The city is characterized by its geographical location (center of Turkey) and by the large human reservoir because it is very important economic and industrial center, still it is not as vast and dynamic as Istanbul, but it is still the second largest city in Turkey.
Statistics indicate that there is a growing migration to Ankara from the rest of the Turkish states and this population density led mainly to the increase in demand for real estate, which resulted in a rise in property prices over the past decade by more than 60% where the rate of return on investment in real estate Ankara 10% of the total local revenue of the state, and with the modern urban development and modern, it comes second in Turkey in the level of demand for real estate.
The value of foreign investments in Ankara amounted to nearly 30 billion dollars, which is subject to increase in accordance with the improvement in the Turkish economic situation, where Ankara is a clear turnout by domestic and foreign investors, which increases the proportion of domestic workers going to Ankara in search of work. The following chart shows the regions of Ankara that have gained the most value over the 2018.
Izmir
The third largest city in Turkey in terms of population density and area. Izmir occupies second place after Istanbul in the trade and business transactions and outperform the capital- Ankara, in terms of commercial activities. Studies forecast that Izmir’s real-estate economy is on the rise and that investments are inflowing unprecedentedly.
According to the Turkish Ministry of Development, Izmir is Turkey's best city for living and housing. Why? Because of the weather, location and employment rates. First, the weather in Izmir is soft and humid with constant breezes which makes it joyful to enjoy outdoor activities. Second, it is located on the coast of Aegean Sea which grants it direct access to any Greek Port and to Mediterranean Sea from which you can access to countries of Northern Africa and Southern Europe. Lastly, because of its large tourism and trade activity, Izmir can pride itself for one of the highest employment rates within Turkey.
As a result of the increase in the number of investments and the growing population, the demand for real estate in the city has increased.
According to statistics conducted by Right Way, the property prices in Izmir have increased by 50% within last 2 years, and since last 5 years the prices have doubled. Such a trend makes Izmir very promising area for investors to gain greater returns.
From a real estate dynamics perspective, it is impossible to compare these 3 cities with any other city in Turkey in terms of both investment and sales. Istanbul, Ankara and Izmir are so ahead in terms of demand that the figures are hard to compare. Nevertheless, the Right-Way analysts have prepared other most popular cities in Turkey with upward trend in real-estate.
Source: (TUIK-Turkstat)
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