Real estate in Turkey in 2024: why you need to invest now

The easiest way to protect capital from inflation is by investing it in the purchase of real estate. This method of investing is especially relevant now, when due to the difficult geopolitical situation in the stock market, frequent tectonic shifts occur, and currency exchange rates can collapse sharply. According to VTsIOM, already 18% of Russian residents have chosen investing in real estate as a way to protect their funds.

But it is important to understand that buying square meters is not yet a success. If this housing is not in demand from the consumer, then such a purchase will not bring profit. It is necessary to look for objects that are in high demand and the price of which will not collapse in the coming years. Then it can be profitably leased and resold. Over the past 5 years, Turkish housing has become one of the most popular investment options, owners receive rental income of over 70%. What is attractive about such an investment? says a specialist from the leading real estate agency Real East.

Why is housing in demand in Turkey?

Turkey actively attracts foreigners due to its political and economic stability, as well as a high level of security. Since the beginning of the military special operation in Ukraine, over 3,000 applications have been accepted from residents of the Russian Federation, Ukraine and Belarus. In early April, about a thousand employees of Yandex, Tinkoff Bank, Avito and DataArt developers moved there. Respondents from the non-profit project RelocateMe, which helps technical specialists and entrepreneurs in Russia and the CIS find work abroad, report that more than 25% of applicants have chosen this country to move to this year.

The law of demand says: “the higher the demand for a product, the higher its equilibrium price.” Using this rule, we get that the cost of Turkish housing with such a huge demand should be quite high. In May of this year, an increase in the cost of square meters was recorded by more than 170% compared to the first quarter of last year. On average, the price for a finished object is 73.2 thousand dollars.

The rent is also increasing. Compared to 2018 prices, it has increased by 233%, and since April – by 25%. The average rent for 1 sq.m. of living space is now about $ 3. The most active price of real estate and rented apartments has risen in Antalya.

Why else is Turkish real estate getting more expensive?

Increased demand for real estate is not the only reason for the high cost of square meters in this country. What else affects it?

1. Developers have to spend more money. Due to the pandemic and the geopolitical situation, a number of industries have been reduced, supply chains have been destroyed or rebuilt. With an increase in transportation funds, the total cost of the facility has increased. The cost of materials for the current year has increased by 101%.
2. Land is becoming scarce and more expensive. The most convenient locations in demand among foreigners have already been built up. Developers are trying to snatch a part of highly profitable areas for themselves and, creating a stir, raise the market price.
3. Big expenses on logistics. The delivery of machinery and building materials is becoming more expensive due to high fuel prices.
4. Expensive license registration. Inflation in Turkey reached its peak at 36%, which caused a sharp rise in the cost of products and services, including legal ones.

The increase in energy prices, which occurred due to a decrease in the assortment on the world market, affected the construction industry and logistics. Now the delivery of materials and the construction of the facility is more expensive.

Let’s consider 4 cities where the maximum increase in the cost of square meters occurred.

The dynamics of real estate prices in Turkey

Payment for renting a house in Turkey

At the moment, the forecast of the dynamics of the Turkish real estate market is as follows, there are no prospects for reducing the cost of renting or purchasing real estate, this is also shown by the analysis of real estate market statistics. The geopolitical importance of Turkey is increasing due to the construction of the Istanbul canal, the flow of emigrants is not decreasing – it attracts ease of obtaining citizenship and residence permits for investors, free education in schools for their children and a developed system of social services. In addition, the state has created special conditions for entrepreneurs. These factors ensure a constant demand even for expensive housing. The income from renting out housing is on average from 50% per annum.

High real estate prices do not scare tenants and buyers: the main stream of foreigners are top managers, entrepreneurs and IT specialists. This category of clients is very solvent, which provides the investor with a constant inflow of capital and enormous demand.

It is important that, despite the upward price trends, Turkish real estate remains relatively inexpensive on the world market. For example, in Germany, the average cost per square meter is $ 6,143, in Italy — $ 3,285, in Greece — about $ 1,900, and in Montenegro — about $ 1,500.

Payment instruments in Turkey are very variable. And, although the turnover of cryptocurrencies is limited, there are quite a lot of exchangers in the country. This attracts progressive investors and traders to the country, which creates an additional influx of demand for real estate.