What Are the Reasons for the Change in Real Estate Prices in Istanbul?
The increasing and growing demand for real estate in Turkey in general, particularly in Istanbul, has led to an increase in real estate prices. Real estate prices are rising sharply today due to the Turkish lira's depreciation against the dollar and other factors that some may view negatively, such as global inflation and the Russia-Ukraine war.
But real estate investors understand that the most profitable investment opportunities occur when investment demand plummets due to concerns unrelated to real estate investing.
Depending on the fixed and variable components of Turkish real estate, the prices of premium villas and apartments with sea views vary according to square meter prices. Let us examine the factors that contribute to the change in property prices in Istanbul in detail.
Location of Land
The location of real estate in Istanbul plays an important role in determining square meter prices. Apartments, residences, private houses, or penthouses located in the city center or central neighborhoods are priced higher than those in the suburbs.
The proximity of the property to coastal areas, historic sites, education centers, and transportation systems also contributes to the price differences.
The Total Area of the Property
The project area and the size of the flat or villa largely determine the real estate prices in Istanbul. For this reason, attention should be paid to the net and built area and the interior division of the houses you buy in the city. As a general note, the larger the property, the price per square foot is equivalent to the built-up space in a particular location.
As a metropolitan city, Istanbul has an extensive public transportation network. Transportation is of great importance for Istanbulites, as it provides great profit in life and time. This is why properties close to transport networks are often priced higher. For example, as the proximity of the house you will buy in a district to a transportation network such as metro, Metrobus, tram, etc. increases, the price will also increase.
Age of Construction and Quality
If the property is newly planned and under construction, rates are generally expected to be lower, leaving a substantial margin for a better return on investment. Compared to ready-to-move projects and properties for sale in Istanbul, off-plan properties offer a relatively higher probability of future price improvements and return on capital after resale.
Views from the Property
The views of the houses and apartments in Istanbul are one of the most influential factors shaping the change in property pricing in the same neighborhood. For example, in Istanbul, villas with sea views are 40% more expensive than those in residential areas without unique landscapes.
The Number of the Floors
The floor on which the flat is located also has a great influence on the pricing of flats in Istanbul. For example, an apartment on the ground floor will receive less sunlight and be closer to the road outside. So its pricing is lower than on the upper floors. As the number of floors in the building increases, the prices of the houses increase accordingly.
Market Trends Affecting House Prices in Istanbul
Turkey is an attractive country in terms of transportation opportunities, tourism, entertainment opportunities, and congress tourism. Istanbul, where Europe and Asia meet, emerging as a paradise for real estate investments and a rising star full of real estate opportunities, stands out as a high-value-added and profitable real estate paradise.
High-interest rates and economic restrictions have affected the economy, and one of the effects is the fall in real estate prices and value loss in the lira. The lack of available land for development in city centers, especially in Istanbul, forced housing developers to shift towards the periphery with large-scale projects.
The mass housing development is also increasing rapidly. Leading mass housing development and renovation projects, the Housing Development Administration (TOKİ) focuses on providing social housing to low and middle-income households. Poor infrastructure due to incorrect city planning and rapid urbanization has created a demand for earthquake-resistant homes in Turkey.
Legislative changes that facilitate citizenship with the investment limit for foreigners in Turkey, the campaigns initiated by real estate agents and banks, and the rise in the exchange rate, which brought a record increase of 78.4% in 2021 compared to the previous year, accelerated the sales of residences to foreigners in Turkey.
According to official sources, Istanbul, the most populated city in the country, continued to be the first choice of foreign buyers. Housing sales to foreigners in the city in September 2021 increased 25% year-on-year to 2995 from 2370, compared to the same period of the previous year.
Iraq was followed by Iran with 7622 units, Russia with 4494 units, Afghanistan with 2508 units, and Germany with 2062 units in 2021.
Chinese investments in Turkey have increased dramatically and are expected to increase in the coming years. They often invest in luxury properties, well-designed and five-star managed apartments, services, and excellent facilities.
For further guidance regarding the best locations to buy property in Turkey, read our article titled Where to Buy Property in Turkey now.