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Feb 5, 2023

Recovery in the Turkish real estate market 2022

The end of the year is a good time to summarize the results and make predictions for the next year. Turkish real estate experts expect an additional rise in the prices of land, houses and apartments in Turkey and give reasons for this rise. The start of 2021 was a bit timid due to the consequences of the Corona virus since 2020 and the obstacles of travel and vaccination for those coming from abroad.

The impact of the epidemic on the Turkish real estate sector

Emlak Kulisi, a construction and real estate newspaper in Turkey, reported that the impact of the pandemic on the Turkish sector was very serious. However, the unique mortgage campaign launched in the summer of 2020 revived the Turkish construction and real estate sector. According to the Statistical Institute, in July alone, nearly 230,000 homes and apartments were sold in the country: real estate sales increased by 124 percent compared to July 2019. A significant increase in demand led to a rapid rise in apartment prices, which before costing the mortgage campaign The real estate is about 500,000 TL, it was sold for 750,000 TL.

The gradual increase in mortgage rates was followed by a sharp increase in the prices of basic building materials - iron, steel and cement. All this led to a slowdown in the construction and real estate sector in Turkey and to a further increase in apartment prices in 2021.

 How has the demand for real estate changed in Turkey by 2021?

The coronavirus pandemic has changed the preferences of home buyers in Turkey. Today, the most popular housing options are stand-alone homes with a garden as well as prefab homes. On the other hand, the so-called old real estate - apartments in buildings over 30 years old - are less in demand (due to the seismic threat). Due to the new demand, construction companies in Turkey are now starting to roll up their sleeves: they are building low-rise villa complexes in picturesque suburbs. In general, the best real estate option in Turkey has become villas in the coastal areas.

Double efficacy of the vaccine

If the coronavirus vaccination spreads at higher rates in the last quarter of 2021, the Turkish economy will be able to recover and the construction sector can become more active. Even with a further drop in interest rates, market experts have predicted that at least 120 thousand apartments and houses per month will be sold in Turkey in 2021. For those looking for a long-term investment perspective, experts still recommend housing investment. In 2021, real estate prices in Turkey have increased by up to 50 percent: those who are thinking of buying a house or apartment, this is the time to start looking for a suitable property.

in numbers

- Rising borrowing costs from summer lows continued to weigh on mortgage sales, which fell 42.9% in May from a year earlier to 10,560 units. They made up 17.8% of all sales for the month.

-Istanbul, the country's most populous city and one of its most important tourist centers, accounted for the largest share of home sales with 19.2%, or 11,356 units. While the capital, Ankara, and the Aegean province of Izmir recorded 5,653 and 3,298 total home sales, respectively.

- More than half of the residential properties, or 818 houses, bought by foreigners per month were in Istanbul, followed by the Mediterranean city of Antalya with 341, and Ankara with 106. Iraqi citizens topped the list of buyers of 239 houses. The Iranians followed with 231 and the Russians with 119.

-A total of 18,204 homes were sold for the first time, up 8% over the same month last year. First home sales accounted for 30.8% of all purchases in the month.

-The data showed that residential properties sold in the January-May period fell 3.8% year-on-year to 418,079.

- Foreign buyers bought 15,740 homes in the five-month period, up 24.9% from last year.

Competitive scene

The residential real estate market in Turkey is fragmented and has a very competitive environment in order to attract limited demand among property owners.

 The paucity of land available for development in city centers, particularly in Istanbul, has forced residential developers to shift towards the fringes with large-scale projects. The development of collective housing is also increasing rapidly. The Department of Housing Development (TOKI) leads collective housing development and renovation projects, with a focus on providing social housing for low- and middle-income families.

Turkish real estate developers have set up their international offices to attract potential foreign investors and promote their projects. Investors from Qatar, Russia, Iran, Saudi Arabia, the United Arab Emirates and Azerbaijan have shown keen interest in Turkish projects.

In general, the fact that the Turkish real estate market was not affected by successive obstacles, starting from the crisis of the Turkish lira to the Corona pandemic, has proven to most studies that it is strong and solid. Most of the numbers rise relatively to high levels, although they decrease at a small and intermittent pace. But it remains distinct and achieves large bonuses that compete with previous years' bonuses. Frankly, the Turkish market is still promising a lot.

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