The Turkish real estate market has been a dynamic landscape in recent times, reflecting the broader economic conditions and global uncertainties. Let's delve into the nuanced details of the market, highlighting key statistics from 2023 and shedding light on the trends shaping Turkey's residential real estate sector.
1. Inflation and Hyperinflation: A Market in Flux
Turkey faced a hyperinflation crisis in 2022, reaching a staggering 85.51% in October before experiencing a slight ease to 84.39% in November and further improvement to 64.27% in December. These figures, significantly higher than the annual average of 10.9% from 2000 to 2021, underscore the economic challenges the country navigated.
2. Soaring House Prices: A Striking Surge
The housing market mirrored the economic turbulence, with nationwide house prices escalating by an astounding 189.9% in November 2022 compared to the previous year. This surge, reaching an average of TRY 16,984 (US$904) per square meter, marked one of the most robust episodes of year-on-year increases ever recorded.
3. Regional Dynamics: City-wise Variations
Major cities witnessed varying degrees of growth:
Istanbul: The largest city experienced a 193.9% surge in average house prices, reaching TRY 26,904 (US$1,432) per sq. m.
Ankara: The capital saw a substantial increase of 195.9% year-on-year, with house prices averaging TRY 12,446 (US$663) per sq. m.
Izmir: The third-largest city recorded an impressive growth of 202.9% year-on-year, reaching TRY 20,861 (US$1,110) per sq. m.
Bodrum takes up approx. 20% of Turkey's Total Luxury Real estate Market with the highest rental yields compared to any other city in Turkey. Turkeys #1 Luxury market saw a substantial increase of 250% year-on-year, with house prices averaging TRY 35,278 (US$1200) per sq. m. The return on investment is high (the income from renting an average residential property by the sea is 5-7% per year, prices in Bodrum increase by 8-10% every year).
4. Steady Property Demand: Balancing Act
Despite the economic challenges, overall property demand remained relatively steady. Home sales in the first eleven months of 2022 increased slightly by 1%, totaling 1.28 million units. Foreign home purchases surged by 20.4% to 61,104 units during the same period, representing the highest sales to foreign buyers ever recorded.
5. Foreign Investment Trends: Attractively Priced Market
The Turkish lira's devaluation by about 69% in the past three years, coupled with attractive property prices, has lured foreign buyers, particularly from the Gulf. Russians led the surge in foreign home purchases, representing about 22.5% of total sales in the first eleven months of 2022.
6. Economic Overview: Resilient Growth Amidst Challenges
Turkey's economy grew by approximately 5% in 2022, following expansions of 11.4% in 2021. While the International Monetary Fund (IMF) forecasts a modest 3% expansion in 2023, the country's Treasury and Finance Minister, Nureddin Nebati, emphasizes a balanced growth outlook.
7. Regional Property Demand Shifts: From Cities to Rural Areas
Regional variations in property demand are noteworthy, with smaller rural areas gaining favor over major cities. Notable changes include a 6% year-on-year decline in home sales in Istanbul, contrasting with a 22.6% rise in Antalya.
8. Legislative Facilitation: Easing Foreign Ownership Rules
Turkey has made strategic legislative moves to attract foreign investment. Since 2012, nationals from 183 countries have been allowed to buy properties in Turkey, including those from China, Russia, India, and Gulf Arab states. The easing of foreign ownership rules has contributed to the influx of foreign buyers.
9. Mortgage Loans and Market Size: An Evolving Landscape
Residential mortgage loans in Turkey continue to rise, with outstanding housing loans reaching TRY 356.2 billion (US$18.96 billion) in November 2022. Despite this growth, the mortgage market's size relative to GDP has shrunk to below 3% last year, showcasing the economy's faster growth compared to the mortgage market.
10. Inflation, Interest Rates, and Currency Challenges: The Economic Tapestry
Turkey's economic journey has been characterized by fluctuating inflation rates and the impact of interest rate policies. Despite measures to stimulate the economy, including a central bank rate cut, inflation averaged 15% annually from 2017 to 2021, surging to 72% in 2022.
11. Residential Construction: A Shift in Momentum
Residential construction activity witnessed a slowdown, with the total number of dwelling units in residential buildings granted construction permits falling by 13.9% in the first three quarters of 2022.
12. Rental Yields: Moderation Across Cities
Turkey's rental yields are moderate to good, with Istanbul leading the pack. Gross rental yields on apartments in Istanbul range from 2.53% to 12.72%, reflecting the diverse dynamics within the city.
13. Luxury Housing Tax: Balancing Fiscal Measures
Introduced in January 2021, the luxury housing tax has added a layer to property ownership. Tax rates vary based on the property's value, providing exemptions for those owning only one residence and offering relief to those with multiple properties.
14. Currency and Debt Crisis: A Macroeconomic Challenge
Turkey's currency and debt crisis, influenced by geopolitical tensions and economic policies, has presented challenges. The lira's devaluation and the country's foreign-currency debt pose considerations for investors and policymakers.
In conclusion, Turkey's real estate market in 2023 is a narrative of resilience, challenges, and strategic shifts. The market continues to evolve amidst economic complexities, with both domestic and foreign factors shaping its trajectory. Investors and stakeholders keen on this dynamic landscape are advised to monitor these trends closely for informed decision-making in the ever-changing Turkish real estate environment.
Exciting News for Spring 2024!
Stay tuned for an exclusive announcement from www.buyinbodrum.com. In the spring of 2024, we'll be launching a premium selection of villa rentals and full-service luxury Concierge services that will redefine luxury living in Bodrum. From lavish beachfront estates to secluded hillside retreats, our handpicked villas will offer the ultimate comfort, convenience, and style. Your dream Bodrum vacation is about to get even more extraordinary, so keep an eye out for updates and be among the first to experience our exquisite villa rentals.
Stay Tuned!
Follow our IG lifestyle Instagram pages for more Bodrum Lifestyle News and Turnkey Luxury Real Estate! www.buyinbodrum.com
Lifestyle in Bodrum Turkey IG https://www.instagram.com/laylayacout/
Bodrum Villas Realestate IG https://www.instagram.com/buyinbodrum/
留言