Here is a snapshot of why Turkey is one of the best-performing real estate markets in the world.
Turkey boasts arguably the best-performing real estate market in the world and 2016 has shown to be no exception. Growing population, mega projects, growing income per capita, urban renewable projects, and ease of buying property are the main driving forces behind the rapid growth of the real estate sector in Turkey. However, experts have long warned of a dangerous bubble emerging.
In 2015, house prices in Turkey rose faster than any other country in the world, rising 26% in Istanbul, 16% in Izmir and 12% in the capital, Ankara. The price of newly built homes increased by 17.4%. The market is by some measures in very good health. With a low reliance on mortgages and with individual real estate debt low, your average Turkish citizen buys responsibly and sustainably. In Istanbul, the beating heart of the Turkish real estate market, rents in the first half of 2016 have declined by about 2% to 5% compared to in 2015, although this has been blamed more on the decline in the lira than on a reflection of a weakening in demand for property, as it is not uncommon for rents to be priced in foreign currency.
The total number of houses sold in the property market reached 1.3 million in 2015. Istanbul had the highest share (18.6%) of house sales with 239,767 sold house in 2015. Istanbul was followed by Ankara with 146,537 (11.4%) and Izmir 77,796 (6%), according to the Turkish Statistical Institute.
The Turkish government amended the reciprocity law in 2012 that opened the door for foreigners to buy property in Turkey. In 2015, 22,991 houses were sold to foreigners In Turkey according to the Turkish Statistical Institute. Istanbul ranks first with 7,493 sales, Antalya with 6,072 sales, Bursa with 1,501 sales and Yalova with 1,425 sales.
Land sales appear not to have been affected by currency fluctuations due to the fact that pricing is generally done in Turkish lira. New infrastructure developments in and around Istanbul, including new highways and public transport, have led to increases in property prices, improving access to areas previously less attractive to commuters. The construction of the third Bosporus Bridge in particular opens up new areas of Istanbul for development. Without a shadow of a doubt, Istanbul is currently seen by international real estate investors as a winning bet.
Real estate sales to foreigners reached $4.3 billion in Turkey in 2014.