For many years, affluent Turks and wealthy investors from various countries, including world celebrities, have chosen Bodrum resort and its surroundings to buy summer residences. Property in Turkey offered here is costly, as it is on average in the province of Mugla, to which the location belongs. However, the rental rates for the holiday period are higher than anywhere else in the country, including Istanbul.
Content:
Sale
This spring, analysts discussed how Bodrum's 'investment star' has recently risen. Increased interest in the area has been recorded, mainly from European and Middle Eastern investors. The sales volume has also increased by 15%, along with the price rise. This figure applies not only to ready-made residential property but also to land plots.
Well, demand creates supply. According to experts, the number of development projects in Turkey launched in the region in 2023 has increased by 20% compared to the previous year.
This is unsurprising; people buy housing here willingly, though not in bulk. As per recent data, the cost of a decent residence in Bodrum is significantly higher, sometimes even 3 times higher, than in sought-after European cities.
Even 5 or 6 years ago, prices in Bodrum were already high. In 2018, the average selling price per square metre of housing in the area and its surroundings was 5,287 Turkish Liras (TL) (USD 164) and the average price per unit was 555,135 TL (USD 17,200). Even then, the average annual increase in property prices here, compared to 2017, was 20%.
Now, market experts have tried to find the cheapest lot in 2024. It turned out that the most affordable option is in Mumjular, a town with a population of about 4,.500 people. This is an entirely unclaimed area, but even here, tiny 1+1 flats cost at least 2 million TL, equivalent to USD 62,000. It’s impossible to find such prices in Bodrum and Gümüşlük, Güverdzinlik or other more prestigious neighbouring villages. The 'regular' cost of elite housing is considered to be around USD 38 million. Millions, not thousands! Especially in popular locations. The areas with the highest housing prices in Bodrum and the surrounding areas are Göktürkbükü, Gümbet and Yalikavak, with Gölköy also among the leaders.
One of the reasons for this was the pandemic, after which the resort attracted a considerable number of internal immigrants, residents from major cities changing their residence in search of privacy and comfort. The climate along the Aegean coast is milder compared to the Mediterranean and Bodrum is renowned for its landscapes. Consequently, the pace of residential construction here began to increase and by early 2024, had increased significantly.
The price increase is partly restrained by the fact that only a tiny percentage of the local population can afford houses and flats in Bodrum. Banks have raised interest rates on housing loans and simultaneously, limited the maximum amount for approval. Foreign investors can benefit from this. Otherwise, property prices would rise even faster. Ibrahim Akkaya, vice president of the Bodrum Chamber of Commerce and Industry and a member of the professional committee of the construction sector, explained that while the average decline in home loan issuance in Turkey over the past 3 months has been around 48–55 %, in and around Bodrum, '...the figure is probably around 80 %. The loans that our homebuyers are requesting are not like applications for property purchases by middle-class individuals in Istanbul: prices are very high and banks are reluctant to lend money. The maximum amount individuals can borrow from a bank is around 2.5–3 million TL.' Consequently, sales in Bodrum and its surroundings for the 1st quarter of 2024 decreased by about 16%.
Many developers in these areas have also slowed down the pace of production, i.e. actual construction work on projects, due to inflation eating into planned investments. Selling off-plan projects in Turkey during the initial stages of construction is not always feasible, leading to difficulties with financing at times. However, there are already commissioned objects available, offering a good selection for those who prefer not to take risks and opt for residences at the excavation or foundation-laying stages.
Here are the up-to-date prices and accompanying figures for Bodrum:
- From January 2019 to April 2024, prices in Bodrum have increased on average by 111.48% (in USD, not in TL);
- Over the last 2 years, prices have risen by 38,52%;
- The average price of 1 m2 at the end of April was USD 2,189;
- The average area of a residence in this area is 139 square metres, larger than the typical Turkish housing size of 100–110 square metres, reflecting its status as a renowned resort;
- The average cost of one property unit is USD 391,885, nearly meeting the requirement for 'citizenship by investment' at USD 400,000;
- The average return on investment period for housing is 25 years;
- Analysts have set the minimum/maximum cost per square metre at USD 1,392/USD 6,109;
- The average time for selling a property is 102 days, an important consideration for those wishing to resell.
Rent
This year's figures are off the charts, although many thought the 'pandemic' rental rates were unlikely to be exceeded. In the region as a whole (Bodrum and surrounding areas), rental fees for the year have increased by 70%. At the same time, in some places, the cost of renting luxury multi-room villas in premium view locations per day reached 1 million TL (USD 31,000).
Serkan Zeki Oztuncay, a board member of the Bodrum Association of Property Consultants (BEMDER), explained that the resort remains popular. Despite a decreasing percentage of the local population being able to afford to come to Bodrum for the summer and to take a 4-month holiday in general, considering average salaries and economic conditions, rental rates continue to rise. Additionally, the number of residences and villas in Turkey available for rent is decreasing as the summer approaches.
Local market players and authorities are discussing 'taking control' of rental rates in Bodrum. However, their efforts have not been very successful so far due to high demand. The location has long been dubbed the Turkish Riviera, with the 'stylish' Yalikavak village resembling the Cote d'Azur in France, featuring expensive shops, a beautiful waterfront, a yacht marina, clubs, bars and restaurants. And this is a country that many foreign guests currently lack. As a result, even premium residences in Yalikavak are in high demand in the most sought-after corners. This situation naturally pleases owners who are proactive in investing in such properties.
Moreover, it’s not necessary to buy an expensive villa. A variety of properties are in demand:
- Luxury and very comfortable flats in Turkey;
- Tiny houses, especially those located near the sea;
- Even so-called farmhouses with several thousand square metres of land.
There are also numerous rental options available: apart from seasonal rentals spanning 4–5 months, properties can be rented annually, monthly, weekly or even daily, adhering to the revised rules of tourist rental. However, property owners need not navigate the current legislation themselves; they can entrust housing leases to licenced companies.
If you exclude the million lira per day, seasonal rent in Bodrum for summer 2024 averages 25 million TL (USD 775,000) for a villa. Last season, in 2023, the same villa could be rented for as little as 200,000 TL (USD 6,200) per month, depending on the 'stuffing': the number of bedrooms, the presence of furniture, appliances, etc.
The price range is also extensive for residences with sea views in the centre of Bodrum and districts like Göltürkbükü, Gündogan, Yalikavak and Ortakent, which are among the most popular in these areas. Prices start from a minimum of 90,000 TL (USD 28,000) and can go up to 25 million TL (USD 776,000), as previously mentioned.
For example, Gölköy, a tranquil and secluded village with access to its own beach and coastal strip, is mostly filled with mansions or cosy family hotels, along with restaurants and cafés by the sea. It’s highly popular among Turkish and European tourists seeking a quiet yet very comfortable holiday. Due to the attractive characteristics of the location, the average cost of renting a villa here in the current season was 9 million TL (USD 279,000) when paid in advance.
And what could you rent for 25 million TL for the summer months? For example, a 2-storey 350 square metre villa with 5 separate bedrooms (5+1) and a sea view in Jennet Bay.
Generally, prices for a tiny 2+1 flat in coastal areas start from 322,000–480,000 TL (USD 10,000–15,000).
For daily rent, the minimum is around 2,500 TL (USD 78) if you are lucky; last summer, it was 1,000 TL (USD 31) for a flat with 2 bedrooms (2+1).
Property experts also note that in Marmaris, for instance, the average monthly rent for a villa is only 250,000–300,000 TL (USD 7,750–9,304) and in Antalya, it is even less at 150,000–200,000 TL (USD 4,650–6,203).
What about the utilisation of rental housing?
Nowhere else but in Bodrum do homeowners have to worry about not being able to rent out their flat or villa. Despite a colder-than-usual spring, bookings are still coming in this year. As for demand, tourists from abroad have time to rent accommodation in advance: in February and March and in extreme cases, in April. The local contingent, the Turks, gets what is left in May if there were no prior agreements with the owners (typically, multi-year agreements).
Regarding the housing format in Bodrum, there is a higher demand for villas and detached houses in Turkey, unlike other Aegean resorts like Marmaris and Fethiye, where flats are more popular. The Ministry of Tourism continues to monitor prices. The next 'ongoing check' of rental rates, aimed at gathering statistics rather than implementing caps, is scheduled for May 2024. We await the results. However, local government officials almost guarantee that 'from June the occupancy rate will be 100%', especially with the Eid al-Adha holiday in the middle of June.
So, there is still time to buy accommodation in Bodrum and start renting it out immediately. Moreover, residences in Turkey are often offered for sale not just with finishes, kitchen sets and appliances, but frequently with furniture and other household utensils, sometimes even including plates.