Buying a house in Istanbul: important nuances and relevant prices

Owning real estate has been the dream and goal of many people over the years. Buying your own home in Turkey, especially in such a large metropolis as Istanbul, has many advantages. You can live there and you can make a big profit once by investing in your off-plan property and reselling it after a few years. You can earn rental income or use a combined option. For example, you live in your home and rent it out to tenants on a time-sharing basis when you don't need an apartment or house. In addition, you should keep in mind the possibility of obtaining citizenship, which you can successfully combine with any of the above-mentioned real estate options in Istanbul.

Turk.Estate has briefly talked about the investment-useful territories and some promising areas of the main Turkish metropolis.

However, you should pay special attention to several nuances. In this article, we will share with you some tricks when buying a residence in this city.

Content:

• The economic structure of Istanbul
• The advantages of buying a house in Istanbul for sale
  • Growth potential
  • Ease of sale
  • Infrastructure investments
• Some disadvantages of the option of buying a house in Istanbul
  • Regular expenses
  • Operational costs
  • Risks
• What should you additionally consider when buying a home in Istanbul?
  • Location
  • Social infrastructure
  • The number of rooms and housing area
  • Additional nuances
• The most profitable areas of Istanbul for buying a home
• Up-to-date housing prices in Istanbul
• Housing prices for sale and their change in urban transformation zones
• Housing rental rates and their changes in urban transformation areas

The economic structure of Istanbul

Istanbul is the most populous and active city in Turkey. It has always been a major trade and economic hub as well as a cultural centre. As the target audience of users of local housing, it is necessary to take into account tourists, relocators, highly-qualified specialists coming to work here, and especially students. There are many universities in Istanbul, well known not only in Turkey but also all over the world. Indeed, foreign students are quite wealthy.

Istanbul's real estate market is growing day by day for the following reasons: the steadily growing interest in both residential and commercial real estate; the ever-increasing tourist flow, which even the pandemic could not affect; migration; etc. Many Turkish citizens living in other cities dream of moving to Istanbul and starting their business there. All of this increases both the demand and prices for housing in the real estate market of the metropolis.

The advantages of buying a house in Istanbul for sale

The main advantages of purchasing real estate in the largest city in Turkey are the following:

Growth potential

Now, when the growth of domestic and inbound tourism as well as internal migration to Istanbul are becoming more and more obvious, it is this metropolis that most buyers choose. Buying a local house can double or triple your investment. Moreover, even the land for residential development here is getting more expensive rapidly.

Ease of sale

The fact that Istanbul is the most populous city in Turkey has led to an ever-growing demand for housing. There are numerous requests for both rent and purchase. Transactions are concluded quickly; moreover, the seller of the residence can choose potential buyers. That means he can have an auction to raise the market value of the apartment. The more attractive the lot is, the more you can earn through the prestige of the building, good location, etc.

Infrastructure investments

Speaking of the location and infrastructure, especially public transport, in Istanbul, it is developing much faster than in other cities. In the fall of 2022, the metro line was opened to Sabiha Gokcen Airport on the Asian side, which immediately inflated the cost of housing in neighbouring areas, and much more. The same thing will happen in 2023 on the European side with the opening of the metro line to the New Airport (which replaced the Atatürk Airport) on January 22.

There will be new metro lines, metro buses, and trams. Wherever new stops appear, which make it easier to get from remote areas to central ones, residential real estate immediately begins to add up in price. Interest in residential and former industrial areas is growing due to the convenience of transportation and internal movement around the city, as well as to airports, railway stations, etc.

Some disadvantages of the option of buying a house in Istanbul

There are also some negative aspects of buying a house or apartment in Istanbul. However, buyers who take into account the additional costs and other nuances mentioned below have nothing to fear before making a deal. Still, they have to keep these factors in mind.

Regular expenses

Owners remember that there are such fixed expenses such as mortgage interest payments and utility bills, but for some homeowners, the monthly aidat, annual taxes, insurance payments as well as regular tariff increases for the above-mentioned items are an unpleasant surprise,. Competent budget planning, income calculation (including periods of downtime of leased real estate), and a small financial cushion for unforeseen expenses will minimize these difficulties.

Operational costs

When buying any real estate, it is the owner who is responsible for the maintenance, improvement, and repair of his house, or the management company can take them under its control for an appropriate fee. For example, in branded complexes of expensive apartments as well as in hotel-type buildings where rooms are sold, you can entrust the management to specialists and forget about everything but the regular fee for the management company. However, the amount is quite significant. If you rent out your apartment or room, the costs will easily pay off, but if the housing is idle, you will have to put these costs into the budget.

For the rest, you should keep in mind the hassle (and money in your wallet) of buying materials, paying for the services of specialists who will change leaky taps, repair boilers, make cosmetic repairs, and so on.

Risks

There is no risk of not selling real estate in Istanbul, but there is a threat from external factors. These are earthquakes and hurricanes.

The first thing to do is to make sure that the building has mandatory earthquake insurance. Perhaps you should purchase additional insurance that will compensate you the full cost of the property, as Istanbul is located in an earthquake-prone region, unlike cities in the continental part of the country.

You should evaluate the property as best as possible: its location, surrounding structures, etc., and also find out the status of the land and buildings nearby.

Also, specify what transport routes the authorities plan to build in your area. If there is an additional bus, tram or metro stop nearby, that's fine, as it will make your residence more expensive. If there is a high-speed railway line or a metro line near your house (which will be polluted with noise and vibration from construction equipment for many months), not all potential tenants will like it.

What should you additionally consider when buying a home in Istanbul?

Location

Location is one of the main factors to pay attention to when buying a house. No matter where you are going to buy a property (if especially in Istanbul), you should also consider the popularity of this place, crowds, and tourist significance.

Let's mention the transport infrastructure again (see the previous section). If you want to rent out or resell housing, you should not choose a location too far from the centre – even if you like a wonderful green area 20—30 km away from the city centre.

Social infrastructure

A student who is going to rent a house will pick an apartment, even a small one, near their university. Families with children always choose kindergartens, schools, colleges and hospitals within walking distance.

And vice versa: families may not like the noisy crowds of students nearby, and college applicants or specialists who come to work under contract may not like the constantly screaming kids in the kindergarten located right under their windows, because they need to rest or get enough sleep. This is one of the most profitable client audiences for renting out real estate. Highly-qualified employees and civil servants rarely spoil apartments: they come there in most cases to sleep. In addition, there is less risk of non-payments because the company they work for pays for them.

You should keep this in mind and pay attention to the client audience if you want to buy a house for rent.

The number of rooms and housing area

Be sure to compare prices and housing area, as well as the number of rooms in at least several lots. Remember that the housing area in Turkey includes balconies and common areas. At the same time, the size of the residence and the number of rooms significantly affect the market value of the property.

We should add that studios are unlikely to be in demand for renting to Turks as a target audience: locals will not choose such tiny apartments. Even students living alone prefer a minimal 1+1 size.

Additional nuances

For some reason, some additional factors appear to be an afterthought and, alas, after buying an apartment, such as:

• a residential insolation (illumination),
• an indoor humidity level,
• a gas supply,
• an autonomous heating.

The most profitable areas of Istanbul for buying a home

It is impossible to list the best areas of the metropolis, because the choice of the most profitable area is individual and is formed based on how you want to use your property.

If you want to rent it out to tourists, first pay attention to the districts of Fatih, Üsküdar, Beyoğlu – the historical heart of the city.

If you want to be closer to a luxurious life, consider Bebek and Nişantaşı, where this aspect is a priority: it is here that the most famous shopping streets and the most prestigious shops are located. The audience, as you can understand, is relevant.

Not to puzzle yourself and not to search for information all over the Internet, you can contact professional consultants who will guide you on the housing price index in Istanbul. They will also tell you whether it is worth buying an apartment in a new building or prefer secondary housing; whether this or that old building is investment-attractive (old and well-built mansions are prestigious). These professionals will help you study in detail the features of housing construction: the age of the house, the building materials, compliance with standards – including earthquake resistance − and so on.

Up-to-date housing prices in Istanbul

Real estate prices in the city are constantly changing. The annual increase in housing prices in Istanbul over the past 12 months has been 203%, while the increase in rents (official only) has been 150% over 12 months. At the end of January 2023, the average selling price per square metre of housing in Istanbul reached 22,049 Turkish lira (TL), the average cost of a housing unit is 2,645,880 TL, and the average rent is 10,887 TL; moreover, it is several times higher in the most demanded areas.

The largest increase in selling prices in the areas affected by the urban transformation project is in Beyoğlu, and the rental rate is in Esenler. According to Endeksa, the cost of housing in Beyoğlu has increased by 323% over the past year: the price per square metre here is 34,756 TL, and the average price for a residence is 3,475,600 TL. In Esenler, rents have risen by 252% over the past year.

Housing prices for sale and their change in urban transformation zones

Housing rental rates and their changes in urban transformation areas

We are grateful for the data provided by the analytical portal Endeksa.