SEASONAL REAL ESTATE IN THE FIRST POST-PANDEMIC SEASON: WHAT TO EXPECT?

SEASONAL REAL ESTATE IN THE FIRST POST-PANDEMIC SEASON: WHAT TO EXPECT?

The coronavirus pandemic has changed the whole world, not to mention certain areas of the economy. We talked about the situation on the housing market in Turkey in general and the circumstances that change the prices of residential real estate throughout the country in a recent article.

Today we will dwell in more detail on the real estate situation on the coast.

ANY HOUSING NEAR THE SEA IS NEEDED

The demand for houses with gardens and villas, as we recall, has grown sharply, and continues to increase. But the nature of demand has changed. Now, isolated housing is in demand not only in the Mediterranean and Aegean resorts familiar to Russians, but almost everywhere where there is access to the sea: from Bodrum to Şile and from Kemer to Gyüre. Now people “master” the coast with the aim of not just going there on vacation, but to live and work (considering remoteness) almost constantly. This adjusts the requirements for housing, and significantly affects pricing.

The rent has especially risen in the resorts over the past year (for example, in Bodrum it has tripled, and renting a luxury villa for the season will cost a million Turkish liras), which is guaranteed to continue to grow further. And in relation to apartments, and especially in relation to villas, as well as other detached residences.

SEASIDE RECORDSMEN FOR THE LAST THREE YEARS

According to the portal Endeksa.com, summing up the detailed results for the year, the highest growth in housing prices in coastal areas in 2020 was recorded in Yalıkavak (near Bodrum): 69%. Yalıkavak is followed by Çarşı (an increase of 68%) and Torba (67%), also near Bodrum. The average selling price per square meter of residences in Yalıkavak was 15 062 Turkish Lira (TL). In Çarşı this figure was 12 612 TL, in Torba - 12 966 TL. 

As for rent, the biggest increase in annual rent was in the districts of Gyüre (Edremit) - by 52%, in Alaçatı (Çeşme, near Izmir) - 51%, and Çiftlik (again in Çeşme) - 49%.

Görkem Ogüt, founding partner and CEO of Endeksa.com, noted that over the past three years, Kemer (89%), Fethiye (87%) and Bitez in Bodrum (81%) have seen the largest increases in housing prices. Investors continue to quickly grab free real estate.

The highest growth in rent for the same three years is in Alaçatı, Çeşme (67%), Güvercinlik, Bodrum (61%) and Altinoluk, Edremit (59%).

BODRUM IS RECOGNIZED FAVORITE OF THE “PANDEMIC” YEAR

Well, over the past year, the province of Muğla began to enjoy not just great, but tremendous popularity, where prices for villas have already become equal to European ones.

Interest in residential real estate here, which grew very rapidly during the “pandemic” year, continues to this day. Experts believe that Bodrum will remain popular as it has turned from a resort destination to a year-round destination.

Shule Alp, real estate consultant, confirmed that Bodrum's resident population has actually tripled during the pandemic. Those who were already familiar with this region and came here on vacation, immediately moved to Bodrum for permanent residence. Moreover, not only Turkish home buyers but also foreign investors are interested in this “year-round resort”.

This trend has been reinforced by the fact that Bodrum has resolved the issue of supplying natural gas for the colder months: “In an area with such a rapid population growth, the demand for electricity for heating has peaked, and in fact there has been an energy crisis. The organization of gas supply has solved this problem. In addition, new real estate projects will also increase thanks to now available access to natural gas. Thus, we expect both prices to rise in this area and an influx of new investors - especially in those quarters that will be the first to be supplied with gas.”

MARKET PLAYERS OPINION

Coastal housing demand has reached its five-years peak

When in Turkey, like almost all over the world, the authorities announced temporary lockdowns and other restrictions, people began to choose housing where you can comfortably not only be a large family, but also work remotely. One of the directors of Hürriyet Emlak, Zeynep Tandoğan, clarified that in June-July 2020, the number of searches for cottages for sale peaked in the last five years.

The most in demand at that time were: Alanya, Kepez and Konyaaltı - in the province of Antalya; Didim - in Aydin province; Ayvalık, Edremit and Burhaniye - in Balikesir; Çeşme, Balçova, Karşıyaka, Bornova, Narlıdere - in Izmir.

In Bodrum (Muğla), the regions of Bitez, Yalıkavak, Eskiçeşme, Yahşi, Akyarlar and Turgutreis rose the most in price last summer.

Well, the summer resorts of Balikesir were snapped up because of their proximity to Istanbul: it was there that the inhabitants of this metropolis rushe

According to Zeynep Tandoğan, the rise in prices for houses for sale in Konyaalti (Antalya) exceeded 90% compared to the last year 2019. The increase in rent was over 60%. A similar situation is in Didim and Kuşadası (districts of Aydin province).

Housing prices for sale in Edremit and Ayvalık (Balikesir) added 60%, and in Ayvacık (Çanakkale) - 100%! “Based on these statistics, we can safely predict that this trend will continue under the influence of the pandemic, and the rise in prices will continue at about the same pace, especially in summer,” the expert said.

Influence of infrastructure on home sales

The fact that the Gebze-Izmir motorway made it easier to travel from the Aegean region to Istanbul had a significant impact on the situation. It is also assumed that with the commissioning of the Çanakkale 1915 bridge, which is planned to open very soon, it will become even easier and more convenient to get there, which will certainly attract a stream of new investors to the coastal regions.

“The Aegean coast is an undisputed leader in price growth,” says Emel Akbaş, founder of Projekspert Real Estate. – “Due to the pandemic, the growing demand for coastal areas continues this year. Obviously, demand will persist as long as distance work and distance learning continue.”

Location number one is Bodrum and its surroundings, as this area has already gained worldwide fame as an extremely comfortable resort. It is followed by Dalaman, Datça, Fethiye and Edremit. Urlu, Seferihisar and Foçu are preferred by those seeking tranquility near Istanbul.

Whatever it was, in 2021 we expect significant growth in the traditionally preferred summer directions.

Endeksa's partner Görkem Ogüt: “As a result of the need to increase the time spent at home and the widespread use of distance, the DEMAND for large houses with balconies and preferably their own gardens has grown dramatically. The number of requests for housing on the coast has also increased markedly; at the same time, prices rose significantly due to a decrease in the volume of available housing: after all, real estate was quickly sold out. According to Endeksa.com, house prices in Turkey have increased by 33.84% on the national average. At the same time, in summer regions this figure is much higher - almost 69%, and rental rates have risen by 52%”.

Among the regions studied by Endeksa in terms of price growth, the leaders mentioned in the article above are Yalikavak (69%), Çarşı (68%), Torba (67%), Alaçatı (51%) and Bodrum Çiftlik (49%). “Thus, we do not expect a decline in housing prices, because the free fund is shrinking, and construction cost is growing. So, prices will continue to grow this year and the next,” the expert said.

The growth in the number of requests for housing loans is evident

Erkhan Satana, head of the mortgage division of Garanti BBVA, said: “As for the loans provided by our bank, we noticed a significant increase in 2020 compared to 2019. The greatest demand for loans was recorded in the provinces of Izmir, Muğla and Antalya, and precisely along the coast. We have also seen a significant increase in demand for residences in the coastal areas of Çanakkale and Balikesir. "

The future leaders are Kaş and Çeşme, and “coming back to leaders” Marmaris

We have already mentioned that since people now prefer separate buildings with gardens and spacious balconies, the price of such properties has increased by 68-69%. But from the regions not too well known to our compatriots, Russian investors, in addition to Bodrum, should take a closer look at Datça and Kaş. Both of these cities are located in the province of Muğla, not far from the more famous Russians of Marmaris and Fethiye.

The demand for Çeşme, a seaside resort town near Izmir, has also skyrocketed.

In particular, according to information from Turkish developers, many foreign investors have already turned their attention to Kaş (there is no need to tell the Turkish about this seaside city: it has long been popular among them). In Çeşme, the cost of housing considered comfortable in the context of a pandemic has already exceeded 2 million Turkish liras. 

In Datça, the cost of 1 square meter of residential real estate in 2020 was 8 147 lira, the average price per house was 830 994 lira, and the payback period for housing investments was estimated at that time at 30 years. 

In Bodrum and Kaş, which cost has increased by 60 percent over the past year, the average cost of housing was determined at 1 617 560 liras for Bodrum and 1 million 585 thousand 650 lira for Kaş, the payback period was respectively 32 years in Bodrum and 43 years in Kaş.

Infrastructure also played a big role here: just after the construction of the Istanbul-Izmir highway, which leads to Çeşme as well, the cost of housing in Çeşme exceeded two million. The average cost of a “square” in this village for the period of price research after the commissioning of the highway was 13 175 Turkish liras, while the price of housing increased by 55%. However, the payback period, given the high cost, is quite long (as in Kaş): 45 years.

Let's remember the rarely mentioned Marmaris lately - a very beautiful and comfortable coastal city. It rarely pops up in the news of the real estate market because there are almost no free plots left here (this situation has been there for several years already). There is practically no new construction, and local real estate agents strongly recommend potential investors to be vigilant and not agree to buy housing on the Internet: it is in Marmaris that there are especially many apartments and “ghost” houses that do not exist in reality.

Nevertheless, there is still an offer of the primary housing at some distance from Marmaris and the secondary housing in the city itself, and, despite not too large assortment of free housing, you can still find something for yourself.

Let us clarify that in Marmaris over the past year, the average cost per square meter was 7 107 Turkish liras, housing units reached 994 980 TL, and the increase in price was 39%. The payback period in this coastal city is the same as in Kuşadası and some districts of Alanya: 26 years.

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