Let’s examine the trends in the market of real estate in Turkey, which have become more evident with the arrival of autumn. With most of the year behind us, we can confidently summarise the interim results.
Content:
- Sales to foreigners
- Preferred locations
- Prices per square metre
- Turkey is the leader in terms of annual rental income
- Where can you buy property to rent out profitably?
Sales to foreigners
In the first eight months of this year, the number of transactions involving foreign buyers dropped by 40% compared to the same period in 2023. This decline is attributed not only to a significant rise in property prices but also to changes in documentation requirements. In October 2023, the minimum investment threshold for obtaining a residence permit through property ownership was unexpectedly raised to USD 200,000, with the change announced almost retroactively. Until October last year, for obvious reasons, foreigners were far more willing to purchase houses and flats in Turkey, motivated by the opportunity to secure a residence permit.
NOTE
The number of foreigners currently residing in Turkey with a residence permit is 1,084,825.
As per the Directorate responsible for immigration, 886,653 foreign nationals held residence permits in the Republic of Turkey in 2020. This figure increased to 1,314,181 in 2021. In 2022, 1,354,094 people were already recorded. However, in 2023, there was a sharp decline, with the number dropping to 1,107,032. Due to the same tightening of rules for issuing residence permits, the outflow of foreigners began last year and the interim figure for 2024 is therefore similar to the results for 2023.
As of 12 September 2024, citizens of the following countries hold the highest number of residence permits in Turkey:
- Turkmenistan — 109,530
- Iraq — 78,615
- Iran — 76,897
- Syria — 76,377
- Azerbaijan — 71,372
- Uzbekistan — 55,271
- Kazakhstan — 44,789
- Afghanistan — 38,80.
- Ukraine — 35,531
In August 2024, home sales to foreigners fell by 26.2% year-on-year, with 2,257 units sold.
Preferred locations
Among the most popular destinations, Istanbul ranked first in August, with 838 properties sold, followed by Antalya (696) and Mersin (174). However, based on the results for the first eight months, the ‘resort capital’ Antalya remained the preferred city for investment in residential property. Every third foreigner now chooses it as a place to buy a flat or house.
For comparison, from January to August 2023, sales of housing to foreign citizens totalled 25,134 units, while for the same period in 2024, the figure was 15,068 units.
Additionally, foreigners purchased the most housing in the following cities:
- Antalya — 5,442
- Istanbul — 5,196
- Mersin — 1,334
- Ankara — 370
- Yalova — 365
- Kocaeli — 267
- Izmir — 248
- Aydın — 245
- Trabzon — 223
The ‘rating’ of transactions by nationalities (top 10 countries) for January to August 2024 is as follows:
- Iran — 1,392
- Ukraine — 1,057
- Germany — 80.
- Iraq — 748
- Kazakhstan — 692
- Azerbaijan — 517
- Saudi Arabia — 393
- USA — 371
- China — 342
- Afghanistan — 331
Prices per square metre
Analysts have also identified where the most expensive square metres are located.
Note: These statistics consider figures not just for the city, capital or district but for the entire province as a whole. For example, the average price for Muğla, which includes resorts such as Fethiye, Bodrum, Marmaris and Oludeniz, was significantly influenced by the extremely high housing prices in Bodrum.
As the analytical portal Endeksa specifies, when comparing the four most important cities (Ankara, Istanbul, Antalya and Izmir) for buying houses for sale in Turkey (including for foreigners), the highest growth in nominal value was observed in Izmir. The annual price change in Izmir in nominal terms was +33%. These figures are not adjusted for inflation. Istanbul and Ankara shared second place with a +32% increase in both cities.
Here is the list of the 20 Turkish provinces with the highest average cost per square metre of living space, from the most affordable to the most expensive:
- 20th place: Bursa — TL 23,341 (USD 683)
- 19th place: Rize — TL 23,440 (USD 686)
- 18th place: Ysparta — TL 23,814 (USD 697)
- 17th place: Ordu — TL 23,959 (USD 701)
- 16th place: Mersin — TL 24,052 (USD 704)
- 15th place: Sakarya — TL 24,303 (USD 5)
- 14th place: Yalova — TL 24,733 (USD 724)
- 13th place: Kırklareli — TL 24,811 (USD 726)
- 12th place: Kocaeli — TL 25,555 (USD 748)
- 11th place: Zonguldak — TL 25,809 (USD 5)
- 10th place: Sinop — TL 26,967 (USD 5)
- 9th place: Bartın — TL 27,240 (USD797.5)
- 8th place: Edirne — TL 27,319 (USD 800)
- 7th place: Balıkesir — TL 31,489 (USD 922)
- 6th place: Çanakkale — TL 32,083 (USD 939)
- 5th place: Izmir — TL 35,238 (USD 1,032)
- 4th place: Antalya — TL 35,595 (USD 1,042)
- 3rd place: Aydın — TL 38,588 (USD 1,130)
- 2nd place: Istanbul — TL 40,741 (USD 193)
- 1st place: Mugla — TL 61,419 (USD 1,798)
As you can see, a square metre in Muğla is 1.5 times more expensive than even in Istanbul. However, Muğla Resorts is more of a summer destination in terms of accommodation and rent.
Turkey is the leader in terms of annual rental income
Turkey ranks at the top among countries where foreign nationals make significant property investments and there is a large immigration population. Here is its comparison with other countries based on the independent portal Global Property Guide for September 2024:
- 1st place: Turkey — 7.13% rental yield per year (as a percentage of the price for residential property)
- 2nd place: UK — 7.03%
- 3rd place: USA — 6.10%
- 4th place: Spain — 5.93%
- 5th place: Montenegro — 5.61%
- 6th place: Portugal — 5.47%
- 7th place: UAE — 5.27%
- 8th place: Greece — 4.82%
- 9th place: Cyprus — 4.57%
- 10th place: Germany — 3.67%
Where can you buy property to rent out profitably?
Based on the latest data from the analytical portal Endeksa, the top five cities in Turkey offering the highest annual rental income are:
- 1st place: Ankara — 9.81%
- 2nd place: Erzurum — 8.77%
- 3rd place: Eskisehir — 8.75%
- 4th place: Şanlıurfa — 8.45%
- 5th place: Gaziantep — 8.37%
Note: in Gaziantep and Şanlıurfa, the high return on investment is largely due not so much to the popularity of the provinces but to the fact that their neighbourhoods were affected by a devastating earthquake that occurred more than 1.5 years ago. Many families are still in need of rental accommodation. There has also been a significant flow of such migrants to Ankara, a province nearby.
Therefore, alongside Ankara, Istanbul, Izmir, Antalya and Alanya, which is the most popular resort town, these areas are all considered promising destinations for the rental business.