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The end of the year is the time for summing up the results and making forecasts for the next year. Turkish real estate experts predict a further rise in prices for land, houses and apartments in Turkey and give reasons for this rise.
Impact of the pandemic on the Turkish sector
Emlak Kulisi, a construction and real estate newspaper in Turkey, reports that the impact of the pandemic on the Turkish sector has been very serious. However, a unique mortgage campaign that kicked off in the summer of 2020 has revived the Turkish construction and real estate sector. According to the Institute of Statistics, in July alone, almost 230,000 houses and apartments were sold in the country: the property sales increased by 124 percent compared to July 2019. A significant increase in demand led to a rapid rise in prices: apartments, which before the mortgage campaign had cost about 500,000 TL, were sold for 750,000 TL.
A gradual increase in mortgage rates was followed by a sharp increase in prices for basic building materials - iron, steel and cement. All this led to a slowdown in the construction and real estate sector in Turkey and to a further increase in apartment prices in 2021.
Mustafa Andic, President of the Association of Construction Contractors, Industrialists and Businessmen (İMSİAD): “The cost of iron, which at the beginning of 2020 was 3200 TL per ton, reached 6,000 TL in mid-December. Prices for other building materials are also growing. This will inevitably affect the cost of new apartments in Turkey and production costs for contractors. It is expected that at the beginning of 2021, prices for houses and apartments in Turkey will go up. Turkish contractors just have to switch to domestic building materials and minimize the use of imported ones."
Growing prices for iron will increase contractors' costs by 10 percent, experts say. While in 2020 this rise in price was not taken into account in property pricing, next year it will certainly affect the cost of new apartments in Turkey.
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How has the demand for real estate in Turkey changed by 2021?
The coronavirus pandemic has changed the preferences of home buyers in Turkey. Today, the most sought-after housing options are self-contained houses with a garden as well as prefabricated houses. On the other hand, the so-called old real properties - apartments in buildings over 30 years old - are in less demand (due to the seismic threat). Given the new demand, construction companies in Turkey are now rolling up their sleeves: they are erecting low-rise villa complexes in picturesque suburbs. The best real estate option in Turkey has become villas in the seaside regions.
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What will property prices be in 2021?
As the construction sector has stabilized, mortgage rates began to rise. With an increase in mortgage interest rates in Turkey, there is a slight decrease in residential property sales, but the property prices continued to rise as the demand for housing has remained high.
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Real estate experts predict an increase in housing prices as a result of rising demand and the inevitable rise in costs of construction companies. If the coronavirus vaccination helps fight the pandemic in 2021, Turkey's economy will be able to recover and the construction sector can become more active. Even with a further decrease in interest rates, market experts predict that at least 120,000 apartments and houses will be sold monthly in Turkey in 2021. For those looking for a long-term investment perspective, experts still recommend investing in housing. In 2021, real estate prices in Turkey are expected to rise up to 50 percent: those who are considering buying a house or apartment, it is the right time to start searching for a suitable property.