Selling a house in Turkey and steadily rising prices for local real estate can bring an owner a good profit. Official data shows that the value of real estate has increased by over 50% in 2021. The growth prospects for 2022 are driving investors' interest. This makes purchasing a home to resell more appealing.
Content:
- Prospects of the Turkish real estate market
- Options to earn money on Turkish real estate
- Additional earning options: where is it better to buy a house?
- How to improve the efficiency of investments: what actions to take
- We’ll help you make money reselling real estate in Turkey
Prospects of the Turkish real estate market
International investors are seriously targeting the Turkish housing market. It’s possible to get long-term passive income or instant profits by reselling a property. Forbes says that in 2020, up to 80% of foreign buyers of houses and apartments in Turkey purchased them as a source of profit. Other buyers expected to get Turkish citizenship by buying housing.
Preliminary data on the real estate market in Turkey for the end of 2021 - beginning of 2022 are as follows:
- Dynamic price growth in Istanbul, Ankara, Bursa, and Izmir.
- Housing prices change by region, city, and district.
- Despite the uneven recovery, prices are rising in all cities.
- The rental market has also been developed. The rent also changes depending on the location and features of the housing.
The price increase at the end of 2021 is projected to continue in 2022. Based on this, analysts of the Trading Economics publication say that now is a good time to resell local real estate.
Options to earn money on Turkish real estate
The most common ways to earn money on Turkish real estate are by reselling the house or apartment after construction or repairs are finished. You can also buy housing to rent out. We’ll take a closer look at each option.
Why is it profitable to resell Turkish housing?
The Insider Monkey international portal on finance and investments says that Turkey has entered the top 20 most attractive countries for real estate investment in 2021. What caused this?
The Turkish economy has strong competitive sectors. Tourism and real estate are one of their main drivers. Thanks to this, in 2021, the average annual GDP growth was 11%. Real estate in Turkey attracts buyers from all over the world with its high quality, comfort, and affordable prices.
The advantages of reselling Turkish housing for profit are:
- Low “market entry" prices even though there’s steady growth of new and secondary property.
- The constant demand for housing means being able to quickly find a buyer.
- An established system of state regulation in the real estate sector means fast transactions within 2-3 weeks.
- Housing remains a valuable asset at low rates of price growth.
- New off-plan buildings in Turkey for resale after commissioning of the property are usually sold for 15-25% more. In some cases, the profit can be up to 35% (depending on the property, its location, and the features of the apartment).
Renting
Rental income from real estate in the Republic of Turkey usually brings owners 2 to 6% per annum. The profit may be more or less depending on the location, its liquidity and features.
In 2021, rental housing received a new boost. Here’s some information about the popular tourist areas:
- Istanbul – the increase in rental costs for 2021 exceeded 150%;
- Izmir – 100%;
- Ankara – 77%.
The government is trying to contain this high rise in prices but it’s not working.
Additional earning options: where is it better to buy a house?
To profitably resell a property in Turkey, you need to decide beforehand where and what you’ll buy, and choose either a new off-plan building or secondary or primary real estate. Let’s consider the features of each.
New off-plan buildings in Turkey
How do you profitably resell an off-plan property? It’s this easy: invest at an initial stage and wait for the construction to be completed. Prices for off-plan apartments are more affordable than ready-made housing. That’s why many people prefer to invest in them.
Depending on the stage of construction, when you buy real estate, the cost of an apartment increases by 15-35% after its commissioning. If you buy a house at the initial stages of its construction, the benefit from resale is usually 30-35%.
Advantages of off-plan real estate:
- buying apartments below the market price;
- cheaper than similar ready-made housing by 15-20%;
- resale benefit up to 35%;
- individual payment plan;
- initial payment from 10 to 30%;
- a wide range of properties;
- buying from the developer without VAT;
- mortgage at 5-7% per annum.
The off-plan housing sector grew slightly in the third quarter of 2021 and continues to rise in the fourth quarter. There were 43,967 transactions, which is 6.3% more than in 2020.
Reselling secondary housing
Housing in the secondary market in Turkey can be different depending on the features of the area and building. It has some advantages that off-plan doesn’t:
- you don’t need to wait for construction to finish;
- it can be sold immediately;
- there’s no risk of being cheated by depositors;
- if you choose a good and densely populated area with developed infrastructure and established demand, you won’t have problems reselling.
In September 2021, the number of apartments sold in new off-plan buildings was 42,639 compared to 103,176 secondary properties.
Which cities are popular with buyers?
- Istanbul – 2,995 real estate transactions among foreigners;
- Antalya – 1,358 deals;
- Ankara – 408 deals.
How to improve the efficiency of investments: what actions to take
Investors and entrepreneurs who want to be property owners in Turkey and make a profit by reselling should choose a profitable property.
How can you do this? Pay attention to these things:
- Real estate type.
- Area.
- The market.
- Location.
- Location features.
What exactly do these things mean?
1. Real estate type
Apartment, house, or villa. Depending on the type of housing, the demand for it and its liquidity can change. 2021 showed a shift in the preferences of the mass buyer to spacious villas and houses. People are tired of restrictions and want to improve their living conditions. They mostly want more space. Some people choose large villas because they work remotely and want to create their own workplace, while still being with family.
This has impacted housing prices. The more spacious the apartment is, the more expensive it is per square meter.
The average cost of apartments:
- 1m2 of living space in apartments up to €40,000 – € 636;
- 1m2 of living space in apartments for €250,000 or more – € 2,900.
Apartments and studios in the middle price segment cost around €36,200 on average and in the premium class about €475,000.
Detached houses and villas:
- 1m2 of living space in properties up to €100,000 – €630,000;
- 1m2 of living space in properties for €500,000– €3,100,000.
Detached houses and villas in the middle price segment cost €85,000 and the premium class – € 1,500,000.
2. Living area
If you are looking for an apartment for rent, you should buy small apartments and studios of 35 m² or more. They are also suitable for resale especially ones in an off-plan residential complex.
3. The market
The Turkish secondary real estate market is different from others. Depending on the area and building, the property and its condition may vary. There are old houses built over 40 years ago and some are less than 3 years old but because of frequent changes in ownership, they can be considered secondary housing. The quality of this real estate is high and can compete with new residential complexes. New buildings also have all the advantages of modern housing.
Every market is good in its own way. To understand which option is perfect for you, you should seek help from a specialist.
4. Location
The coastal and central cities, districts and provinces of Turkey are great for renting especially those that combine comfort and a variety of leisure.
The most popular ones are:
- Antalya – average rental income of about 6% per annum;
- Istanbul – the average rental yield of real estate in the city in 2021 is 5.31%;
- Alanya – the average rental income is 4.04% per annum.
5. Location features
If you want to resell housing quickly and without problems, we recommend choosing the area very carefully and paying attention to things like:
- Transport accessibility.
- The infrastructure of the residential complex.
- Close by infrastructure.
The more thought you put into choosing a home, the more likely the buyer will pay attention to your offer.
We’ll help you make money reselling real estate in Turkey
Reselling residential real estate in Turkey is faster if you entrust the work to an experienced specialist. Turk-Real.Estate managers will help you choose a liquid property, tell you where you can profitably buy an apartment in a new building in Turkey, and speed up the process of finding the final buyer.
Agents will provide you with information, support, answer your questions about the purchase and sale, and ensure a secure transaction.