Turk Estate is pleased to discuss the residential real estate market in Istanbul, highlighting trends and opportunities for buying and selling in 2024, including prospects in this area.
Istanbul is one of the most important cities in Turkey, rich in historical and cultural significance. As the largest metropolis with a unique location spanning both European and Asian parts, the city boasts a rapidly developing economy. Numerous multinational companies have branches here and the city is home to many universities. These factors make Istanbul an attractive destination for foreign investors, with a steady increase in housing costs.
Let's explore the trends of 2024 identified by analysts.
Content:
- Economic indicators
- The balance of supply and demand
- The role of foreign buyers
- Forecasts
- Investments "by districts"
- Investments "by priority purposes"
- Prices in July 2024
Economic indicators
Economic indicators are one of the important factors for the Turkish real estate market. Macroeconomic factors, such as inflation, interest rates and exchange value, have a direct impact on housing prices and purchasing power. Without a doubt, the cost will continue to rise in 2024. The depreciation of the Turkish lira enhances the profitability of buying properties in dollars/euros fuelling market activity and attracting foreign investors.
The balance of supply and demand
Affordable housing options in Istanbul are expanding through new development projects in Turkey. Despite being the leading city for secondary real estate sales in the country, Istanbul also offers premium options, including branded complexes from renowned developers, which are highly sought after.
However, Istanbul is a city where there’s always a housing shortage and demand remains high due to population growth, driven by both internal migration from other regions and external migration from other countries, as well as the level of urbanisation. Urban transformation projects are expected to significantly impact supply in 2024, as forecasted.
We recommend considering renovated high-quality properties in areas close to the city centre, as well as new residential complexes in developing communities. These areas have great potential, particularly those with new metro lines nearby, where real estate prices are expected to increase by 15% to 30% after the new stations open.
It’s sensible to focus on residential buildings constructed with eco-friendly elements, such as natural decor materials and spaces promoting a work-life balance. Smart home technologies and energy-efficient buildings powered by renewable energy sources, reusing water, etc. are certainly among the future investment trends. Moreover, these features are in high demand among buyers: affluent individuals prefer to live in houses in Turkey that are not only beneficial for their health but also environmentally friendly.
We recommend reading the article "Innovative approaches in the field of construction in Turkey" posted on the portal.
The role of foreign buyers
Investors from abroad have always played an important role in the city’s real estate market. This pattern is expected to persist in Istanbul in 2024, as the city remains a popular choice for purchasing apartments in Turkey to obtain "citizenship by investment" (starting at USD 400,000). This not only serves as an "investment in a passport", but also promises a prompt return, such as renting out the property to tourists and professionals in the city.
Moreover, investors from the Middle East and Europe are interested in buying housing in Istanbul.
Forecasts
Economic indicators, the balance of supply and demand, investment opportunities and overseas buyers’ interest will continue to shape the dynamics of the market.
As before, housing prices in Istanbul will vary greatly depending on the area. The city offers various properties to suit every taste and budget. In 2024, there’s a significant increase in housing prices, especially in central areas such as Beşiktaş, Şişli and Bakırköy on the European side. The cost of space is growing rapidly due to high demand and limited supply: there’s a high concentration of buildings and the number of available land plots in Turkey is limited, which forces investors to actively compete for affordable projects.
As for the Asian part of the metropolis, areas such as Kadıköy, Üsküdar and Ataşehir stand out for their location and high quality of life. The financial centre project in Ataşehir and the new metro lines positively impact the real estate prices in the region, including areas near Sabiha Gökçen airport and its surroundings.
Districts such as Esenyurt, Beylikdüzü and Sancaktepe boast spacious territories and new housing projects. Real estate prices in these locations are more affordable than in the city’s central quarters.
Investments "by districts"
There’s more detailed information by district: the most sought-after neighbourhoods in popular and developing areas of Istanbul attract significant buyer interest in 2024. Here are some of the attractive ones for investment:
Kadıkoy
Kadıköy is one of the most sought-after areas for purchasing housing in the Asian part of the metropolis. Its central location contributes to its popularity. Neighbourhoods such as Bagdat Jaddesi and Moda offer ideal living conditions and a favourable price-to-space balance, particularly for young professionals and families.
Beşiktaş
Beşiktaş is one of the prestigious areas on the European side of the city, known for its proximity to the Bosphorus and historical heritage. Buyers often choose locations such as Yıldız, Ortaköy and Arnavutköy for both living and investment, aiming to maximise their property's value.
Ataşehir
Ataşehir is well known for its future financial centre project. The area features modern housing and offers ample opportunities for work and business. As such, it’s an excellent option, especially for young professionals and families.
Beylikdz
This area offers significant potential for investors due to its affordable housing options and rapidly developing infrastructure. The substantial number of new apartments in development projects in Turkey and spacious residential areas are two reasons why many potential buyers look at properties in this district.
Umraniye
Ümraniye is one of the rapidly developing areas on the Asian side. This district features numerous new residential complexes and commercial areas, including offices, making it convenient for diversifying investments and ensuring income stability. With the expansion of the Istanbul metro network, transportation options in Ümraniye have improved, making the area appealing to those looking to buy a home in one of the off-plan projects in Turkey.
Kartal
The long coastline, marina and easily accessible metro system enhance the appeal of this region. Similar to Ümraniye, we recommend considering both residential and commercial properties in this district.
Investments "by priority purposes"
If you have no specific location preferences for real estate in this area, you can consider the following options:
- Residential complexes as part of a nationwide urban transformation project. These include renovated buildings (old but modernised) in Kirtepe, Gaziosmanpaşa and Zeytinburnu;
- Locations near airports: These offer transport advantages and are associated with the steadily increasing cost of housing;
- Real estate in areas with marinas and beaches, such as Tuzla, Pendik, Bakırköy and Fenerbahçe;
- Old villas for sale in Turkey located in elite areas overlooking the Bosphorus, which have been transformed into premium residential complexes. We have previously discussed such projects;
- Focus on "rental income": To reduce the payback period of investments, consider running a rental business. It’s worth paying attention to Beşiktaş (known for high rental rates, universities and business centres), Kadıköy (also popular) and Şişli (loved by businessmen and students).
Prices in July 2024
- As of the end of June 2024, prices for housing for sale in Istanbul have increased by 43.35% (in Turkish lira) in the last 12 months alone.
- The average price of a typical 114 m² apartment is USD 143,174.
- The average price per 1 m² is USD 1,256.
- The lowest/highest price per 1 m² is from USD 626 to USD 3,374.
- The average return on investment in housing in Istanbul has been reduced to 15 years.
- If we consider the average figures, as of the end of June, residential real estate in the districts of Beykoz, Kadıköy, Beyoğlu, Beşiktaş and Kartal is rising in price the fastest.
- Housing prices are rising the slowest in the districts of Kyakhane, Başakşehir, Avcılar, Sarıyer and Zeytinburnu.