Istanbul and Izmir: which areas are at the "centre" of attention

Both above-mentioned Turkish megacities are developing at a rapid pace, especially Istanbul, due largely to the laying of new routes and metro lines. Changes in the "web" of transport infrastructure in turn change the "alignment" in the residential and commercial real estate field. The attractiveness of certain areas with increased transport accessibility has increased dramatically. This is exactly what we are going to talk about in the article.

Content:

• Istanbul Pendik is in the top sales
• The average cost of housing, the return terms on investments and the change in the value of the real estate in different neighbourhoods of Pendik
• Profitable areas for rent in Istanbul
• Average rental cost in Istanbul districts
• Profitable areas for rent in Izmir
• Average rental cost in Izmir districts

Istanbul Pendik is in the top sales

Pendik is one of ten districts in Istanbul where property owners received the highest profit from investments over the past year. With the opening of the Pendik - Sabiha Gokcen Metro line, housing prices in Pendik and surrounding areas are increasing with each reporting period. The cost of housing in Pendik has increased by 250% over the past year and by 490% over the past 4 years. Meanwhile, the largest increase was recorded in the districts of Chamcheshme, Esenyali, Fevzi-Chakmak, Chynardere and Ahmet Yasavi. Land plots are also in demand.

As per the data of the analytical portal of Turkish real estate Endeksa, the average price per square metre of housing in the Pendik area is 17,500 Turkish lira (TL), the average cost for one lot has reached 1 800,500 TL, and the payback period for housing investments is now 22 years.

Gerkem Ogyut, co-founder and CEO of Endeksa, mentioned that Pendik is among the TOP 10 most profitable (regarding passive income for housing investors) districts of Istanbul. He goes on to support this statement by showing that since the construction of the Sabiha Gokcen Airport and, taking into account all the upcoming changes in transport and infrastructure for the future, the Pendik district has become one of the most attractive in the metropolis in terms of investment.

Gerkem Ogyut also clarified that, although the dynamics of the housing price growth in Turkey as a whole has decreased in recent months, the cost continues to increase. Pendik, as an actively developing area, will still bring investors far more profit than other districts for at least some time.

The average cost of housing, the return terms on investments and the change in the value of the real estate in different neighbourhoods of Pendik

• As shown above, the fastest-paying microdistrict is Esenler (17 years old), followed by Orhangazi, Ahmet Yassavi and Chamcheshme. Investors are also recovering their funds faster than the district average in the neighbourhoods of Esenyaly, Fatih and Kaynardzha (20 years) and Kurtkey, Sheikhli and Guzelyaly (21 years).
• Chamcheshme, Esenyaly, Fevzi Chakmak, Chynardere and Ahmet Yassavi have increased in price by 300% or more over the year.

However, Pendik is certainly not the only Istanbul district where it’s profitable to invest with a hope of a speedy return.

Profitable areas for rent in Istanbul

As of mid-November 2022, the average rent for housing in Istanbul increased by approx.150% over the past year.

According to Endeksa, which determines the value of real estate with the help of "artificial intelligence", rent in the metropolis has risen by an average of 144% over the past year and by 319% over the past two years.

The average rent per square metre in Istanbul is presently 94 TLand the average rate for a residence is 10,229 TL.

The authorities hope to reduce rental rates over time by convincing the owners of empty housing to rent out their homes. However, it’s just a matter of time. Gerkem Ogyut believes that it’s not worth waiting for a drop in rental rates very shortly, although there should not be such a rapid increase as was recorded at the time of the previous study of this kind.

Saryer, Besiktas, Beyoglu, Shishli and Kadikey are the areas with the most expensive rentals in Istanbul. At present, the average in Saryer accounts for 28,500 TL per residence (five times higher than the min. wage today), in Besiktas - 22,200 TL (four-fold higher), 15,555 TL in Beyoglu (three-fold higher); 14,725 TL in Shishli and 17,040 TL in Kadikoy.

Average rental cost in Istanbul districts

Let’s recall that tariffs below 5000 TL are, in fact, almost impossible to find even in provinces where they’re fixed (Silivri, Chatalja). In many major cities, average rental rates have already exceeded 10,000 TL.

Rents will not fall, but there’ll not be a strong increase either, says Gerkem Ogyut: "Rental prices have increased by 155% across Turkey over the past year as a result of the exchange rate fluctuations and inflation, and due to the consequences of the pandemic. The average rent per square metre in the country was 55 TL, the average rent per unit of housing was 6520 TL, and the average increase in the cost of rent over two years was 258%. When we look at the Endeksa data, we recognize that rent growth continues, but the dynamic has slowed down. If in April and May of this year, there was an increase in rent by 15-17% monthly, now we have reached an indicator of over 4-5% per month. So, we don’t expect a drop in rents shortly, but there will not be such a high growth as in the previous period tracked by Endeksa, either."

We would like to remind you that it’s quite rational to invest in Istanbul even without the purpose of further residence or obtaining citizenship.

Profitable areas for rent in Izmir

Izmir, one of the four largest megacities in Turkey, and one of the two (of these four) located by the seashore, also demonstrates similar dynamics.

The rent for housing in Izmir has increased by 154% over the past year and by 269% over the past two years.

The average rent per square metre was 63 TL, and 6932 TL per unit of housing, higher than in the whole country.

Cesme, Guzelbahce, Karshiyaka, Narlydere and Urla are the most intensively "growing" in price, as per the statistics obtained by Endeksa.

Average rental cost in Izmir districts

• As in Istanbul, there’re areas where the average rental price is above 10,000 TL. Although there are fewer of them: Cesme, Guzelbahce, Karsiyaka, Narlidere.
• The average rental rate is fixed in Foca and Buca, which is higher than that in reality.
• The cheapest rental housing, based on the price per square metre, is in Foca, Kemalpasha, Menderes, Karabag and Menemen. It ranges from 50 TL.