İzmir: Expensive but Promising

İzmir, one of the largest Turkish metropolises, successfully combines extensive business opportunities, an active lifestyle, and a seaside location. For understandable reasons, it is considered an expensive place to purchase real estate. Especially now, given the economic situation of the average Turkish family, the number of İzmir residents among the locals who can afford to buy their own apartment has dropped to 5% .

Despite the authorities’ efforts to “normalise rental policies” to reduce property rental rates, İzmir is one of those cities where rates are not decreasing. This is because the demand is high, year-round. Every month, approximately 5–8% of housing transactions across the country occur in this province.

Therefore, we recommend you to take a closer look at real estate in İzmir. Here are some important figures and facts.

Content:

• Rent
• Sale
• Basic figures
• Housing prices by district in the province
• Key findings (can be used as guidelines for investment property selection):

Rent

As far as renting is concerned, just over half a year ago, the figures were as follows:

+154% = growth in rental rates over 12 months (from April 2022 to April 2023);

+269% = growth in rental rates over 24 months.

The average cost of renting 1 m² was 63 Turkish liras (TL) ($2), and the average rent (province-wide) was TL 6,932 ($229). However, in the most sought-after locations like the resort town of Çeşme, as well as Güzelbahçe and Urla, rates were at least TL 10,000–15,000 ($330–$496), while in the central districts of İzmir, they were TL 7,000–8,000 ($231–$264).

By the beginning of winter, i.e., in 5–6 months, rental prices jumped significantly. And, as the authorities assure, they “decreased”-for İzmir, however, this “decrease” means the rates shifted from being “exorbitant” to “just expensive.” So, regarding real estate in İzmir as “unprofitable” would be, frankly, unreasonable.

Sale

As of November (not all analysts are ready to present official statistics for December 2023), property sales in İzmir decreased very slightly-by 1.7%-compared to the previous month. This is notable since the overall “average” decline in the country is significantly higher.

In November, 5,105 housing units were sold in İzmir Province: 28.7% accounted for new builds, and 71.3%, for resale properties. The majority of transactions are made without a mortgage: 95.7% for new builds (again, based on November data) and 92.8% for resale properties.

Over 11 months, the number of housing transactions decreased by 19.6%, from 86,012 units to 69,175. In İzmir, 27.3% of housing sold from January through November belongs to recently built properties, while 72.7% belongs to already commissioned ones (this includes newly constructed, but already inhabited houses where investors bought housing while the construction was underway or even at the excavation stage, and after completion, resold brand-new apartments with a significant profit).

It is worth noting that 87% of new builds and 82% of resale homes in the 11 months were purchased without mortgage financing, vividly confirming that buyers come to İzmir pretty well-heeled.

Now let’s move on to more detailed information on property prices from different companies analysing real estate. According to Zingat’s report (also for the first 11 months of 2023), housing prices increased by 2.16% over the last month; by 595% over 3 years; and by 817.7% over 5 years (in TL).

The average cost per 1 m² in İzmir is TL 27,739 ($917), and the payback period is 17 years (which is very good compared to other provinces).

The price of a “standard unit” (an average 100 m² apartment) in İzmir ranges from TL 2.08 million ($68,800) to TL 3.46 million ($114,622).

More detailed data on districts and average prices, including those for December, have been published by the expert portal analysing prices for real estate in Turkey, Endeksa.

Basic figures

• As of the end of December 2023, property prices for sale in İzmir increased by 14.88% over the past 12 months.
• The dynamics of the cost increase are as follows: +5.78% over the month; +14.88% over the year; +108.4% over 2 years; and a forecast for the next 12 months is +38.87%.

Characteristics of a typical residence in İzmir:

• Average price: TL 3.79 million ($125,425).
• Average area (Endeksa gives a more spacious area residents of the province are used to): 125 m².
• Average return on investment: 17 years (in this matter, analysts from different companies seem to be in agreement).
• Average price per 1 m² of residential property for sale as of the end of December 2023: TL 30,437 ($1,003).
• Minimum/maximum price per 1 m² in the province: from TL 17,693 to 68,627 ($585–$2,269).
• Average selling time of a unit: 65 days.

Housing prices by district in the province

Key findings (can be used as guidelines for investment property selection):

• High price growth rates are observed in the following districts of İzmir: Bayındır, Ödemiş, Güzelbahçe, Bergama, and Selçuk.
• The districts with the fastest appreciation are Kiraz, Kınık, Karşıyaka, Karaburun, and Gaziemir.
• The only district where prices decreased over the year is Gaziemir (-1,29%).
• The districts with the shortest return on investment are Bayındır, Çeşme, Dikili, Karaburun, and Kemalpaşa.
• The districts with the longest return on investment are Urla, Güzelbahçe, Menderes, Narlıdere, and Foça.
• When it comes to return on investment, Urla is at the bottom with a whopping 29 years (however, it is also one of the most prestigious districts in the province).
• The most expensive real estate can be bought in Çeşme/Alaçatı: $2,873/1m²; the second most expensive district is Urla: $2,194/1 m²; and the third is Güzelbahçe: $2,126/1 m².
• The lowest cost per 1m² of real estate is in Bayındır: $417.
• This area is noteworthy as it is also among the districts with the highest year-over-year price growth. An increase of 25% or more was recorded in Bayındır, Bergama, Kemalpaşa, Kınık, Kiraz, Ödemiş, Selçuk, Tire, and Torbalı.