In the context of the recently adopted changes regarding the sale of housing to customers from abroad, new trends have become noticeable in the Turkish real estate market.
Recall that in mid-April 2022, it became known that the minimum threshold for obtaining Turkish citizenship under the accelerated procedure was raised from $250 000 to $400 000 (in 2018, on the contrary, it was reduced fourfold: from $1 million to $250 000). In mid-May, information appeared that about 30 days remained until “H hour.” According to the data at the time of writing, the last days for concluding deals with the possibility of obtaining citizenship with investments in housing worth less than $400 000 are June 10-12. From June 13 (two months after the announcement of the decision) the conditions will be updated.
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But even before the information about this development appeared, the average price of a housing unit bought by an investor from abroad was steadily increasing. Since the beginning of the pandemic, this trend has intensified - people have started to buy more spacious apartments and houses, if possible, in prestigious locations and from well-known developers whose default price tag is higher. So last fall, the goal was to bring the above-mentioned average price up to $225 000 as soon as possible, and in general, to reorient a greater number of foreign clients to luxury real estate.
Buyers will be offered luxury housing
Now we can say that, at least in part, the efforts of developers, realtors and the Association for the Promotion of Turkish Real Estate Abroad have been met with success. Elite real estate is increasingly in demand amongst foreign investors.
With the changed regulation of housing sales to foreigners, major market players are sure the luxury housing market will become even more active.
Back in 2018, at the time of the reduction of the figure for obtaining accelerated citizenship, 250 000 was a large sum. However, now this amount is no longer considered significant, but a more than reasonable amount for the purchase of residential real estate in key areas of megacities such as Istanbul and Izmir, as well as luxury resorts on the Aegean coast including Bodrum, Cesme, Urla, Fethiye, Kash and Kalkan.
In 2021, Turkish analysts conducted a study comparing the price index based on data from 50 megacities around the world. Among the 50 cities, Istanbul was in 45th place - that is, real estate of this class for the specified amount was much more affordable for a foreign investor than in 44 other cities from the list.
“After the minimum amount required to obtain citizenship under the accelerated procedure reaches $400 000, higher-level investors will come to Turkey,” Baki Budakoglu, Chairman of the Book Value Assessment Council (Denge Değerleme), is confident.
It's easy to track as such buyers are interested in branded luxury apartments or even luxury real estate.
“After increasing the number of investments required to obtain citizenship under the accelerated procedure, in the short term, the number of transactions with foreigners may decrease, this is true; but taking into account the total amount of transactions coming to the treasury of our country from these sales, this will allow the market to achieve the necessary balance. Perhaps, we will sell a little less housing, but at a higher price,” Mr. Budakoglu added.
The hopes are not unfounded. Even before the spring announcement of the rule change, the interested parties had already switched to expensive branded projects and in selected locations. In addition to the constant leader (Istanbul), it is often the Aegean coast which has become a “hit” during the two years of the pandemic.
There is a pronounced demand for projects of such well-known developers as Mesa, Tahincioğlu, Ağaoğlu and Ege Yapı companies. And to the popular Bodrum a surge of new projects was recorded, for example, Cesme, Urla and Dikili.
What is happening on the Aegean coast, the players in the construction market are now informally called the “resort race of country houses” (we are talking about residences intended for living mainly in the summer season).
The opening of the Gebze-Izmir highway also contributed to the relocation of demand, speeding up the route from Istanbul to the Aegean Sea and simplifying the possibilities of a “post-like” transition to a resort lifestyle with remote work - a lifestyle that has become extremely popular during the pandemic.
So, which projects and in which locations come to the fore outside of the largest Turkish metropolis?
Fethiye and Cesme
We have already told you that Tahincioğlu Holding decided on the first luxury class project on the territory of Gejek (the vicinity of Fethiye resort, Mugla province). It is Nidapark Göcek, a project for 32 villas with private pools and private terraces. The complex is planned to be built in two years.
The chairman of the Management Board of the company, Ozjan Takhinjioglu, clarified that before signing the documents on the start of the project, they had been closely studying the market for several years. And in 2022, new projects will be launched on the territory of Bodrum.
International hotel operators also do not want to miss the opportunity - the luxury apartment complex Swissôtel Residences Çeşme under the umbrella of the famous Swiss hotel brand will also appear in Cesme (Izmir) very soon.
Cesme is becoming one of the informal "investment centers" of Turkey very quickly.
Bodrum and the surrounding area
Migration from major cities, especially Istanbul, to summer resorts has led developers to announce branded projects one after another in the Aegean Sea areas: Ege Yapı, Özak GYO and others.
Ant Yapı, Ağaoğlu, Nef and Seba Inşaat continue to work in Bodrum and its surroundings, nevertheless, Bodrum continues to be the most popular resort.
Preference is given to detached or low-rise houses of the townhouse type and similar, with their own gardens and, if possible, their own swimming pools for each residence (even if small), along with extensive social zones for sports and entertainment.
«On trend» and the maximum distance from the city noise and din, it's not cheap.
Astaş Gayrimenkul belongs to a number of companies that have focused their efforts on Bodrum. Vedat Ashchi, Chairman of the Board of Astaş Gayrimenkul - the very company that "brought" the world–famous Mandarin Oriental hotel brand to Turkey - opened the first luxury hotel under the Mandarin sign in Bodrum called Mandarin Oriental Bodrum (the second in a row is Mandarin Oriental Bosphorus, which was opened later, in Istanbul, in August 2021). Now the developer is implementing the Blue Arya project in Bodrum (Turgutreis village) in partnership with Aslan Yapı.
The Ashchi leader clarifies that the location is interesting because it is located in a Turgutreis, suitable and convenient for a comfortable life for families year-round. Therefore, it makes sense to invest in this area.
Bodrum, in this sense, is generally out of competition. Hundreds of private planes arrive in the summer and the marinas are crowded. World brands, luxury restaurants and foreign hotel chains consider Bodrum as an extremely significant destination for themselves. We predicted that Bodrum would become an alternative to Saint-Tropez; and so, it happened.
The first stage of Blue Arya is planned to be commissioned in May 2023, the second is in 2024. The residences will have a magnificent view of the islands like Yası ada, Çatal Ada and Kos Adası.
Ant Yapı has commissioned the first phase of the Anthaven project in Aspat Bay near Bodrum and work is already underway on the second phase. 300 residences are planned here. If the work goes according to plan, the second phase will also be completed in 2023, said Mehmet Okai, Chairman of the Management Board of Ant Yapı. Anthaven will also become an elite complex suitable for year-round living. Residents will be able to enjoy all four seasons of this magnificent region, distinguished by its amazing natural beauty.
Another group holding the Bodrum resort as a favorite is Besa. Besa Board member Efe Besci reports that the work on the first stages of the BO Viera project has been successfully completed. Moreover, BO Viera is able to become another pearl of this region, decorating Bodrum.
The project, with a total area of 150 hectares, includes 315 villas and residences which enjoy sea views and fantastic local sunsets along with the brand of the upper segment of the Hilton group consisting of 85 rooms.
BO Viera, obviously, will be one of the brightest projects in the portfolio of Besa, a company with a 50-year history.
Özak GYO, the creator of the residential projects Büyükyalı and Özak Göktürk, is not far behind.. Chairman of the Board of Özak GIO Ahmet Akbalyk said that a hotel is planned to be built on land recently purchased in Akyalar (Bodrum). Zak GIO is also interested in other locations - the resorts of the Aegean region and the surroundings of Izmir. In particular, Özak GYO is negotiating about three territories already chosen by the developer, with an eye to integrating nature with daily living, also on the Aegean coast.
The focus on year-round directions is also held by Neff: Chairman of the Board of Nef Erden Timur spoke about the launch of a new project in Bodrum (Gelkey). The second project is about to start in Izmir (Urla). In parallel, the construction of prestigious complexes or villas continues in Sapanja, Konya, Sakarya, Canakkale, Balikesir and Hirfanli, as well as in Ankara. Nevertheless, Nef is actively developing land plots in the settlements of the Marmara and Aegean regions.
Izmir
In recent years, Izmir and its summer resorts have come to the fore among developers. In addition to Nef and Özak GYO, other developers are also active here.
Urla is also gaining popularity. This region was previously known for gastronomic tourism. Moreover, it is developed in a variety of areas from education to health care and other social aspects, which increases immigration and investment interest in the area.
Ege Yapı is working on one of its projects in Dikili (Izmir) and some other projects nearby. Thus, Ege Yapı has already started the implementation of the project of a whole complex of villas in Kekliktepe (Urla), and another project in Alsancak.
The Chairman of the Board of Ege Yapı Inanch Kabadayy clarified: “We focused on the concept of ecotourism. Mesa Urla Kekliktepe is designed in such a way that you can live here all year round, enjoy all the delights of the summer season and a permanent stay at sea, and, so to speak, merging with nature, which came to the fore in terms of importance in a pandemic.”
A boutique project with 68 villas spread over an area of almost 70 hectares among olive groves has already gone on sale. Ege Yapı is also looking at other sites along the coastline, both in the vicinity of Izmir and in the province of Mugla.
Milas
A very interesting project will also appear here: the Mugla-Milas Tourist Campus, located near the Milas-Bodrum Airport. All the principles of sustainable development will be implemented here (which is still rare in Turkey). The campus is the “brainchild” of AĞAOĞLU Holding. Burak Kutlug, director of the holding, said that the campus will be created using the best eco-technologies - even for drinking water, sea water will be purified by a special method, lawn care and other vegetation is planned by irrigation with a liquid obtained from thoroughly treated wastewater.
The area of the campus itself will occupy no more than 10% of the territory, and 90% will be occupied by green spaces. Territories for “smart” agricultural lands are also planned - both guests of the campus and the surrounding residents will be able to work on them at will. Very interesting eco-zones with carefully designed landscaping, sports and playgrounds, and even a “cultural territory” is planned at the campus.
So, investors focused on luxury, branded and eco-projects in Turkey have quite a wide choice.