Buying a new home in Turkey in 2020: eight global reasons to invest

Buying a new home in Turkey in 2020: eight global reasons to invest

The coronavirus pandemic has added investment attractiveness to Turkish real estate. The excellent quality of construction and the dynamic rise in apartment prices are not the only reasons that make foreigners invest in real estate in Turkey. Turkey's transport accessibility has also become an important point for European countries and countries like Russia. Many foreigners had to check for themselves: if flights are canceled, you can get to your apartment in Turkey not only by sea, but also by land. Besides, investors believe that self-isolation is much easier and safer as Turkey's government and healthcare system managed to take timely and effective measures to combat the pandemic. Why is a new home in Turkey considered as a safe and profitable investment? Eight global reasons to invest in Turkey - on Turk.Estate.

Reason 1: dynamic rise in apartment prices in Turkey

A proven way to quickly increase capital is to invest in housing under construction. It takes a year and a half to two years from the foundation pit to the commission of a finished project in Turkey: during this time, the prices for apartments can be increased in price by the developer by about 25-30 percent. Buying an apartment or a villa at the initial stage of construction, two years later the investor receives a ready-to-move-in property in a modern residential development built according to European standards. You can rent out your new apartment in Turkey straight after it is completed or resell it for at least 20 percent more than the original cost. You should also keep in mind that finished apartments in Turkey rise in price annually much faster than in Germany and other 53 developed countries of the world: the official annual growth rate of property prices in 2019 reached 15 percent, in the first half of the year 2020 - 14.4 percent.

Reason 2: Turkish economy is in need of foreign capital

The forecast for Turkey for 2020 said that it would enter the TOP-10 countries with the fastest growing economies. The coronavirus pandemic ruined the forecasts, hitting the economies of all countries of the world, including Turkey. However, immediately after the quarantine restrictions were lifted, the Turkish authorities launched a mortgage campaign designed to support not only the construction and real estate sector, but the entire Turkish economy. By August 2020 (i.e. in two months), the total volume of mortgage lending in Turkey reached 261 billion 763 million lira. The construction and real estate sector has revived, along the way helping to minimize the impact of the pandemic on hundreds of other sectors of the Turkish economy with which it is directly or indirectly connected. With the help of the mortgage campaign, the Turkish authorities managed to get a considerable part of citizens' savings and pour them into the economy, however the national currency continues to fall. Therefore, in 2020, Turkey is especially interested in attracting foreign capital. And foreign property investors can count on the most profitable offers today.

Reason 3: Turkey offers flexible investment conditions

Modern Turkish legislation maintains the most friendly investment climate for foreigners, and the system of regulating foreign capital in Turkey is considered one of the most liberal today. Foreign investors can take advantage of mortgages in Turkey without problems and delays, foreign companies can receive full support from the state, which adheres to the principle of equality of foreign and national capital. What do foreigners invest in Turkey most often? The five priority areas are the tourism industry, the construction sector, real estate, industrial businesses and science. Investments in new housing in Turkey do not require special knowledge, training and experience, therefore, they attract more and more foreigners who just want to secure their capital.

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Reason 4: Turkey's great climate and location

By investing in Turkish real estate, foreigners get a holiday house by the seaside in a country with a fantastic mild climate and a healthy environment. Turkey's unique location - between the East and the West - is another advantage. Long-term, stable business relations connect Turkey with most of the countries of the Middle East, Europe and Africa. This fact makes it attractive for far-sighted investors not only from nearby countries, but also from the USA, China, Latin America, Australia, New Zealand. And many foreigners choose new or under construction apartments in Turkey as the best investment option.

Reason 5: Turkey spends huge budgets on the development of the tourism industry and healthcare system

In 2019 (when the growth of world tourism showed the lowest rates in four years), Turkey welcomed more than 52 million foreign travelers and took the sixth place in the ranking of the most visited countries in the world. The annual growth of tourist flow to Turkey in 2019 was 14 percent, and the annual tourism income reached $ 34.5 billion (17 percent more than a year earlier).

The pandemic and related restrictions have hit Turkey's tourism industry hard. However, now, in the middle of 2020, with the opening of air links with over 50 countries, Turkish resorts are already receiving the maximum number of guests, and the foreign tourist flow is doubling daily. Every week, hundreds of hotels on the Anatolian and Aegean coasts undergo "safety certification", ready to receive guests and comply with the latest hygiene and safety rules. Moreover, the country's main hoteliers are talking about extending the tourist season in Turkey until the end of December 2020.

What does Turkey offer besides beach holidays? Travelers from different countries are offered cultural, gastronomic, ski, eco tours and cruises, as well as reasonably priced medical tours to the newest, ultra-modern clinics. Turkey is rapidly developing a publicly available sports and fitness infrastructure, attracting professional athletes (to training camps and international competitions) and healthy lifestyle enthusiasts (to recreation and thematic tours and retreats). Facilities designed for the elderly are also developing very fast in Turkey. This (along with the record rapid development of medicine) attracts pensioners from Germany, Norway, Finland, Ireland and other countries. Turkey is becoming an increasingly popular destination for Europeans. They are actively buying real estate in Turkish resorts and big cities. Residents of Arab and Middle Eastern countries are investing even more actively in new apartments. Following the growth in demand, many construction companies in Turkey are implementing projects entirely aimed at European or Arab buyers that meet the highest European standards or Islamic halal requirements.

Numerous tourists, who visit Turkey all year round, become a regular source of income for those who invest in a new apartment in Turkey in order to make money on rent. Due to the threat of coronavirus in 2020, many holidaymakers (both foreigners and Turkish residents), prefer to rent an apartment or a villa by the sea rather than stay in a hotel. Therefore, there has been a sharp increase in demand (and prices as well) for rental real estate (especially villas and houses in the countryside). It is expected that the demand for apartments for rent in Turkey will remain high through the whole year (in the low season due to medical tourists who already book apartments in advance). New apartments are in the greatest demand among tenants in Turkey in 2020, so it is most promising to invest in them.

Reason six: cities in Turkey are becoming more comfortable for life

Turkey's urban environment has undergone major transformations over the past two decades. Excellent roads and bridges have appeared, residential neighborhoods with parks and smaller green areas, sports and playgrounds, facilities for family leasure activities have been developed. Every year, "public gardens" are opened throughout Turkey. These gardens are vast forest park areas with landscape design, forest areas, walking and cycling paths, concert and exhibition halls, with gazebos and barbecues, children's and sports grounds. In 2018, the President of Turkey promised to turn it into a "country of gardens and parks", and in 2020 he noted that Turkey year after year and step by step is approaching its goal - to turn 81 million square meters of space into a landscape park by 2023 in each Turkey's province (81 provinces in total). Now "public gardens" have already been developed in 23 Turkish provinces.

Recep Erdogan: "We will create public gardens in every Turkish city. Billions of trees have been planted in the country and we will continue to move in this direction. When we came to power, we saw that our cities needed much larger, much more modern recreation areas. Public gardens are projects that we have designed in response to this public demand. In the new forest-park zones, city dwellers will be able to enjoy fresh air, cycle and rest from the hustle and bustle of big cities in the woodlands."

Erdogan also added that over the past 18 years, from 500,000 to 1 million new housing units have been built in Turkey every year. Turkey has reached a high standard of living, so it is not surprising that foreigners from Europe, the Middle East and other countries are choosing it for relocation and investing in real estate.

Reason 7: Turkey offers great housing prices

Not only wealthy people can afford to buy a new or an apartment under construction in one of the resort towns of Turkey (where real estate brings regular rental income). The real estate market in Turkey is available to investors with any budget, and the construction sector offers a wide range of properties in different price categories. The minimum cost of a new luxury apartment within walking distance from the sea and beaches starts from €40,000 (1+1 apartments). A new 1+1 apartment of "comfort" class (in a simple apartment building without additional facilities) is available at the price from €32-35,000.

Of course, you should take into account that apartments of different categories will bring different rental income. Luxury apartments and villas from the middle and upper price segment in residential complexes with the infrastructure of a five-star hotel are rented most actively and most expensively (and pay off faster). As for a budget apartment, it will be easier to find a tenant for a long-term rent. Speaking about the lower threshold of prices for a profitable investment, experts in the Turkish real estate market mention €50,000. You can purchase a guaranteed liquid property at this price.

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Reason 8: profitable investment and property management options in Turkey work

You can choose different investment options in Turkey (depending on the budget and long-term goals). So, for example, one of the most popular investment options is buying a new apartment in Turkey and rent it out to tourists. The homeowner receives passive rental income from the apartment, while the apartment itself rises in price by 15 percent per year. The homeowner does not need to care about anything: the management company is responsible for maintenance of the project and your property, while a licensed real estate agency will handle the lease.

How much can you earn from renting a property in Turkey? The rental price directly depends on the location of the apartment and the complex, the characteristics of the housing and on the method of managing the residential complex. Average budget apartment can generate income from 3 to 8 percent per annum, luxury apartments - from 10 to 15 percent. Luxury, premium properties managed by experienced, professional companies can generate up to 20 percent of rental income.

Another common option for investing in Turkish housing is buying an apartment under construction to resell it after the completion of construction (immediately, or after 2-3 years, when new apartments in Turkey will rise in price by 30-40 percent). Income from property resale in Turkey can be as high as 200 percent!

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