Another trend caused by the pandemic - which, with all its inconveniences and limitations, has opened up a number of new favorable opportunities for investors - is the purchase of land plots.
People strive for an isolated comfortable life (including foreign investors), they want to acquire their own “nest”: both spacious and cozy. However, the range of detached houses is now quite limited: for example, in Istanbul, “view” mansions for sale can no longer be found, not to mention high prices. The same is for rent, however, as well. Moreover, there are almost no land plots left on the shores of the Bosphorus. And in general, land plots have been sold out cleanly in some areas in this megalopolis.
Therefore, people increasingly prefer to build such housing themselves, and they began to refuse to buy ordinary apartments.
CONTENT:
- TRADE ON BOTH EXPENSIVE AND CHEAP LAND
- WHAT AREAS ARE IN DEMAND?
- FAST INCREASIN GPRICE MANSIONS AND LOCATION FOR THEM
- SALE OF PLOTS FROM AUTHORITIES
- PREFABRICATED HOMES GAINING POPULARITY
- HOW TO CALCULATE PERMISSABLE AREA OF A FUTURE HOUSE?
- IS IT BETTER TO BUY A HOUSE OR TO BUILD ONE?
What's the way out? It is and land purchase, which can manage as you like:
- build a separate house;
- build several townhouses within the “boundaries” of one or two buildings - live in one, rent out the rest. For example, on July holidays, the price for villas reached 20,000 TL per day or more;
- make one villa for yourself and several small “summer houses - to rent them out to tourists and not only, or for sale;
- to implement a project of a boutique hotel or service apartments;
- build office space or, a little later, when a particular city expands, resell this site for offices or warehouses (for example, offices in Istanbul are currently being actively built; it is expected that in the next three years the total supply of office space in the megalopolis will be about 3.8 million sq. m. - exactly this demand is predicted. And just now, for example, the municipality of Başakşehir is offering a land plot for offices for 105 million TL).
Moreover, the above are not all possible options.
We have already talked about several versions of the use of sites, which are now gaining popularity. The purchase of land for “family sieve” is among them. In resort areas, judging by the ads on specialized Turkish real estate sites, every now and then you can “catch” a profitable plot on the coast: for example, half or a third of a small island, etc. Building your own house seems troublesome, but in fact there are more and more options every day - in particular, buying land and quickly assembling a ready-made standard “factory” house there (will discuss it in more detail a little later, in the same article).
TRADE ON BOTH EXPENSIVE AND CHEAP LAND
The number of people who prefer an isolated life due to the coronavirus epidemic is increasing day by day. Following the demand, the prices for land also increased; and in some places - almost twice in a very short period of time.
Uğur Fer, commercial real estate expert at Tam Nokta Neo Turyap, said that land prices are especially rising, in particular, in the popular province of Antalya. Thus, for example, the unit price for land in the area of Döshemealty, the villages of Nebiler and Duadzhy, which not so long ago amounted to 400-600 TL per 1 square meter, following the results of an incomplete one and a half years of the pandemic, increased to 900-1250 TL. This is precisely because of the shift in investment demand from apartments to private houses. “To meet this demand, - said Mr. Fehr, - construction companies began to actively buy land for projects with individual buildings”.
At the same time, according to the expert, taking into account the adjustment of zoning in the province of Antalya, the consideration of applications for new permits by the authorities, etc., land plots for individual development have almost tripled here somewhere: from 400-1000 TL before the pandemic - to 1800 -2500 TL by July 2021.
Well, some of the investors may well “play” on the fact that the pandemic has brought down the hotel market: the cost of land with the designated purpose “for hotels” has decreased. In Kemer, Tekirov, Kiriş, Çamyuva, Avsallar, Konaklı, Alanya, Gazipaşa and some other areas, the plots where it was planned to build accommodation facilities are already being sold at a price of about 800 TL per 1 sq. m.
WHAT AREAS ARE IN DEMAND?
We have already mentioned about “family sieves”, which are being built from scratch on purchased land plots and have become extremely popular literally over the past year especially in Istanbul: a new trend has been noted in many areas of the metropolis, from Beykoz and Sariyer to the vast areas of Çekmeköy and Pendik. The essence of this trend is family plots, where several separate villas are being built. This “fashion” has replaced the so-called “family” apartments - spacious, occupied floors or townhouses. If earlier each family occupied, say, part of a floor in a duplex, now representatives of different generations live in separate houses, using the common infrastructure: terraces to relax and make barbecue, a lawn, a garden, a sports ground, a swimming pool, etc. “Family Sieves” is located in a green area, surrounded by dense vegetation and is a kind of oasis - despite the fact that it is geographically close to the center.
This format is especially in demand among wealthy families; and the main problem in Istanbul now is to find a suitable plot, preferably with a beautiful view, ideally on the Bosphorus. And there are practically no such ones left on sale. Experts say that such land plots have now received the name “new gold”.
Such plots and such newly built sieves are popular, including among wealthy local youth who do not want to leave the city under any circumstances; but it also strives for comfort and isolation in the same way. Thus, if earlier the Turks preferred to live permanently on the Asian side of the metropolis, now the demand for the Etiler / Ulus, Bebek and Akatlar regions in the European part, near Beşiktaş, is growing.
Those who can afford to engage in thoughtful construction of villas on the newly purchased land will benefit doubly. Developers clarify that now prices for so-called “decent” villas in Istanbul start at $ 5 million. And each additional building on the site - a guest house, or even just a convenient extension - immediately increases its cost.
Let us recall that there is an explosive demand for rental villas at the resorts, especially on the Mediterranean and Aegean coasts. Seasonal rent has doubled. In the same Yalikavak (Bodrum), many laughed at tenants who had booked houses in advance and agreed to pay 40,000 lira a month; now they are practically envied - now in Yalikavak it is impossible to find a monthly rental of villas for less than 100 thousand TL. But buying land in the vicinity of Bodrum is quite possible.
Both whole islands and their fragments are sold; as well as attractive land plots in prestigious resort areas. For example, here is a very fresh proposal - three plots in Alaçatı (a new “favorite” among the resort villages - Çeşme, near Izmir): one - for 538 sq. m and second - for 541 sq. m. The price starts at about 12 million TL, put up for sale by the local municipality.
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FAST INCREASIN GPRICE MANSIONS AND LOCATION FOR THEM
The issue of buying private residences for their own needs, taking into account the adjustment in consumer demand for a year and a half of the pandemic, is raised especially often. There is also a reflection of the constant demand for land as “a place for your own home”. Real estate analysts report that house prices in Turkey have risen more than 60% and land prices have risen more than 35% over the past year. The search for plots where you can build your house is especially active in Istanbul and surrounding provinces, as well as in the coastal regions, especially on the Aegean coast. In the above-mentioned areas, the growth in prices is even higher than the average for the year, and experts believe that this trend will continue for quite a long time: after all, the “white collars” who have accumulated some financial cushion, top and even middle managers have rebuilt their lives in such a way as to leave megacities with the ability to work remotely, constantly being in quieter areas. And even those who do not have impressive amounts of money are still looking for at least small plots where you can build a house for yourself and your family with at least a few rooms.
Real estate portal Endeksa.com presented the following data: detached houses increased in price by 64.43% on average in Turkey. The average selling price of 1 square meter of a mansion was 5 801 TL, the average price of a house is 1 116 200 TL, the approximate payback period is 31 years.
- Muğla is a leader from the resort regions: over the past year, mansions in this province have risen in price by 64.53%, the average price per square meter there exceeded 11 thousand TL, and the average price per house increased to 1 959 246 TL; approximate payback period is 35 years.
- In Antalya, as another mega-popular both among tourists and local residents of the province, the rise in prices for mansions is even greater: 70.71%. 1 square meter will cost 5910 TL, the average price of a house is 1,347,480 TL, and the investment can be returned in about 32 years.
But not all buyers have mentioned millions; therefore, someone looks after exactly the land in the districts they like, and then begins to select a project and search for a developer who will help to realize their dream in order to build a house either for personal use or for sale - by selling and buying a larger plot, and building more houses.
Thus, the purchase of land from a secondary category of real estate is turning into one of the most demanded. Assessing the figures provided by the statistics, the founding partner and CEO of Endeksa.com Görkem Öğüt emphasized that given the fact that the “stock” of detached houses is suitable for the “new realities” - spacious, with large balconies, a private garden, a terrace, a swimming pool and etc. - there are less and less on sale: they are being bought up. Experienced real estate consultants struggle to find and offer clients enough choice - and this is when the cost of housing is high. “Even if prices drop slightly with the end of the pandemic, this decline will not be large due to the increased spending on the construction itself,” he said.
Therefore, Mr. Öğüt emphasized, there is a growing tendency to unite for joint purchase of land plots with relatives and even with friends in order to share the costs in equal shares, organize “own” sites (residential complexes), building several houses, and thus get the opportunity to live in isolation, keeping within less than buying a “species” mansion: “As a result, land prices have also increased. With regard to commercial real estate, we are seeing a shift in demand from large areas to smaller offices. Despite the fact that the effects of the pandemic are subsiding, many “remote workers” said they plan to make their telecommuting permanent. Thus, the demand for both detached houses and land for them will remain at least in the near future.”
SALE OF PLOTS FROM AUTHORITIES
In fact, land is offered not only by owners: it is regularly sold by state or structures close to state - ministries, municipalities, etc. Thus, on 6 July 2021, an auction was held in Ankara to sell 187 land plots in 9 provinces at once. The Seller is Department of Mass Housing of the Ministry of Environment and Urbanization (Çevre ve Şehircilik Bakanlığı Toplu Konut İdaresi Başkanlığı –TOKİ).
Buyers had the opportunity to purchase plots for housing and commercial properties, with an initial payment of 25% and in installments for 5 years (60 months). Almost two hundred plots were offered to everyone in Adana, Aksaray, Ankara, Antalya, Aydin, Elâzığ, Istanbul, Izmir and Usak, with a total area of 589,171 sq. m.
Just two days later, on 8 July, 144 more vacant lots in 16 provinces were looking for new owners. The Ministry of Environment and Urbanization put them up for sale; the proceeds will go towards the urban transformation program. According to the data provided by the Ministry, we are talking about 26 sites in the districts of Çankaya, Gölbaşı, Yenimahalle, Kahramankazan, two in the districts of Zeytinburnu and Beyoğlu in Istanbul; dozens - in the districts of Torbala, Bayindir, Buca, Gaziemir and Shirmesh in Izmir. Didim is also offered; five sites - on the territory of Muğla province; four - in Mersin, and others. The intended purpose of most of the plots is for the construction of apartments and houses, and they are located precisely in residential areas.
PREFABRICATED HOMES GAINING POPULARITY
In Turkey, sales of prefabricated homes have skyrocketed under a new government subsidized housing program. In particular, the authorities are ready to compensate buyers for up to 40,000 TL who wish to build the one. This is due to the implementation of the resettlement program from dilapidated housing; the authorities are ready to offer options for those who are unable to repair it on their own: moving to a new house as well.
It is true, to receive this subsidy, you need to be the owner of the site or a share in it and have Turkish citizenship; however, many foreigners already have it, or are at the stage of obtaining it.
Be that as it may, even non-citizens – it is much faster, easier and more convenient even for ordinary buyers to buy and order the assembly of a ready-made house choosing from proposed options.
Not to mention the fact that they are much cheaper: the area of such buildings starts from only 45 sq. m. The used material also affects the price: the higher its quality, the higher the price. The cost of typical prefabricated houses is from 30 to 500 thousand TL. By the way, even prefabricated houses from the second-hand category are in use.
HOW TO CALCULATE PERMISSABLE AREA OF A FUTURE HOUSE?
One of the main questions that worries investors planning to purchase land is how large the facility can be built. After all, now many are trying to buy a plot in order to build not one mansion there but several ones.
With this question, contact the consultants, but the simplest calculation is the coefficient indicated in the documents (for example, 1.25: realtors will tell you exactly what figure you need to pay attention to). That is, if you have a land plot with an area of 1000 sq. m., and the coefficient is 1.25, then: 1000 sq. m. x 1.25 = 1250 sq. m. Thus, the total area of the building should be no more than 1250 square meters.
IS IT BETTER TO BUY A HOUSE OR TO BUILD ONE?
It is clear that construction can be long and troublesome - if you do not take into account the above option with prefabricated factory houses. However, there is also a key argument in buying a land plot “for a house”: buying a land plot and building a house there is always cheaper.
Basically, you can get a building + land for a third of what you would pay for a finished and fully equipped villa of the same size in the same area. And this is a great option to acquire a home that you really dreamed of, and in exactly the option that you would like to see, with all the nuances.
But be sure to pay attention to two points:
- Construction Materials. Here, too, one cannot do without consulting reliable specialists; you will also need a whole study of what kind of choice to make, taking into account the requirements for insulation, seismic resistance, weather conditions, etc., considering location and specifics of this particular piece of land.
- Zoning. Find out in detail how the purchased plot will “behave” in certain climatic conditions. Study the structure of the earth, the “wind rose”; inquire about the possibility of flooding, waterlogging and other similar situations; collect the most complete data on insolation (hours of sunlight, angle of illumination, etc.) for each month of the year.
For more detailed advice on the purchase of land in Turkey and the construction of housing there, contact TurkEstate.
