The Princes' Islands in Turkey: demand exceeds supply

The Princes' Islands in Turkey: demand exceeds supply

Adalar (Turkish), or the Princes' Islands, is a district in Istanbul. This area has always been popular but has grown even more during the 2 years of the pandemic. Tourists poured in and wealthy citizens were looking for an opportunity to buy a villa in the Princes' Islands. After all, a beach holiday, silence, peace and solitude just half an hour from Istanbul is usually expensive.

Now, housing demand in the metropolis - to rent and buy - is exceeding the available supply. This was another reason why people burst onto the islands. Potential buyers are worried about even long-term rental options there which never really used to be in demand.

There was a point of almost no free housing on the Princes' Islands.

What are things like now?

The Princes Islands: Where is it?

The Princes' Islands, or Adalar, are a group of 9 islands in the Marmara Sea near Istanbul. Only 5 of the 9 large and small islands are inhabited. They attract tourists with their old buildings, busy streets in summer and cozy deserted walkways in winter.

There are settlements on Buyukada, Heybeliada, Burgazada, Kinaliada and Sedefadasi islands. But there are no permanent residents on Sivriada, Yassiada, and Tavsan Adasi. Usually, more than 12,000 people live on Adalar.

You can get to the Princes' Islands by public transport (ferries) for mere pennies. You can order a "water taxi", and a private boat or yacht. Ferries run from the early morning until late evening, and between different Istanbul piers, both on the Asian and European sides. Tourists and locals can come to the Princes' Islands for a week, a month, or just as part of a day trip to swim on a cozy beach, walk around the island, have dinner at a local restaurant, and see plenty of sights. Russian visitors will be interested in visiting the Leon Trotsky House, where Trotsky spent 4 years with his wife and son after being expelled from the USSR by Stalin in February 1929.

Rental rates: aspiration and reality

Istanbul's Adalar district, known for its close distance to the city, has become a favorite haven for those who want to self-isolate with comfort but still prefer staying close to the metropolis for work. Considering the general situation, the sharp growth in rental and sale prices of residential real estate has also affected this location.

Janer Jeyhun Ajarer, a real estate consultant, says that he receives more than 70 calls a day with requests to rent apartments on the islands. Buyukada is the main and often most attractive island since the governor’s office of the Adalar district and the Palace of Justice are here. Also, there are many bank branches in Buyukada.

The expert confirms that interest in the island grew almost immediately after the pandemic began. This is especially true for remote employees and IT specialists: “Everyone who wanted to sit the troubled period out away from the crowd flocked here.” But, since the islands are a private protected area and closed for development, the demand for rental and buying of property doesn’t match the number of residency requests.

So, one couldn’t even dream of the desired rates of 3000-3500 Turkish liras (TL) a month. Especially on the Princes' Islands and in other Turkish resort areas, there’s the concept of "summer" or seasonal housing rental for several months from the beginning of June to the end of September that’s quite expensive. The pandemic hasn't changed this.

The expert explains that seasonal rent can start at 20,000 TL and go up to 50,000 TL in comfortable residences. The price depends on the location, finishing, and "filling" of the house - if there’s a pool, etc. Also, these aren’t always individual houses! There are many requirements for apartments: “Now, some landlords ask for even 60-70,000 TL but this, of course, is unrealistic.” The average seasonal rent for an apartment is between 30-40,000 TL in the Princes' Islands. Monthly rental payment is 4,000-6,000 TL. Some homeowners ask for 7,000 TL a month or more but the number of people interested in these offers drops sharply at this threshold.

Just a couple of years ago, renting flats or apartments in the Princes' Islands was around 3,000-3,500 TL a month on a long-term rental agreement with annual renewal and a minimum official markup.

Today, this is complicated by the fact that many potential tenants want to live in an apartment for several weeks before deciding and signing a contract. But in the current circumstances, when demand noticeably exceeds supply, this isn’t profitable for owners.

As for separate houses, seasonal (this lasts for 6 months on the Princes' Islands) rent starts at 45,000 TL and goes up to 150,000 TL. At the same time, according to real estate agents, potential tenants have been lining up for the last year or 2. This is even though properties were easily rented out mostly in the summer and it was difficult to do this in the winter before the pandemic.

Cansel Turgut Yazici, the general director of Eva Gayrimenkul Değerleme (the real estate appraisal consultancy), talks about similar prices; with the “help” of the pandemic, when apartments with balconies or preferably individual houses were popular, the Princes’ Islands immediately turned out to be popular. From March to December 2020, rental prices rose by almost 50% here. The cost per square meter increased from 20 TL in March to 27-30 TL in December 2020, and 35-50 TL by the summer of 2021. Generally, the growth rate is 1.5-2.5 times higher for less than 1.5 years.

The beginning of the pandemic: “from hand to hand”

Now there are offers of apartments for sale at 700,000 to 1,500,000 TL. These are often residences with 3 bedrooms and 1 living room (3 + 1): “Of course, other homeowners try to sell their apartments at inflated prices but in most cases, 2,000,000 TL and higher turn out to be just an advertising price. Buyers have no interest in apartments with small areas.” According to Janer Jeyhun Adjarer, the price scale of the Adalar district is about the same level as the Maltepe and Kartal districts. 

Along with comments about the islands’ real estate market over the past 2 years, the expert shares other observations that almost 50% of properties in the Adalar region changed hands at the beginning of the pandemic. Those who bought a home before the end of 2019 saw that prices began to rise rapidly and they decided to take the opportunity to earn an extra profit. “2020 has been the year of the highest sales and the biggest real estate bubble in the islands.”

So, for those looking for housing in the Adalar area, realtors recommend being patient and waiting to review the change in the market for at least a few months. This is because there were cases when investors bought tiny apartments of 40 square meters for 3,000,000 TL, overpaying heavily and unreasonably.

Buyukada, Heybeliada, Burgazada islands: buy and rent

Even though there’s great interest from investors, it’s quite difficult to buy anything on the islands. There aren’t any new buildings because it’s a protected area. Available housing is almost sold out. The rare exceptions happen only when someone decides to get rid of their property. In particular, on Heybeliada island, there have been no apartments or houses for sale for a long time.

Ismail Baysal, the owner of Buyukada Gökhan Emlak company, was born on Buyukada island. He is a long-time real estate agent in the region and claims that prices for renting and selling houses in Buyukada have risen by 40-50% compared to the previous year. Prices vary depending on the location and characteristics of the unit. According to Baysal, "... the island has finally gained long-deserved position and value."

According to the expert, privacy is the key advantage of living here. It’s especially convenient for remote workers. In combination with the natural environment, it promises a paradise for creative people like writers, poets, and artists. The second obvious advantage is that it’s easy to get to Istanbul and different districts from here. Ferries and boats leave every hour or even more often.

Most people who come here in the summer for the whole season or for shorter vacations have a very high income.

On the island, there aren’t usually discounts since all the houses are old buildings. The cost of residences for sale starts at 1,750,000 to 2,000,000 TL. But keep an eye on the volatility of exchange rates, the expert said.

Rental costs for 3 + 1 and 4 + 1 (with 3 or 4 bedrooms) residences with access to a pool can start at 70,000 TL for 4 months. But this can go up to 150,000 TL.

The standard average rent ranges from 6,000 to 10,000-15,000 TL a month for a 2+1 apartment.

Only about 100-150 residences are sold on the inhabited islands each year. They are pretty costly even though some buildings are noticeably dilapidated. Ismail Baysal believes that the authorities should encourage owners, both current ones and soon-to-be, on the Princes' Islands to restore these cultural monuments.

Now, there’s no housing for sale at all on the island of Heybeliada. Bülent Durmusoglu, Heybeliada Durmuşoğlu İnşaat Emlak company’s partner, said that their company doesn’t offer properties for purchase and there are only 2 residences for rent. In theory, in the past, real estate sale prices were from 1,000,000 to 2,000,000 TL here.

But the rent in Heybeliada is more affordable than on the Buyukada island. A 2 + 1 home will cost about 45,000 TL for 6 months (full season) at current prices. Also, you can make reasonable adjustments based on the location.

“Buyukada is more of a tourist location with intensive trade, while Heybeliada is for a relaxing holiday for people with medium or high incomes,” experts said. According to available statistics, Heybeliada is chosen by those who live most of the time in the Istanbul districts of Kadikoy and Bostanci. Durmusoglu also notes that top executives of large firms prefer to settle for longer on the island of Heybeliada.

Burgazada remains popular as a summer resort destination. If in Buyukada you can satisfy all your social and living needs (banks, restaurants, shops, etc.), and in Heybeliada you can enjoy year-round peace and solitude, then Burgazada is a holiday island. Those who want to spend a few months in summer houses come here.

The Princes' Islands compared to other areas

Adalar is not the only place where prices have notably risen since the start of the pandemic. There are other locations where you can find residences in low-rise complexes, townhouses, or even separate houses with gardens that are isolated from the hustle and bustle of the metropolis. Volkan Gurleyen, an Istanbul real estate and investment consultant, said that among the preferred areas with individual real estate are Sile, Riva, Catalca, Silivri (separate properties), as well as areas with spacious and comfortable social green areas like Basaksehir, Beylikduzu, Kagithane, Atasehir and Kartal. Again, with the growing price in Kartal, the Princes' Islands are quite comparable in terms of house prices.

Should you buy a property in the Princes' Islands in 2022?

Real estate agents believe that if you really like a residence, then you should buy it for yourself. If you’re looking for a buy-to-invest purchase for future profit, it’s better to look at other areas in the Istanbul province this year. First, you should pay attention to developing districts like residential complexes around the Istanbul Canal under construction. The canal is included in the list of Turkish infrastructure projects, with the help of which, nearby properties have become more expensive. Recently, the new Arnavutköy residential complex was launched here with 644 residences (plus social and commercial infrastructure), and investors immediately were very interested in it.

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