Real Estate Sales in Turkey: Dynamics Over the Year

How is the market of real estate in Turkey emerging from the winter stagnation into a “thaw”?

According to Endeksa, a real estate valuation portal whose data is considered highly accurate, the annual increase in housing sale prices across Turkey as of March 2024 is 57%. At the time of writing, the average sale price per 1 m² of residential property nationwide is 25,111 Turkish lira (TL) (USD 775). The average cost of a typical housing unit of 100–110 m² is TL 3.26 million (USD 100,750). Additionally, the average investment return period has pleasantly shortened for buyers: it is now 15 years, compared to approximately 17 years a year ago.

The volume of mortgage-based housing sales has significantly decreased over the past year: foreign buyers cannot access credit, and local residents are deterred by high bank interest rates and inflation. Consequently, by March, the share of mortgage transactions dropped to 12% per month of the total volume, with cash purchases taking priority.

Secondary housing is becoming more popular—demand exists not only for new construction. This situation was partly caused by winter stagnation, leading homeowners looking to sell to offer discounts. Sometimes these reached 10–15%, while developers selling apartments in new buildings were less accommodating since lowering prices would minimise their profits, and construction costs have significantly increased over the last 12 months.

As a result, the share of secondary market transactions, which has been steadily growing in recent months, reached 67% in March, with almost 71,000 contracts signed in this segment alone, which is a significant figure.

Regarding the most in-demand provinces, Istanbul understandably leads—both the city and the region as a major metropolis, financial, economic, and tourist centre, and thus the primary location for investments. While the average housing cost in Turkey in March was about TL 3.3 million (USD 102,000), in Istanbul it reached TL 4.4 million (USD 136,000), which is a third higher. The average sale price per 1 m² is TL 38,622 (USD 1,192). The increase in housing prices in Istanbul over the past 12 months is 56%.

The most expensive province turned out to be Muğla with its resorts, including elite Bodrum—TL 7.5 million (USD 230,982). The sale price per 1 m² is TL 57,126 (USD 1,763). Although housing in this province takes much longer to pay off due to its high cost, it is worth buying: Muğla—Bodrum, Fethiye, Marmaris, and other attractive coastal locations—will always be in demand.

İzmir is nearly on the same level as Istanbul, with the average apartment price reaching TL 4 million (USD 124,500), and the price per 1 m² of residential property is TL 32,526 (USD 1,004). The 12-month price increase also matches that of Istanbul at 56%.

In the capital province of Ankara, prices have risen sharply by 70% over the past year. The average unit price is TL 2.72 million (USD 83,967), and the price per 1 m² is TL 20,927 (USD 646).

The fastest-growing location in terms of cost turned out to be Hatay—one of the most affected provinces by last year’s earthquake. Also in the top three for this indicator are Ordu and Muğla. Housing prices in Hatay increased by 84% over 12 months, with the average sale price per 1 m² being TL 19,048 (USD 588), and the average unit cost as of March is TL 2.93 million (USD 90,540).

In Ordu, housing prices increased by 79%, with the average sale price per 1 m² reaching TL 21,624 (USD 667), and the average apartment price being TL 2.81 million (USD 86,766). As mentioned above, Muğla also experienced a price increase of 78%.

Görkem Öğüt, Co-Founder and CEO of Endeksa, assessed the housing demand as follows: “As of the end of March 2024, the annual increase in housing prices across Turkey averaged 57%, with a monthly increase of 2%. We can clearly see that the rate of price increase is slowing down: from the end of 2021 to mid-2022, we observed a monthly growth rate of 10%. However, it can be confidently stated that the primary reason for the slowdown in dynamics is the difficulty for the population to obtain loans.” Therefore, considering that banks are now regulating rates to attract potential borrowers, and the government is providing support in the form of so-called social housing available at minimal interest rates, it is not reasonable to expect property prices to stabilise at the current level. On the contrary, prices for construction materials are rising, and the overall housing supply is decreasing, so apartments and houses will still become more expensive, although possibly at a slower pace than in the last two years. Thus, Turk Estate’s conclusion remains the same: “It is better to buy now, before prices rise.”

Content:

• Key Conclusions:
• Where Is the Biggest Selection?
• Demand from Foreigners
• Dynamics for the Year:
• 2023
• Results for 2023
• 2024

Here are the precise figures for the number of transactions each month, as well as the dynamics of the cost per 1 m² of residential property over the past 12 months:

Key Conclusions:

• Housing prices show no signs of stopping their upward trend, despite various external factors.
• A significant external factor in October 2023 was the unexpected announcement of an increase in the minimum amount required for obtaining a residence permit through property ownership (with the possibility of applying for Turkish citizenship after five years of residence) from USD 75,000 to USD 200,000. This announcement was not only unexpected but also retroactive.
• This sudden change led to a drop in transactions in October and November 2023.
• December 2023 was “stellar” in terms of transaction volume, despite slightly lower figures compared to previous years. Firstly, investors were eager to buy housing before prices increased further. Secondly, there were persistent rumours in December that the investment amount required for citizenship could rise to USD 600,000 or even USD 1 million starting January 1, 2024 (though this has not happened yet).
• Consequently, there was some market stagnation observed in January and February. However, by March 2024, sales began to pick up again.

Where Is the Biggest Selection?

• The total number of residential units listed for sale in March 2024 slightly increased (by 3%) compared to the previous month and reached almost one million (983,520) properties. Regarding the range of available apartments and detached houses (including villas), half of the free—that is, waiting for new owners—housing stock in Turkey is concentrated in the Marmara Region.
• The total number of properties listed for sale in the Marmara Region (namely in the provinces of Istanbul, İzmir, Balıkesir, Tekirdağ, Bursa, Kocaeli, Sakarya, Manisa, Çanakkale, Yalova, Düzce, Edirne, Kütahya, Kırklareli, Bolu, Uşak, and Bilecik) is 491,864 units.
• The leader of this region is again Istanbul. Nearly 16 million people live in the largest Turkish metropolis, and the total number of properties listed for sale here is 237,846 units, or 24% of the total volume in Turkey.
• Regarding the districts of Istanbul, most of the available apartments and houses are concentrated in Esenyurt.
• The second province in the region with a large number of properties for sale is İzmir: 71,925 units. Following it is Kocaeli, a location particularly distinguished by its proximity to Istanbul and a high level of population employment. As of March 2024, 26,974 housing units were available here.
• The total number of properties listed for sale in three other significant provinces for Turkey’s economy—Edirne, Kırklareli, and Tekirdağ—is 34,656.

Demand from Foreigners

In March 2024, the volume of transactions with foreigners decreased by almost half (47.9%) compared to the same month last year, amounting to 1,778 units.

Regarding dynamics: the decline in March was the highest—during the winter, this figure did not drop below 45%, and the share of foreign investors in the total volume of buyers “dropped” to 1.7%, which is almost three times lower than the “stellar” end of 2022—about 5%.

Foreigners are alarmed by legislative instability, particularly regarding the housing characteristics required to obtain a residence permit, not to mention “citizenship by investment” (still at USD 400,000). However, Turkish market experts hope for an “investment thaw” in this matter and are taking certain measures themselves. For example, it was officially announced in April that foreigners without a residence permit would be actively assisted in opening bank accounts. Additionally, those who are willing to deposit one and a half times the monthly minimum wage (in Turkey, of course) may find it easier to obtain a tourist residence permit, which has been extremely difficult to obtain over the past year. The authorities expect that foreigners will spend more time in Turkey, explore, spend money, and choose where they would like to live and buy their own property. They indeed show a willingness to do something about it.

Returning to sales: over the past year, the top three leaders in the volume of transactions with foreigners have remained almost unchanged—Istanbul, Antalya, and the increasingly popular Mersin. In Antalya, the resort of Alanya is particularly popular, and it may soon gain the status of a separate province due to its significant growth and development in infrastructure.

In Alanya, which foreign investors clearly prefer at the moment, the price of 1 m² of housing as of March was TL 43,135 (USD 1,331), and the average cost of a housing unit was TL 4.74 million (USD 146,498). As can be seen, the figures are higher than in other popular metropolises. Over the year, Alanya “appreciated” by 45%.

In Q1 2024, the volume of transactions with citizens of other countries across Turkey decreased by 48% year-over-year, totalling 5,685 units from January to March.

Dynamics for the Year:

2023

March

3,415 units sold to foreign citizens. This is 38.7% less than the same month in 2022. The share of housing transactions with foreigners was 3.2% of the total volume.

Leading provinces: Antalya (1,324 properties), Istanbul (1,090), and Mersin (240).

Leading countries in purchasing real estate: Russia (1,175 units), Iran (472), Iraq (165), and Ukraine (160).

April

2,557 units, or -60.3%. The share of transactions with foreigners in the total volume for the month was 3.0%.

Leading provinces: Antalya (1,034), Istanbul (792), and Mersin (186).

Leading countries in purchasing real estate: Russia (817 units), Iran (377), Ukraine (136), Iraq (124).

May

3,167 units sold, -46.9% compared to the same month last year. The share of transactions with foreigners was 2.8%.

Leading provinces: Antalya (1,245), Istanbul (934), and Mersin (249).

Leading countries in purchasing real estate: Russia (991), Iran (503), Ukraine (175), and Germany (129).

June

2,625 units, or -69.6%. The share of housing sales to foreign buyers in the total volume of transactions was 3.1%.

Leading provinces: Antalya (1,004), Istanbul (760), and Mersin (223).

Leading countries in purchasing real estate: Russia (733), Iran (333), Iraq (175), and Ukraine (168).

July

2,801 properties, or -28.9% compared to July 2022. The share of housing sales to foreigners in the total volume of transactions was 2.6%.

Leading provinces: Antalya (996), Istanbul (832), and Mersin (263).

Leading countries in purchasing real estate: Russia (772), Iran (272), Iraq (204), Ukraine (146).

August

3,058 units, or -42.0%. The share of transactions with foreigners was 2.5% of the total volume.

Leading provinces: Istanbul (1,066), Antalya (919), and Mersin (248).

Leading countries in purchasing real estate: Russia (733), Iran (342), Iraq (220), and Kazakhstan (141).

September

2,930 units, a decrease of 42%. The share of housing sales to foreign citizens in the total number of transactions was 2.9%.

Leading provinces: Antalya (1,070), Istanbul (978), and Mersin (211).

Leading countries in purchasing real estate: Russia (722), Iran (327), Iraq (191), and Germany (148).

October

2,535 units, or -52.9%. The share of foreigners was 2.7% of all transactions.

Leading provinces: Antalya (931), Istanbul (758), and Mersin (294).

Leading countries in purchasing real estate: Russia (713), Iran (235), Germany (152), Ukraine (138).

November

2,342 properties, a decrease of 61.5% compared to the same month last year. The share of housing sales to foreigners in the total volume of transactions was 2.5%.

Leading provinces: Antalya (790), Istanbul (710), and Mersin (316).

Leading countries in purchasing real estate: Russia (637), Iran (234), Ukraine (128), and Kazakhstan (117).

December

2,064 units, or -67.7% compared to the same month in 2022. The share of housing sales to foreigners in the total volume of signed contracts for the month was only 1.5%, the lowest figure since the beginning of 2023 to March 2024.

Leading provinces: Istanbul (796), Antalya (609), and Mersin (230).

Leading countries in purchasing real estate: Russia (527), Iran (205), Ukraine (113).

Results for 2023

Throughout last year, foreign investors purchased 35,005 housing units in Turkey. The share of sales to foreign buyers in the total volume of transactions was 2.9%. Antalya was in first place in terms of the volume of real estate sold to foreigners (12,702 units). It was followed by Istanbul with 11,229 sales and Mersin with 3,016 purchased properties for the year.

2024

January

2,061 units, or -50.5% compared to January 2023. The share of transactions with foreigners in the total volume of residential property sales was 2.6%.

Leading provinces: Antalya (747 units), Istanbul (710), and Mersin (211).

Leading countries in purchasing real estate: Russia (555 properties), Iran (208), Ukraine (127), as well as Iraq and Kazakhstan (99 each).

February

1,846 units, or -44.9%. The share of such transactions in the total volume was exactly 2%.

Leading provinces: Istanbul (691), Antalya (659), and Mersin (151).

Leading countries in purchasing real estate: Russia (395 units), Iran (200), Iraq (112), and Ukraine (105).

March

1,778 housing units sold to foreigners. This is 47.9% less than in March 2023. The share of this segment in the total volume of sold properties was 1.7%.

Leading provinces: Istanbul (652), Antalya (618), and Mersin (151).

Leading countries in purchasing real estate: Russia (411 units), Iran (182), Ukraine (129), and Iraq (82).