In 2022, Turkey entered the list of the world’s most popular countries. Over 51.2 million foreign nationals visited the country during the year. Istanbul has become the leader of the “most visited cities”, receiving 13.4 million foreigners. Many of them entered the local real estate market to find inexpensive housing. In total, from January to October, 1,159,853 housing units were sold across the country, which is 6.7% more than last year's figures for the same period. In November, a total of 117,806 housing units were sold in Turkey. The highest share of sales was in the city – 19,687 units, 16.7% of the total number of properties sold.
Due to the acceleration of sales and the lack of ready-made development projects, there have been changes in real estate prices in Istanbul. We will tell you more about the property market and its prospects for 2023 in our article.
Property market trends
2021-2022 was successful for the Turkish housing market. Istanbul, as the most sought-after city amongst overseas buyers (with approx. 16.5-17% of the total volume of buyers), showed unprecedented growth for the year. Prices for apartments and houses in Istanbul increased by 241% due to inflation and increased demand from foreign nationals. Although the share of foreign buyers in the market was approx. 5%, this was enough to heat the market.
Due to the rapid devaluation of the lira, real estate in Istanbul has become more affordable for those receiving an income in euros or dollars. Since the end of February 2022, the influx of international buyers has also increased.
In November 2022, low-cost housing sales to foreign nationals grew by 40.6% compared to the previous year, and by 29.6% compared to November 2021.
The rise in the price of housing in Istanbul
According to data published by the Central Bank of Turkey, the average cost of housing reached $1,432 per 1 m2 in the real estate price index for October 2022. Upon research, the highest cost of living space was in September 2016, when the price of 1 m2 reached $1,479. At that time, the mortgage rate was 12.09%, whereas, in September 2022, it had reached 20.98%.
The changes also affected the rental market. Due to the influx of visitors over the year, this indicator in Istanbul increased by almost 145%, and the national average grew by 159%, according to the Center for Economic and Social Research (BETAM).
In Istanbul, the rental yield in 2022 ranged from 2.53% to 12.72% with an average of 5.99%.
In other cities, rental yields are similar to those in Istanbul. In Ankara, the yield is lower – from 4.05% to 11.41%, in Antalya – from 3.66% to 7.99%, in Izmir – from 3.69% to 13.42%, in Adana – from 2.92% to 6.98%, in Bursa – from 3.31% to 7.01%, in Kayseri – from 4.77% to 7.15%, the yield in Konya is from 4.48% to 6.88% per annum.
Changes in legislation
The Turkish government is interested in attracting foreign capital and building mutually beneficial relations with foreign nationals. Hence, the procedure for obtaining a residence permit and citizenship in Turkey is easier than in several other countries. At present, a foreigner interested in long-term residence in the country can buy an apartment in Istanbul or another city in Turkey and apply for a citizenship or residence permit. To do this, the following important conditions must be met:
- to obtain a residence permit, the price of an apartment in Istanbul must be at least $75,000;
- to obtain citizenship, the cost of housing in Istanbul must be at least $400,000.
In 2022, due to the unprecedented growth of applicants for a residence permit, Ikamet (document confirming the residence permit) was frozen in 1,169 regions of the country, including Beyoğlu and Fatih (Istanbul). The full list of areas closed for residence permits is available on the official website of the Presidency for Migration Management.
Real estate market prospects for 2022-2023 in Istanbul
The Turkish government has taken several decisive measures to reduce the accelerated rate of price growth. So, a major social housing project was launched in September.
The housing market began to slow down in the summer. From July to August, sales decreased by 12.9% and 12.7%, respectively, year-on-year. In September, the reduction was 23%, compared to the same period a year earlier, and by 8% compared to the August figures. In August, the rise in the price of apartments in Istanbul 2022 slowed down by 2.1 points. It is important to note that this decline was the highest since September 2017.
According to analysts, prices in Istanbul 2023 for apartments and other properties will continue to increase, but the growth rate will significantly decrease.
At present, the minimum value of real estate in Istanbul in dollars is $106,000.
We will help you buy real estate in Istanbul
Are you planning to enter the Turkish real estate market in Istanbul, but you do not know where to start? The Turk.Estate website has published the best real estate in the best areas of the main cultural centre of Turkey, as well as the current cost of housing in Istanbul and information about the real estate market.
Our specialists are always ready to advise on how to find, purchase and sell a property in the country. You will receive comprehensive support in buying a home and high-quality service from leading experts!