Alanya, a small resort town on the Anatolian coast, has hit the absolute record for the rise in apartment prices in Turkey. According to the November 2020 house price index published by the Hürriyet Emlak newspaper, the rise in apartment prices in Alanya reached a record 85.32 percent! From November 2019 to November 2020, the average cost per square meter of housing in Alanya increased from 2,923 TL to 5,417 TL. What are the reasons for the price growth?
Expert opinions
According to the town's newspaper Yeni Alanya, the main reasons for the significant rise in prices are the special mortgage campaign and the coronavirus pandemic. During the quarantine, more and more foreign and local property buyers from large cities in Turkey have considered Alanya, with its wonderful climate, secluded houses and picturesque landscapes. According to experts, property sales in Alanya in the challenging 2020 exceeded sales in 2019..
Kerim Balıktay, President of the Association of Real Estate Agents of Alanya (ALEKOD): "During the pandemic, Alanya has attracted many foreigners. Houses and apartments in Alanya are in greatest demand today among nationals of Russia, Iran and Saudi Arabia. If European countries had not introduced the pandemic restrictions, there would have been a high interest from Europe as well. The growing demand has become one of the key reasons for the sharp rise in prices."
Angelica Chezhia, a real estate and investment consultant in Alanya: “At the beginning of the pandemic, we were afraid that the coronavirus and related restrictions would freeze the real estate market. However, in Alanya, home sales in 2020 exceeded the last year's sales. Our city turned out to be very popular during these difficult times due to its climate as well as the fact that in Alanya, measures to combat the pandemic have been taken at a very high level. Our region offers a perfect combination of five-star hotel quality of development projects and low prices for luxury apartments. Today, many foreigners who have the opportunity to study or work remotely choose Alanya as a safe shelter during the pandemic. The greatest demand for apartments in Alanya is observed among Russians (especially Moscow), nationals of Ukraine, Kazakhstan and the Middle East."
Mustafa Küçücker, the President of the Alanya Contractors Association (MÜTBİR): “We expect sales to jump in 2021 with the launch of the coronavirus vaccination. The pandemic is a global crisis that has hit our industry too. However, the unprecedented cut of mortgage rates helped the sector recover quickly. The pandemic became a test for Alanya, during which our city showed itself to be a safe place (in contrast to even the most prosperous countries in Europe). We believe that positive feedback from foreigners about Alanya will help recover real estate sales in 2021."
The key reasons for the rise in apartment prices in Alanya
In addition to the special mortgage campaign (which led to a boom in property sales not only in Alanya, but throughout Turkey) and the pandemic (which attracted Turkish and foreign buyers seeking after a safe home in a comfortable climate), the reasons for the rise in Alanya real estate prices also include a shortage of new housing and a rapid rise in prices for basic building materials. The high demand for new and off-plan housing in Alanya almost exceeds the market supply. When potential property buyers in Alanya get used to the new prices (and realize that they won't be able to buy any property at the prices of early and mid-2020), the demand for properties at the current price rates will continue to grow, experts say. It is expected that the average cost of housing in Alanya will increase by at least another 30 percent in 2021.
How have the prices for secondary housing changed in Alanya?
The prices for luxury apartments have significantly risen. Mahmutlar has experienced the highest growth rates. The minimum cost of secondary apartments in luxury residential projects with a wide range of amenities including spa options in Mahmutlar is the following:
- 1+0 (studio apartments, 40-50 m2) - €38,000-40,000;
- 1+1 (one-bedroom apartments with an area of 60-70 m2) - €47,000-50,000;
- 2+1 (two-bedroom apartments with an area of 100-125 m2) - €68,000-72,000;
- 3+1 (three-bedroom apartments and penthouses) - from €90,000;
- 4+1 (four-bedroom apartments and penthouses) - €95,000-100,000.
In the districts of Kestel, Tosmur and Oba, the minimum cost of a luxury resale unit (1+1) starts at €52,000. 2+1 apartments have risen in price from €60,000-65,000 to €75,000-80,000. The prices of larger apartments (with three bedrooms and more) have seen the lowest growth rates. While at the beginning of the year a large luxury apartment in Oba or Kestel could cost at least €85,000, today its price starts at about €100,000.
In the new low-rise district of Kargicak (which has developed over the past year into a premium low-rise town on the Mediterranean coast), a resale 1+1 apartment can still be purchased at €59,000-62,000. In Avsallar and Konakli, the resort suburbs of Alanya, you can buy a resale luxury apartment from €45,000-50,000. In the central districts of Alanya (Cikcilli, Güller Pınarı, Kadıpaşa, Fığla, Kızlar Pınarı), the cost of a resale 1+1 apartment starts today from €50,000. In the area of the legendary Cleopatra Beach (Saray Mahallesi), the cost of a 1+1 luxury apartment with a minimum set of resort amenities starts from €68,000.
How have the prices for new apartments changed in Alanya?
Alanya has been experiencing the growing shortage of new buildings at the end of 2020 and the beginning of 2021. Due to the pandemic, the fall of the Turkish Lira, the rise in the cost of building materials and the rapid rise in land prices, a very limited number of contractors in Alanya can afford new projects. Therefore, last year's price rates for similar projects of the same developers differ today by an impressive 30-40%. Property buyers are actively buying the most popular 1+1 apartments despite the noticeable rise in price. In December 2020, it was quite common when a buyer who considered Alanya because of its spring and summer prices was having second thoughts about buying an apartment for €47,000 while the spring price for this apartment was around €39,000. While a buyer was thinking of whether to buy a property or not, the cost of a unit could rise up to €52,000.
An interesting point is that in the rest of the towns of Antalya province (the city of Antalya and the main resort spots of the Anatolian coast), the annual growth rate of apartments reaches the level of 48.57 percent, which is considerably lower than in small Alanya and its suburbs.
How have the prices for villas in Alanya changed?
Due to the coronavirus pandemic, villas in the Anatolian region have become the most sought-after property options in Turkey in 2020. Alanya has been no exception. The demand for villas to buy and rent soared in the summer of 2020 and still remains high. Today, the minimum cost of a luxury villa in Alanya starts from €180,000-200,000. Low-budget houses, which before the pandemic could have been bought for €70,000-90,000, are now sold for €110,000-130,000. Premium villas in Alanya, which at the beginning of 2020 cost €220,000-250,000 and were presented in a wide range, now cost from €270,000 for an off-plan option and €300,000 for a ready to move in one. The stock of ready-to-move-in premium villas has practically dried up by the beginning of 2021.
Why have villas grown in price and become so popular? The demand for detached houses where you can go through the lockdown safely and in a comfort of your private home rather than a block of flats is observed both from foreign and Turkish (mostly from residents of large cities) buyers. Now the key requirements of people who are looking for a property in Turkey (both for buying and renting) have become secludedness and vast surroundings. Villas are the ideal option for a home that meets these requirements. The top five buyers and tenants of villas in Antalya and Alanya include Germans, Dutch, Belgians, French and Russians. Those who do not plan to live in Turkey, but want to invest profitably also choose villas. Renting out villas today brings their owners a high, year-round income. The cost of winter rentals in the Anatolian region ranges from €800 to €3,200 per month (depending on the area, type of villa and amenities) and demand exceeds supply.
Which housing in Alanya has risen in price the least and the most?
A relatively small increase in prices has been observed in the premium apartment segment in Alanya (with the exception of 1+1 apartments, which are the most popular options). Large (2+1, 3+1, 4+1) premium-segment apartments have slightly risen in price - by only 7-10 percent. However, before the rise in price, the cost of a new premium-class apartment from developers was significantly higher than the cost of a similar resale property.
The price rates of budget apartments in simple Turkish apartment buildings with no hotel amenities have increased significantly (with a tangible reduction in supply on the market). While at the end of 2019 a quality, renovated 2+1 apartment with new furniture and appliances could be purchased in Mahmutlar for €25,000-30,000, today the price of such apartments starts from €40,000-43,000. During the mortgage boom of 2020, it was the resale budget apartments that Turkish residents were buying the most.
How will apartment prices change in Turkey in 2021?
Many property buyers are thinking of whether to buy an apartment now or wait for a possible rollback in apartment prices in Alanya in 2021. Market experts predict a further rise in prices as they expect a shortage of new and off-plan housing in the next two years in Turkey. Mehmet Kalyoncu, president of the largest Turkish investment company GYODER, believes that properties in Turkey will continue rising in price during as well as after the pandemic. This fact, according to the expert, is indicated by all industry indices. The main reason for the upcoming rise in prices is the reduction in housing stock due to record sales in the summer of 2020.
In the second, third and fourth quarters of 2020, Turkey became the world leader in the growth of prices for residential properties (according to the British consulting company Knight Frank, which publishes the Global Real Estate Price Index on a quarterly basis). According to the international study that tracks the performance of 56 of the world's major national residential property markets (using official data from the central banks and national statistical offices), prices for houses and apartments in Turkey rose by 27 percent year on year by November 2020. Experts at Knight Frank consider Turkey’s strong economy and the interest of foreign investors in Turkish housing to be the main reasons for the rise in prices.