Has the past decade been successful for real estate investors in Turkey? How many houses and apartments were sold and how much did prices increase? Is it possible to consider buying apartments in Turkey an effective way to save and increase capital? The Turk.Estate web-portal has analyzed the ten-year statistics of Turkish housing sales to get answers to these questions.
CONTENT
- Real estate in Turkey in 2010
- Real estate in Turkey in 2011
- Real estate in Turkey in 2012
- Real estate in Turkey in 2013
- Real estate in Turkey in 2014
- Real estate in Turkey in 2015
- Real estate in Turkey in 2016
- Real estate in Turkey in 2017
- Real estate in Turkey in 2018
- Real estate in Turkey in 2019
REAL ESTATE IN TURKEY IN 2010
For the Turkish housing market, 2010 was the year of the apartment stock sales with a minimum number of new buildings. This concerned the so-called branded housing of the concept residential complexes of the premium and luxury segments. Developers mostly continued to prepare for new projects and search for suitable land plots, simultaneously selling off their stocks of ready-made apartments. In general, 2010 ended well for Turkish contractors and housing sellers. Market experts called it an excellent time for housing investment, but a difficult period for commercial real estate and land investment in Turkey. The number of licenses for new construction increased by 64 percent in the first half of 2010 compared to the same period of 2009. The construction sector, which declined by 18.2 percent in the third quarter of 2009, grew by 24.6 percent in the same period of 2010. The share of the construction sector was 5.6 percent in GDP for the first nine months of 2010.
How many houses and apartments were sold in Turkey in 2010? According to the 12-month results, the sales volume amounted to 607 thousand objects. Mortgage sales increased by 30 percent for the year, total sales exceeded 56 billion liras, and mortgage rates were at 9-10 percent in 2010. Apartment prices increased (adjusted for inflation) by only 2.19 percent in 2010 in Turkey.
REAL ESTATE IN TURKEY IN 2011
In 2011, land prices remain high, but there is a dynamic growth of new housing projects. The construction sector showed a rapid annual growth of 11.3 percent. Public investment in the sector declined by 35 percent, while private investment rose to 65 percent. According to the report of Turkish Statistical Institute, 100 thousand 327 real estate objects were built in the country in 2011, 85 thousand 736 of them (85 percent of the total volume) were apartment buildings.
Housing sales increased to 708 thousand houses and apartments in 2011. Residential property prices increased by 11.34 percent in 2011 in Turkey. Turkish housing sales for foreigners amounted to 6 thousand 282 objects. The buyers were citizens of 93 countries. Mortgage rates were at 9-10 percent, but they rose to 14.5 percent at the end of the year. Despite this, the forecasts of developers and real estate sellers were very optimistic for 2012 in Turkey: market experts said that 2012 would be a year of strong growth in the real estate market. Did the forecasts come true?
REAL ESTATE IN TURKEY IN 2012
Against the general background of the global economic downturn, Turkey also slowed down with the annual growth of the construction market at only 1.5 percent. However, 2012 was the most significant and memorable year for the Turkish real estate sector over the past twenty years. This is how market experts spoke about it after the fact. In 2012, three important laws directly related to the Turkish real estate market were adopted: the urban transformation law (massive strengthening of buildings against the threat of earthquakes), the law on reciprocity (expanding the opportunities and rights of foreign investors in Turkish real estate) and the land law, regulating the land purchase for various purposes. The significance of the laws became obvious in 3-5 years after their adoption. Another milestone of 2012 was the employment growth in the construction sector: it reached its historic peak of 1,896,000 people by September increasing its share of total employment to 7.4%.
According to statistics, there was an oversupply in the housing market in 2012: the number of construction licenses received over the past two years reached 1 million 563 thousand. The number of housing sold in recent years was consistently less than the newly built one. The stock of new housing amounted to 776 thousand apartment buildings in 2012 in Turkey. Despite this, real estate prices continued to rise in the country. However, developers saw a dead end ahead and significantly reduced the new housing offers. If 215 thousand housing construction permits were received in the last quarter of 2011, this figure decreased by almost 50 percent – to 115 thousand in the first quarter of 2012.
How many houses and apartments were sold in 2012 in Turkey? According to the specialized online publication about real estate emlak365.com, the total sales of 2012 amounted to 701 thousand objects. Mortgage interest rates decreased to 9-10 percent, which slightly stimulated the sector growth. Housing prices rose 12 percent over the year.
REAL ESTATE IN TURKEY IN 2013
Analysts called 2013 the golden year of the real estate industry in Turkey. The volume of housing sales increased sharply. The annual result was a record: 1 million 157 thousand 190 objects (data from the Main Cadastral Office of Turkey). At the same time, every apartment sold in 2013 turned out to be an Istanbul apartment.
Turkish real estate was one of the most important investment tools in 2013. The reasons for this were the constant increase in housing prices, the absence of the inflation influence and the income from renting houses and apartments in Turkey. In 2013, the investment attractiveness of Turkish housing became higher than the attractiveness of the stock market and the currency market. The share of mortgage sales was about 40 percent of the total in 2013. Housing prices for the year rose by 14.75 percent, and mortgage rates fell to 7.5 percent.
REAL ESTATE IN TURKEY IN 2014
Housing sales remained almost at the same high level and amounted to 1 million 165 thousand 381 objects in 2014. It was 0.7 percent more than in 2013. Traditionally, the largest number of houses and apartments were bought in Istanbul - 225 thousand 454 objects. The cost per square meter of housing for the first time exceeded 2.5 thousand liras in Istanbul. Real estate sales for foreigners increased by a record breaking 80 percent and amounted to 18 thousand 959 objects in 2014. The province of Antalya with 6 thousand 542 objects took the first place by popularity among foreign investors.
In June 2014, Turkey ranked the ninth place in the world in real estate price growth ("Global Housing Construction Monitoring" from the IMF). However, the excessive supply of new residential real estate approached 1 million buildings in 2014 in Turkey. This slowed the Turkish construction market growth. Despite this, the annual increase in apartment prices was a record breaking 24 percent in Turkey. The main reasons for the increase in the housing cost were the lira decline, the increase in the energy cost, the constant increase in land prices, as well as the high profitability of houses and apartments in Turkey.
REAL ESTATE IN TURKEY IN 2015
Turkish real estate (both residential and commercial) was one of the most profitable investment tools in 2015. Apartment prices increased by 20 percent over the year, and a record number of houses and apartments were sold in Turkey – 1 million 289 thousand 320 objects. The most popular cities for apartment buyers were Istanbul, Ankara, Izmir, Antalya, Bursa and Mersin.
In 2015, foreigners increasingly bought commercial real estate in Turkey. According to statistics, foreign investment in shopping centers and commercial real estate in Turkey increased by 65 percent from 2010 to 2015, and the forecast for 2015 predicted further rapid growth of this market segment.
2015 was a year of dynamic growth in construction in Istanbul that was the most popular city with real estate buyers in Turkey. 1,242 new branded housing projects were implemented in 34 districts of the metropolis. Thus, the number of concept residential complexes reached half a million in 2015 in Istanbul. At the same time, the increase in apartment prices was one of the highest in the country in Istanbul: a square meter of housing in some areas rose by a record breaking 53 percent over the year.
REAL ESTATE IN TURKEY IN 2016
The real estate and construction sector continued to be one of the leaders of the Turkish economy in 2016, despite the fact that the economy decreased by 1.8 percent for the first time in seven years. Annual housing sales figures (1 million 341 thousand 453 objects) indicated that the citizens of the Republic, even in the conditions of economic recession, were willing to invest in real estate considering it a reliable and safe placement of financial capital.
Almost 450 thousand houses and apartments were sold for mortgages in Turkey during the year, while housing sales for foreigners decreased by 20.3 percent compared to 2015 and amounted to 18 thousand 189 objects. The largest number of houses and apartments were bought by citizens of Iraq, Saudi Arabia, Kuwait, Russia and Afghanistan in 2016.
Apartment mortgage sales increased by 21.8 percent in 2016, the share of mortgage sales was 34.4 percent of the total volume (of which 18.5 percent was in Istanbul).
For the first time in four years, the volume of new housing sales reached the highest level - 632 thousand objects. In addition, 750 thousand new apartments were built and put into operation in 2016. And another 978 thousand were under construction during this period: Turkey continued to increase the stock of new housing dynamically.
In September 2016, the Turkish government, which wanted to stimulate the construction sector, temporarily (until October 2017) reduced the VAT rate from 18 to 8 percent. This led to a major upturn in the sector.
How did house prices rise in 2016? The annual growth was 14 percent on average in the country. However, according to the Hürriyet Emlak real estate index, house prices rose by a record breaking 22 percent over the year in Istanbul.
REAL ESTATE IN TURKEY IN 2017
In 2017, houses and apartments sales continued to grow in Turkey, which amounted to 5.1 percent year-on-year. For 12 months, 1 million 409 thousand 314 objects were sold in the country. Traditionally, most of the housing was sold in Istanbul (16.9 percent of the total annual volume). A great part of the purchase and sale transactions were mortgages in 2017. It was more than 473 thousand objects (25.6 percent of the total volume). The share of new apartment sales was 50.1 percent of the total volume.
Foreigners bought 22 thousand 324 housing units in Turkey in 2017 (an annual growth of 22.2 percent). The five most popular provinces with foreign investors are Istanbul (8 thousand 182 objects), Antalya (4 thousand 707 objects), Bursa (1 thousand 474 objects) and Yalova (1 thousand 79 objects). The top three foreign investors included Germans, who increased the volume of investments in real estate in Turkey by 100 percent.
The number of construction permits decreased by 34 percent in 2017. The actual problem of the construction sector was the increase in the price of the key material – iron. In August, the Turkish Contractors Association called for all work to be stopped in protest because the cost of a ton of metal exceeded 2.5 thousand dollars. The contractors also submitted a request to the government of the country to reduce VAT.
Since the second quarter of 2017, the housing price index growth began to slow down significantly, and the decline intensified in the third quarter. If the annual price growth was 13.13 percent in April, and it was 11.7 percent in October. The average annual price increase was 16 percent in 2017. In the third quarter of 2017, the British consulting company Knight Frank published a global housing price index. According to the report, Turkey ranked the sixth place in the world in real estate price growth: over the past 5 years, prices had increased by a total of 95.3 percent.
REAL ESTATE IN TURKEY IN 2018
Housing sales decreased by 2.4 percent in Turkey in 2018 compared to the previous year and amounted to 1 million 375 thousand 398 objects. Istanbul was in the first place again in sales (17 percent of the annual volume). Against the background of a general and minor decline in sales, Turkish real estate sales for foreigners increased significantly. An annual growth amounted to 78.4 percent, and an annual volume amounted to 39 thousand 663 objects. As before, Istanbul (more than 14 thousand objects) and Antalya (almost 8 thousand objects) remained the most popular provinces with foreign buyers of real estate in Turkey. The top five foreign investors in 2018 looked like this: citizens of Iraq (8 thousand 205 objects), citizens of Iran (3 thousand 652 objects), citizens of Saudi Arabia (2 thousand 71 objects), citizens of Russia (2 thousand 297 objects), citizens of Kuwait (2 thousand 199 objects).
How did housing prices change in Turkey in 2018? The new housing price index increased by 0.28 percent in May compared to the previous month, by 3.55 percent compared to the same period of 2017 and by 80.90 percent compared to January 2010. However, residential real estate prices declined in Turkey from March to October 2018: this could not but affect the annual result. The annual growth in housing prices was only 9.69 percent in 2018.
The average price per square meter of housing reached its historic peak in October 2018 in Istanbul and amounted to 5 thousand 123 liras, but then it began to decline, which amounted to 491 liras (up to 4 thousand 632 liras per square meter) for seven months of price decline. If we take the annual price changes by provinces, housing have rose by only 4.91 percent in Istanbul, by 8.86 percent in Ankara, by 11.47 percent in Izmir, by 12.89 percent in Bursa. The province of Antalya showed the record growth against this background – 19.86 percent. At the end of 2018, the average price per square meter of housing was 2,848 liras in Turkey.
REAL ESTATE IN TURKEY IN 2019
According to the forecasts of market experts, the real estate price growth was expected at the level of 20 percent in 2019 in Turkey. Such a positive forecast was primarily due to the fact that the cost of construction and improvement in recent years had increased to 60 percent. This had not yet affected the final cost of new housing. The second reason for the price increase was a 55 percent decrease in new permits for construction in 2019.
Did the forecasts come true? The annual price increase was only 9.92 percent in Turkey. According to the analysis of housing sales, the prices of houses and apartments continued to fall (-7.73 percent) for the first six months of 2019. This decline was offset by the rapid price growth in 2020. For example, apartment prices decreased by 7.17 percent in the first 6 months of 2019 in Istanbul, but they increased by 8.33 percent in the first 6 months of 2020. In Antalya, the six-month decline was 2.43% followed by a six-month increase of 11.89%.
How many houses and apartments were sold in Turkey in 2019? According to the information by the Turkish Institute of Statistics, the annual sales volume amounted to 1 million 348 thousand 728 objects: 1.94 percent lower than in 2018. At the same time, the volume of mortgage sales amounted to 332 thousand 538 apartments and houses, mortgage rates were at the level of 5-6 percent.
The reduction of the investment threshold for foreigners who wanted to obtain Turkish citizenship for the purchase of real estate from 1 million to 250 thousand dollars attracted more and more people to the Republic. In 201, foreign citizens bought a record breaking amount of housing in Turkey - 45 thousand 483 objects. Istanbul (20 thousand 857 objects) and Antalya (8 thousand 951 objects) were the main preferences of buyers. In 2019, the Top-7 most active Turkish real estate buyers included: Iraqis (7,596 thousand objects), Iranians (5,423 objects), Russians (2 thousand 893 objects), Saudis (2 thousand 208 objects), Afghans (2 thousand 121 objects), Germans (1 thousand 723 objects) and British citizens (1 thousand 353 objects).