By the end of November, it is not only analysts busy collecting statistics on the number and quality of residential real estate transactions. Sales departments in development and real estate companies are also finding out about the relevant factors and how they affect the volume of purchased real estate.
This is not only the quantity, quality, location and price of lots (such as apartments, townhouses, detached houses, etc.) but also key changes in legislation that may affect demand, the condition of infrastructure, and the development of social and transport infrastructure in large cities and so on.
Let's talk about the most significant moments in the real estate sector. Key events and record figures in less than 11 months of this year.
Content:
- The volume of housing transactions exceeded one million
- The annual increase in prices reached 182%
- 20% of the world's largest contractors are turkish developers
- $500 billion in overseas projects over 20 years
- The average cheque of a foreign buyer has grown to a quarter of a million
- Home sales to foreigners increased to 60%
- Russians start buying 200% more housing, occupying 20% of the market
- Turkey is a world leader in house price growth
- Rent has risen by 329% over the year
- Istanbul, Izmir and Ankara are the most convenient cities to live in
The volume of housing transactions exceeded one million
The first half of 2022 was characterized by a much higher demand than July-October, although experts place certain bets on the final two months of the year. Due to the successful period in January-July, the total volume of transactions across the country for 9 months exceeded one million. This is in part due to the desire of buyers to invest their savings in the most reliable medium: floors, walls and ceilings. In other words, housing. Real estate is steadily growing in price – and, considering the dynamics of price growth rates, can be profitably resold in a few months. That's not to mention the fact that it will not depreciate.
In total: 1,057,193 housing units (apartments, townhouses, houses, etc.) were sold 1in Turkey in the first three quarters. In January-August, sales volumes increased by an average of +18% compared to the same period last year, depending on which sphere of real estate. Due to the unsuccessful September in January-September, the annual dynamics (the relevant increase in the same period of 2021) decreased to +11.4%. Nevertheless, the figures have grown significantly. In the mortgage segment, the increase was around 30% to 40% in different districts.
Here, for example, are the indicators for January-August in the country:
- Mortgage transactions are 211,631 versus 152,096 (for January-August 2021), or +39.1%;
- Non-mortgage transactions are 731,160 versus 649,899, or +12.7%;
- Sales of new buildings are 276,164 versus 243,189, or +13.9%;
- Secondary real estate sales are 667,627 versus 558,806, or +19.5%.
In general, almost 2.5 million units of real estate including but not limited to: residential, commercial, land plots and offices. This vast number of units was sold in the first three quarters of the year, a precise total of 2,430,623 lots. Of these 423,600 are land plots, which are becoming increasingly popular.
A total of 27,901,295,813 Turkish liras (TL) were utilized for transactions between January and September.
Most deals were concluded in the country's largest metropolis, Istanbul: with a total of 300,549. With half as many being concluded in Ankara (154,657), followed by Izmir with 124,720 deals, Antalya with 93,667 and Bursa with 88,125.
The annual increase in prices reached 182%
According to experts of the Endeksa real estate price analysis platform, the annual increase in house prices in Turkey in the first half of the year amounted to 182%. There are signs that by the end of the second half of the year, this indicator will be markedly higher.
Endeksa analyzed the price growth in the 30 most prominent provinces. Istanbul, Antalya and Mersin were among the three winners in real estate price dynamics. The latter, thanks to injections into the region’s economy, is becoming a much larger part of the country’s housing ratings.
For individual provinces, the increase in cost is higher. As for the TOP 3 - in Istanbul, housing prices rose by 234% in 12 months, according to mid-summer data. The average selling price per square metre of housing was 17,592 Turkish lira (TL), with the average price per housing unit being 2,109,480 TL. Antalya is lagging significantly in dynamics, with the increase for the year being 226%. The average price per housing unit in the summer was 14,961 TL, and the average price for an apartment was 1,944,930 TL. In Mersin, these figures amounted to a 223% increase, with the average selling price per square metre being 8,914 TL, and the average price per lot being 1,335,150 TL.
20% of the world's largest contractors are turkish developers
There were several "high-profile" figures in the segment of development projects outside Turkey this year. Some of them have become new records.
For example, Turkey holds a large share in the world ranking of the 250 largest international developers: there are now 48 companies and holdings. Almost every fifth developer relevant to the rating is Turkish, which amounts to nearly 20% of the total figure.
$500 billion in overseas projects over 20 years
This year, analysts summed up the results of the 20-year period of activity Turkish construction companies have conducted abroad. Since 2003, the developers of the Republic of Turkey have implemented projects worth $458.4 billion in 131 different countries.
The Ministry of Commerce, summing up the data, reported that Turkey started working under contracts abroad 50 years ago. The number of projects has been steadily increasing over the past 20 years with 11,273 new projects being implemented in the last two decades.
Even in 2020, despite the political and economic instability as well as the significant consequences of the pandemic not only in Turkey but also in its partner countries - the foreign construction sector received 354 projects for $15.9 billion.
In the first half of 2022, Turkey implemented 132 projects with a total cost of $4.6 billion. Updated data on the results of three quarters amounts to 215 projects totaling $8.69 billion. Even in 2021, despite the economic downturn, the number of jobs abroad increased to 431 and now has increased even further.
The average cost of implemented projects outside the Republic ranges from $35-40 million.
In the near future, as President Recep Tayyip Erdoğan said, it is planned to sign projects abroad for $75 billion within the contracting sector.
The average cheque of a foreign buyer has grown to a quarter of a million
As for the sale of housing to citizens of other countries, 2022 was marked by several major legislative innovations. First of which is the limit for obtaining accelerated citizenship for investments rising from $250,000 to $400,000. Residence permits for TAPU (property right), were issued to owners last year regardless of the price of the residence permit they purchased. However, they now depend on the price. In the largest cities, the price of housing for obtaining a residence permit of this type should be at least $75,000. In small settlements, the price for the same permit is $50,000 or more. The lists are posted on official websites.
Since there is no point in trying to spend the least amount possible on a residence permit, interested parties from abroad have switched to more spacious and high-quality housing in the most esteemed and luxurious places. This housing can then be rented and sold much more profitably. Branded real estate ranks first, which has risen in price by more than 3% in just a month, and has almost doubled in a year.
It necessitates an explanation that branded housing is traditionally built by large corporations, as if under their brand. Sales statistics in this segment are overseen by the REIDIN-GYODER New Housing Price Index, which publishes reports several times a year. The most recent report came out in September 2022. It demonstrated a sharp increase in prices for branded residences by almost double.
Foreign citizens have purchased many lots. As a result, the average cheque for the purchase of housing among foreign buyers who choose any of the branded lots has risen to $245,000. This information comes straight from the mouth of the Head of the Board of Directors at the Association for the Promotion of Real Estate Abroad (GIGDER), Ömer Faruk Akbal. A year ago, this amount was several tens of thousands of dollars less.
Home sales to foreigners increased to 60%
In the construction sector as a whole, the first half of 2022 (including July) was particularly active regarding sales of residential real estate to citizens of foreign nationality: the number of transactions with foreigners increased by 57.4% from January to July compared to the same period in 2021.
August-September slowed down this dynamic. Nevertheless, the number of lots purchased by foreign nationals in the first three quarters of 2022 rose by almost a third (32.5%). A total of 49,644 lots were sold in 9 months.
Russians start buying 200% more housing, occupying 20% of the market
As for the nationality of the buyers, the Russians have been steadily at the forefront for several months, pushing past the former recognized leaders Iran and Iraq. During their six months of prominence, almost 20% of transactions in the division of foreign housing investment were concluded by citizens of the Russian Federation in 2022 or every fifth.
Turkey is ahead of the UAE, Thailand, Montenegro and Greece - previous countries where Russians used to be more involved with the purchase of residential real estate, Ömer Faruk Akbal explained.
Returning to the relevant nationality of buyers: Russians bought a lot of housing in April and were also in a position of buying prominence before then. As a result, the number of home purchases in Turkey increased by 200%. To be precise, by 199% for the first-third quarter of 2022 compared to the same period of 2021. If, in September 2021, citizens of the Russian Federation bought 540 lots of residential real estate in Turkey the comparative figure in September 2022 is 1,196 lots, and in 9 months of this year a total of 9,311 units.
Turkey is a world leader in house price growth
In the first quarter of 2022, Turkey was the "leader of the planet" in housing prices, according to the international real estate consulting company Knight Frank and its report on the results of January-March. This report assessed the indicators of 56 countries. Compared to the first quarter of 2021, residential real estate in Turkey rose by 110%. Moreover, the silver and bronze winners – the Czech Republic and Slovakia – were not even close with a 25.9% and 22.1% increase respectively. There is inflation in Turkey, and even taking that into account, the country is still in a dominant leading position.
Moreover, Antalya showed the greatest dynamics among the provinces with an increase of 180.3%. In this province, Russians and Iranians buy are the most prominent foreign investors. Istanbul is not far behind with an increase of 165.4%. Furthermore, Adana and Mersin also record significant growth with each measuring a 160.7% increase.
Rent has risen by 329% over the year
In the rental housing market, analysts do not have time to update the figures. Rental rates increase exponentially, despite the efforts of the authorities to limit their growth. This is pleasant for the owners, but not for the tenants. However, this article is intended for those who have bought or are planning to buy an apartment or house in Turkey and may consider renting it out to receive passive income or accelerate the return on investment. As such, readers may be pleased to know that in Istanbul - where there are many housing units available both for sale and for rent - over the seven months of 2022, rental rates in the city increased by an average of 200%.
In Antalya, where a large wave of immigration and long-term tourists has begun since the beginning of March, rental rates have increased by 329% over the past 12 months. Moreover, if you check the data for October which has not yet been received - then the figure is most likely even higher. At the moment, according to local realtors, Antalya is full – there are no free places in apartment hotels left.
If you consider all the above, in terms of higher rental rates, Turkey is a leader in Europe.
Istanbul, Izmir and Ankara are the most convenient cities to live in
Forbes experts analyzed several parameters - such as the opportunity for study, sports, recreation, transport infrastructure and social services - and found out which Turkish cities people consider the most comfortable for everyday life. A list of the TOP 10 was then published.
The TOP 3 were Istanbul, Ankara and Izmir who took first, second and third place respectively. The TOP 10 is available here.