PROPERTY PRICES IN ISTANBUL IN 2021

Nuances of buying housing in Istanbul: numbers and facts

CONTENT

• Introduction
• Geography and climate
• Business and industry
• Education, sport, culture
• Transport, infrastructure
• Istanbul elite locations
• Investment nuances into city real estate
• Districts
• 2020 indicators
• Real estate prices dynamics in Istanbul over the past 4 years
• Additional results of the year from TurkEstate portal

INTRODUCTION

For many centuries, Istanbul has been one of the most interesting megacities in the world. It is one of the world's business capitals, a major transport hub, and at the same time a beautiful city with an incredibly rich history. It is not surprising that there are many who want to move here. However, the payback periods here are sometimes longer than in other Turkish cities (for example, resort cities). But first things first.

We have no doubt that TurkEstate readers are well acquainted with Istanbul, at least in absentia. Nevertheless, just in case, let us recall some key facts about the great Constantinople and the current situation in the city.

GEOGRAPHY AND CLIMATE

Istanbul is the only city in the world located on two continents at once: Europe and Asia. It is the largest city in Turkey, although not the capital (since 1923, Ankara has become the capital). The European and Asian parts are connected by bridges and the Marmaray underground tunnel running through the Bosphorus. The main part of the city is located in Europe, it is mostly the office and tourist half of Istanbul; the smaller one is in Asia, where the Turks themselves often prefer to settle.

The European part of the city is divided approximately equally by the Golden Horn, over which several bridges are also thrown. The climate in Istanbul is close to subtropical, but the temperature drops due to strong winds are great. With summer heat, the average temperature in winter is theoretically from 3 to 9 degrees Celsius, but even in December and January it can change in a day or two from +25 to +5 degrees and back.

The absolute minimum temperature is minus 16.1 ° C (recorded on 9 February 1927), the absolute maximum is plus +40.5 ° C (12 July 2000). There are no beach areas in Istanbul; people go to swim in Şile or Princes' Islands (if we talk about the immediate vicinity).

Istanbul consists of 39 districts (ilçe), 25 of them are located in the European part of the city. Europe part is home to about 2/3 of metropolis population. According to the latest official statistics, the population is 15 529 267 people.

BUSINESS AND INDUSTRY

Since the end of the last century, the economy of Istanbul has been considered one of the fastest growing. By 2025, according to some forecasts, Istanbul will have become the 14^th city in the world in terms of GDP. It is this city that accounts for at least 27% of the GDP of whole Turkey and 20% of the entire labour force in the country; and it is here that about 40% of the country's taxes are collected. There are also about 30 billionaires living in Istanbul.

The city is home to the Istanbul Stock Exchange, the only one in Turkey that has united the former financial institutions: the Istanbul Gold Exchange and the Turkish Derivatives Exchange. Here are located both branches and head offices of dozens of large international companies, representative offices of foreign insurance companies, etc.

EDUCATION, SPORT, CULTURE

Several public and private higher educational institutions operate here. The most famous state ones are Istanbul University, Istanbul Technical University, Marmara University, Bosphorus University. Foreigners can also study here at universities, including for free (however, to do this they often have to obtain a scholarship and learn Turkish); there are no problems with paid education (in English). There are many different educational courses, colleges and other educational institutions, even Russian kindergartens and schools.

It is in Istanbul that the base of such famous football clubs as Beşiktaş, Galatasaray, Fenerbahçe are located. Many stadiums, one of the largest and newest is Beşiktaş in the area of ​​the same name (by the way, one of the most expensive in terms of real estate buying).

There are also hundreds of interesting museums and exhibitions in the city, and there are many free ones.

TRANSPORTATION, INFRASTRUCTURE

The transport system of Istanbul is very developed; several years ago, Marmaray was opened - an underwater tunnel between the European and Asian parts (the metro passes through it). The metro is expanding rapidly every year; in 2021, several more lines are expected to be opened or extended. In addition to the metro, there are buses, trams, metrobuses, funiculars; by water, you can get from Europe to Asia and back by ferries departing from the pier every few minutes, including transporting vehicles on them.

There is also a railway: the station in the Asian part connects Istanbul with many major cities of Anatolia. High-speed trains also run.

The city has two airports: Sabiha Gökçen (on the Asian side) and the New Airport (Yeni Havalimani), which replaced the recently closed Atatürk airport. Both air harbors are international, so you can choose flights taking considering further route or future place of residence in the city.

The main transport difficulty is traffic jams: if earlier, even at rush hour, one did not have to worry about getting on the plane on time - the metro journey from the city center to Atatürk airport took 45-50 minutes in any case - then the metro have not yet been laid from the New Airport, and you have to get by taxi or HAVAİST transfer buses, which just get stuck in traffic jams. And territorially, the New Airport is further from the center. 

However, the authorities promise to simplify the transfer to both airports in the near future, see the information on the link above.

ELITE ISTANBUL LOCATIONS

A selection of elite districts (and smaller formations in a territorial sense, i.e. quarters) of Istanbul.

These are: Beşiktaş, Bebek, Arnavutköy, Ortaköy, Etiler, Şişli, Levent, Kayikhane, Bakırköy, Beylikdüzü. What unites them is that they are almost located next to the Bosphorus, most are right along the coastline, literally a few meters from the embankment. But the specifics are different: from pronounced business to leisure. But living in all of them is considered prestigious.

INVESTMENT NUANCES INTO CITY REAL ESTATE

In terms of choice, there are no difficulties: Istanbul is actively being built, and it is also intensively expanding - after all, it is one of the fastest growing megacities on the planet. Every year, up to three dozen new streets are formed here, residential complexes, shopping centers and offices appear on empty land plots, the suburbs are becoming new Istanbul districts. Considering temporary or permanent visitors, the former Constantinople now needs up to 250 000 housing units (apartments or houses) every year. Moreover, a fair percentage of buyers or tenants are foreigners.

Many people buy housing in Istanbul precisely for the purpose of renting and / or subsequent resale: there is always a demand for apartments and houses here - business travelers, students, tourists coming to the city again, etc. However, in terms of investment, Istanbul is not the easiest city, and the return on investment is longer here than in other cities: up to 30 years or more, depending on the region. As a business city, Istanbul is prone to economic and global crises. So, in 2020, real estate sales to foreigners due to the pandemic fell by more than 8%, and interest sharply shifted from small apartments towards spacious residences or even houses with their own gardens.

Nevertheless, there are many who want to take the risk and invest in Istanbul real estate, because in November 2020, an annual increase in housing price was recorded here by 30.5%. And the average cost per square meter of residential real estate here is one and a half times higher than in other settlements of Turkey, or even more than one and a half times.

According to statistics collected by Tranio.ru, the most prestigious areas for investment in residential real estate are Beşiktaş and Sarıyer, both in the European part of Istanbul. Ortaköy, Taksim, Sultanahmet and Laleli are also popular. However, tenants who have tasted Istanbul and tend to a more comfortable and measured life often prefer other areas on the Asian side.

DISTRICTS

Districts advantages most in demand in terms of renting and buying real estate (not to be confused with the cost per square meter):

1. Besiktaş is one of the most green and modern areas on the shores of the Bosphorus. It is a business, cultural, sports and leisure center. It is here that the most beautiful palaces, the most expensive hotels and the most interesting museums are located. Istanbul residents themselves are very fond of buying houses with a view of the bay in the districts adjacent to Besiktaş - Bebek and Arnavutköy, which are rightfully considered to be the most picturesque.< br/>It is in Besiktaş that you can find impressive old mansions - also overlooking the Bosphorus - and even buy them. But be prepared that the price per square meter can exceed thousands of euros. 
2. Beyoğlu, the "embassy" district (consulates of a number of states are located here), is also considered elite. It is here that the famous İstiklâl Street, Taksim Square, Galata Tower are located; from here the Galata Bridge "starts" across the Golden Horn. This is one of the most popular tourist areas; accordingly, there are many hotels here, it is easy to rent flats and apartments, even rooms. The best quarters of Beyoğlu are Cihangir and Gümüşsuyu.
3. Sarıyer. The district neighbours three at once - Besiktaş, Kâğıthane and Eyüp. It is famous for its business spirit, many offices, Şişli shopping district and Maslak business district. One of the most prestigious and fashionable quarters of the city, Nişantaşı, is also located here.

Fatih is historical heart of the city, with the well-known quarters of Laleli, Sultanahmet and Eminönü, at least by hearsay. Laleli is considered to be “the most Russian”.

It is in Fatih that the key attractions of Istanbul are based: Hagia Sophia, Topkapi Palace, Süleymaniye and Sultanahmet Mosques, Hippodrome Square, Archaeological Museum, Museum of Islamic Art (former home of Ibrahim Pasha), famous parks and much more.

• Bakirköy, one of the oldest in Istanbul. If anyone is critical, there are significantly fewer foreigners here than in other areas.
• Kadiköy is perhaps the most ancient district of the city. It is in the Asian part, located near Sabiha Gökçen airport. It is here that there is a lot of housing for the so-called middle class, although residences overlooking the Bosphorus are not cheap here.
• Kartal, neighbor of Maltepe and Pendik districts. Kartal in the Asian part of Istanbul is a lot like Beylikdüzü in the European one. Now it is a densely populated residential area, however, as the authorities suspect, it is it that may soon become a new cultural and industrial center: not only new houses are constantly being built here, but also infrastructure facilities, office centers, new parks are being set up, dozens of restaurants, cinemas and shopping centers appear.
• Beylikdüzü is a popular middle-class district with a well-developed infrastructure. There are many new buildings here, so you can choose not "old" housing stock; many skyscrapers. However, keep in mind that Beylikdüzü is considered one of the most earthquake-prone areas in Istanbul, along with Avcilar and Maltepe. It is true, modern technologies of earthquake-resistant construction fully compensate for this.
• Ataşehir is another largely business district, near Kadiköy (Asian part). By the way, it is here that there are not so many public transport routes: most of the district inhabitants travel by car. There are many convenient parking lots in Ataşehir, including underground ones. By the way, both developers and local authorities take care of this.

Multi-storey construction is widespread in Ataşehir.

• Küçükçekmece is also famous for new high-rise buildings. But the district is being actively rebuilt, and there is still work to be done in terms of infrastructure. But there are almost no very old - and, accordingly, potentially emergency, albeit looking decent – buildings in the district: mass construction here began in the 80s of the last century.

Opinions where exactly it is worth buying a house in Istanbul vary up to the exact opposite. For example, Tranio analysts advised to adhere to the following principles:

• buy, then rent out - Beyoğlu, Besiktaş, Fatih;
• to buy in order to sell later at a higher price - Ataşehir, Beylikdüzü, Kartal, Küçükçekmece;
• buy in order to live by yourself, including families with children - Bakirköy, Kadiköy, Sariyer.

However, do not forget that the city is actively growing and developing, the districts balance is regularly changing. For example, a lot has changed with the closure of Atatürk Airport and New Airport opening. Thus, in order to understand what kind of housing you need and in which particular area, you will need expert advice. And also it is extremely desirable to have at least a short experience of personal living in the chosen district and quarter.

As for us, we trust the current data of the Turkish portal www.endeksa.com most of all. We present this portal figures in this article.

2020 INDICATORS

So, based on the results of home sales in Istanbul for 2020 (as of the end of December), the conclusions are as follows:

• As of the end of the year, real estate price for sale in Istanbul increased by 23.3% compared to a year ago. The average area of ​​units sold was 115 sq. m.
• The average cost per square meter at the end of December was 4 029 Turkish liras; investment return period is 21 years.
• If we consider the average annual indicators, then the greatest value in terms of residential real estate in Istanbul was shown by Adalar, Bakirköy, Besiktaş, Beykoz, Beyoğlu (in descending order).
• The fastest repayable housing, at the end of the year, is in Sultangazi, Sancaktepe, Esenyurt, Çekmeköy and Beylikdüzü districts (also in descending order).
• On the contrary, the most slowly paying off housing is in Adalar, Bakirköy, Besiktaş, Beykoz and Beyoğlu.

REAL ESTATE PRICES DYNAMICS IN ISTANBUL OVER THE PAST 4 YEARS

From January 2017 to May 2020, the average price was kept around 3 800 Turkish lira (in the range from 3 400 to 3 900 TL), however, starting from May 2020, the tariff per square meter has steadily gone up having reached 4 286 TL by December. In the next couple of months, analysts predict an even higher rise.

The total increase in the cost per square meter for the year was 23.3%; in two years - 11.79%; over four years - 11.76%.

The price per square meter (by districts) ranges from 2 526 TL per 1 m² to 12 385 TL per 1 m².

Here is the last recorded average price for the main list (26) of  Istanbul districts, as of December 2020, in ascending order. The cheapest was Esenyurt – 2 526 TL. By the way, it was this area that became the leader in housing sale throughout Turkey at the end of the year.

The difference from district to district in the average price in most cases is minimal - in the region of one and a half, or even several tens of liras.

Esenyurt is followed by:

- Arnavutköy = 2 631 TL;

- Silivri = 2 806 TL;

- Sultangazi = 2 834 TL;

- Sultanbeyli = 2 933 TL;

- Beylikdüzü = 2 959 TL;

- Çatalca = 3 106 TL;

- Avcılar = 3 200 TL;

- Gaziosmanpaşa = 3 307 TL;

- Esenler = 3 320 TL;

- Bahçelievler = 3 507 TL;

- Büyükçekmece = 3 811 TL;

- Kartal = 3 922 TL;

- Ümraniye = 3 950 TL;

- Bayrampaşa = 3 968 TL;

- Şile = 4 380 TL;

- Fatih = 4 387 TL;

- Maltepe = 4418 TL;

- Eyüpsultan = 4 499 TL;

- Başakşehir = 5 010 TL;

- Ataşehir = 5 105 TL;

- Üsküdar = 5 175 TL;

- Kadıköy = 8 817 TL;

- Beykoz = 9 205 TL;

- Sarıyer = 11 968 TL;

- Beşiktaş = 12 385 TL.

You can see exact average prices for each of the 39 districts (as of December 2020), average price for the year, return on investment and change in price in the table below.

Districts are listed alphabetically; TurkEstate has selected the most attractive numbers in terms of return on investment and price growth especially for you.

ADDITIONAL RESULTS OF THE YEAR IN ISTANBUL FROM TURKESTATE PORTAL

In 2020 Istanbul ranked first in terms of housing sales out of all settlements: 265 098 transactions, or 17.7% of total sales. Istanbul is followed by Ankara (157 095 transactions, or 10.5%) and Izmir (93 457 transactions, or 6.2%).

Least of all houses were sold in Ardahan - 192 transactions per year.

Esenyurt (the European part of the city) is added to the leaders in transactions. Especially a lot of sales over the past year were observed in the Istanbul districts of Beylikdüzü, Başakşehir, Küçükçekmece (Europe) and Kadıköy, Pendik, Sancaktepe, Ümraniye, Maltepe and Kartal (Asia). This transactions number was influenced to a large extent by the state support program, and, as a result, by reduced interest rates on loans.