The results of sales of real estate in Turkey for November 2024 will be published as soon as possible. With the results of 10 months available, analysts can summarise the results of the incomplete year. December will no longer be able to affect these trends significantly; it will only adjust the figures obtained.
So, what do you remember about 2024 in the field of residential real estate? Let’s take a look.
Content:
- General revival in mortgage transactions
- GDP and house prices for sale
- Rent
- Number of real estate transactions
- Expectations
- Forecasts of the results of the year
General revival in mortgage transactions
After a noticeable sales stagnation at the beginning of the year, the market has noticeably revived since September. The number of mortgage transactions has increased, which has been at a minimum for many months. Moreover, the situation is typical for all provinces without exception. Compared to the autumn of 2023, the volume of mortgage loans issued increased by about 3.7 times. Mortgage deals in October were 278.2% more than the previous year. Of the 81 provinces, 80 showed triple-digit growth, and one showed four-digit growth: Kahramanmaraş, where the increase in mortgage deals reached 1,063%. It is followed by Çankırı (800%), Malatya and Muş (750% each), Osmaniye (584%), Adana (491%), Hatay (464%), Gaziantep (461%), Karabük (445%), Giresun (433%), Bartın (427%), Bayburt (400%) and Bolu (345%).
Of the tourist settlements (cities, not provinces), Antalya (an increase of 455% in mortgage transactions) and Mersin (310%) showed good indicators. Both cities are almost monthly leaders in terms of housing sales to foreigners.
Istanbul is popular as well with the largest number of housing deals concluded here every month. As such, mortgage sales have increased by 277.8% over the year.
GDP and house prices for sale
According to the 2024 report of the Organization for Economic Cooperation and Development (OECD), the growth rate of Turkey's gross domestic product (GDP) per capita varies from province to province, and the difference between megacities and rural areas is noticeable. In terms of GDP adjusted for inflation, the cities of Gaziantep, Adıyaman and Kilis are in the lead (at 8.5%). Next are Adana and Mersin (7.65% each), followed by Kırıkkale, Aksaray, Niğde, Nevşehir and Kırşehir (6.58%), followed by two of the largest megacities, Izmir (5.98%) and Istanbul (5.44%).
The cost of housing in megacities is on average two times higher than in small towns. As specified by the analytical portal Endeksa in the report on the results of October 2024, property prices are rising relative to monthly inflation. The value of housing has increased by 26% over the past year and by two percent over the past month, but decreased to 15% in real terms (adjusted for inflation), depending on the region.
As specified in Endeksa in October, the average selling price per square metre of housing in Turkey is TL 28,027 (USD 800) per square metre, while the average cost per unit of housing in the country is TL 3.7 million (USD 105,700). The average return on investment in housing is 13 years.
In terms of metropolitan areas, housing in Izmir has risen in price by 29% in nominal value, while there has been a 13% decrease in value in real terms. The average price per square metre of housing in Izmir is TL 36,689 (USD 1,048), while the average price per unit is TL 4.6 million (USD 131,500).
Residential real estate in Ankara also rose in price by 29%, with an annual price change of 14% in real terms. The average selling price per square metre of housing in the capital in October was TL 23,676 (USD 676), while the average price per unit of housing was TL 3.1 million (USD 88,500).
The annual nominal growth in Istanbul was 27%, while there was a decrease of 15% in real terms. The average selling price per square metre of residential real estate is TL 42,526 (USD 1,214), while the average cost per housing unit is TL 4.8 million (USD 137,000).
Despite an annual nominal growth of 19%, prices in Antalya, the resort capital, decreased by 20% in real terms because of inflation. The average cost per square metre of housing in Antalya is TL 36,507 (USD 1,043), and the average apartment price is TL 4.2 million (USD 120,000).
The highest selling prices throughout Turkey are observed in Mugla with the average cost per square metre being TL 62,820 (USD 1,794), and the average price per housing unit is TL 8 million (USD 228,500).
The lowest prices are in Mus. Here, the average price per square metre is TL 13,821 (USD 395), and the average price per apartment is TL 2.2 million (USD 63,000).
Another report from Sahibindex, prepared in collaboration with the Centre for Economic and Social Research at the University of Bahçeşehir (BETAM), coincides with Endeksa statistics but differs slightly in some ways. First, it shows that the annual rate of change in real prices at the beginning of October (a month earlier) was 17.9% across the country, with 18.5% for Istanbul, 16.1% for Ankara and 14.8% for Izmir. The annual growth rate of current prices increased by 0.3 points in the country compared to September 2024, reaching 21.9% over the year in October.
Sahibindex writes that the average current price per square metre of houses in Turkey was TL 31,097 (USD 888). The increase in nominal terms (without adjusting for inflation) was 21% for the year in Istanbul, 24.7% in Ankara and 26.7% in Izmir. The average cost per square metre in October was TL 42,529 (USD 1,215) in Istanbul, TL 24,045 (USD 687) in Ankara and TL 36,538 (USD 1,043) in Izmir.
The real price index decreased by 1.2% in Istanbul and 0.6% in Izmir from September to October. It increased by 1.6% in Ankara.
Rent
According to Endeksa, rental prices in October grew by 46% over the past 12 months. There was a decrease of two percent in real terms (adjusted for inflation) compared to last year and three percent compared to the previous month (September 2024). The average cost of renting a square metre of housing in Turkey is TL 178 (USD 5), and the average rent for an apartment in the country is TL 19,534 (USD 558).
If you look at Ankara, Istanbul and Izmir, the annual nominal change in rental prices ranges from 49% to 56%. Adjusted for inflation, prices in Istanbul have not changed, but Ankara and Izmir have risen in price from three to five percent.
Sahibindex claims that when the 25% rate increase limit was still in effect, the annual rate of change in average real rents peaked at 86.6% over 12 months in February 2023.
The dynamics began to decline in 2024, but the decline in rents in real terms (adjusted for inflation) slowed down after May. According to October data, the annual change in real rental prices was 2.1%. Moreover, the price increase amounted to high percentages in nominal terms – up to 65%.
Number of real estate transactions
The highest rate of monthly sales of residential real estate was recorded in October 2024. Not only for 2024, but for about the last three years: Analysts note that investors are ready to buy houses and apartments in Turkey and expect a repeat of the sharp rise in housing prices that took place in 2022.
165,138 properties sold in Turkey during October 2024, which are 76% more than in October 2023. Moreover, sales have been growing steadily since July 2024. If we compare the total number of home sales in the first 10 months of 2023, there is an increase of 12%, while the annual growth rate of total sales in the last three months (quarter) is approximately 40%.
As of September 2024, the cost of housing at the national level increased by 26.1% year-on-year, while the consumer price index (CPI) was 49.8%, and interest on a simple deposit amounted to 54.42% over the same period. Although the annual increase in gold prices was approximately 78%, the exchange rate (US dollar) grew at the same rate as the cost of housing.
If we compare it with another investment instrument (cryptocurrency), the average typical apartment in Turkey is priced at one Bitcoin.
Expectations
Experts believe that a limited range of housing available for purchase may further increase property prices. This will be while waiting for a reduction in both the discount rate and interest on loans available to the public. As a result, the pent-up demand for housing then began in late spring and manifested itself in the second half of the year, as predicted.
Monthly home sales in the first half of the year only twice exceeded the long-term average of 100,000 units per month. This figure reached the threshold of 160,000 in the autumn.
Developers also helped stimulate sales during periods when the number of transactions was lower than expected by launching various advertising campaigns with preferential terms and extending instalments, among others. Thus, more complexes offer interest-free instalments for the remaining amounts (after the initial payment) due a year or two after the housing is put into operation. Previously, such conditions were offered only after the residential complex was finished.
Forecasts of the results of the year
Market players expect positive November and December statistics and have high hopes for the results of the year. These are first in the context of the sales revival, which is gaining momentum, and second, many potential buyers are trying to spend their money, especially in lira, before the New Year with the rise in prices of materials, construction costs, taxes, and, as a result, higher property prices.
Moreover, October showed an increase in all categories, including mortgage and non-mortgage transactions and new and secondary buildings, from 63% to 97.3% compared to October 2023 and from 8.3% to 20.7% in 10 months of the year compared to the same period in 2023.
The number of residential property purchase and sale transactions in November and December should not significantly affect these trends but rather identify them more clearly. According to experts, the total volume of real estate sold in 2024 (land, offices, apartments, etc.) should exceed at least 1.3 million units.