A challenging scenario has emerged in Turkey's rental housing sector in the past few years, especially since the start of the pandemic. Moreover, this applies to the guests: rapidly rising rents and inflation create a lot of problems for them, and the range of apartments and houses for rent in popular cities and districts is decreasing.
Property owners who rent out their residences receive a double financial benefit: their apartments in Turkey grow in price and generate income. Meanwhile, foreign owners can rent out their homes for both long and short term. The main thing is to comply with local legislation.
Today, Turk Estate shares the latest statistics on sales and rentals of residential real estate in different segments and cities, including the most relevant – December and January – indicators.
The dynamics over the year and in recent months, especially in January, gives a great opportunity to sort out this issue: where it makes sense to look for and buy residences.
Content:
- Home prices keep going up
- Buyers’ and tenants' requests in January 2024
- Sought-after provinces and rate changes in January
- The most popular areas of major cities
- 2023 rental rate dynamics: the most popular cities and locations
- Why do you need to buy property right now?
Home prices keep going up
- As for the year’s outcomes, housing prices in Turkey increased by 75.5% in 12 months. This growth will definitely go on, although the dynamics in certain months and quarters may be different.
- According to official data announced by the Central Bank of the Republic of Turkey, the housing price index (HPI) rose by 1.1% in December 2023, and by 75.5% over the year.
- If you look at the three largest megacities, Istanbul, Ankara and Izmir saw growth of 0.1%, 2.5% and 3.5%, respectively in November compared to last month.
- Compared to the same month last year, the index values rose by 61.8% in Istanbul, 92.3% in Ankara and 75.6% in Izmir.
Buyers’ and tenants' requests in January 2024
Summing up the data from the TÜIK Institute of Statistics, 80,308 housing units were sold in Turkey in the first month of this year. Istanbul saw the greatest demand: almost 13,500, or 16.7%. Half as many properties were purchased in Ankara: 6,700 residences (8.4%). The resort capital of Antalya ranked third in demand with 5,300 units sold (6.5%).
Foreigners have purchased 2,061 residences, which is 2.6% of the total number of transactions. On the contrary, Antalya is in the first place: 747 properties, or more than a third. Istanbul ranks second with a minimal gap (37 residential units): 710. Mersin, which is rapidly becoming popular, is in third place with 211 sales.
Here are the top 10 provinces most in demand among overseas investors by the end of January:
- Antalya: 747 units;
- Istanbul: 710 units;
- Mersin: 211 units;
- Ankara: 49 units;
- Bursa: 49 units;
- Yalova: 45 units;
- Sakarya: 36 units;
- Izmir: 32 units;
- Kocaeli: 31 units;
- Trabzon: 29 units.
Russians buy more than citizens of any other country not conceding the championship since the spring of 2022. Russian citizens purchased 555 units of apartments in development projects in Turkey in January. Iran is in second place (208), Ukraine is in third place (127), Iraq and Kazakhstan rank fourth (99 each).
More detailed statistics for the last month are available right here.
As far as the Turkish population is concerned, the proportion of homeowners has been declining steadily in recent years, although not too quickly: it used to be above 60% but has fallen to 58%. This means that 42% of families are permanent tenants.
So, the statistics provided by another specialized real estate portal, Emlakjet, are not surprising: 43% of visitors to the portal, which hosts almost 350,000 (!) ads for the sale and lease of residential real estate, were interested in renting in January 2024.
According to personal data, women are more likely to seek housing than men: 61% versus 39%, respectively.
Sought-after provinces and rate changes in January
| Province | Price change (housing for sale, per month) | Change in price (housing for rent, per month) |
|---|---|---|
| Istanbul | +3% | +3% |
| Ankara | +2% | +4% |
| Izmir | +3% | 0% |
| Antalya | +1% | 0% |
| Bursa | +4% | 0% |
| Diyarbakır | -2% | -4% |
| Aydın | -2% | +8% |
| Mersin | -1% | +4% |
| Konya | 0% | 0% |
| Tekirdağ | 0% | +10% |
The most popular areas of major cities
| City/district | Price change (housing for sale, per month) | Price change (housing for rent, per month) |
|---|---|---|
| Ankara/Çankaya | +3% | +3% |
| Ankara/Keçiören | 0% | +2% |
| Diyarbakır/Bağlar | 0% | -4% |
| Istanbul/Esenyurt | 0% | 0% |
| Gaziantep/Şahinbey | +4% | 0% |
| Ankara/Mamak | 0% | +4% |
| Bursa/Osmangazi | +3% | 0% |
| Ankara/Sincan | +2% | +2% |
| Izmir/Buca | 0% | +5% |
| Balıkesir/Edremit | +2% | +8% |
Tolga İdikat, CEO of Emlakjet, confirmed that rising rental prices in many megacities, especially in Istanbul, provoked the migration of tenants (which we discussed here) from the central areas of the metropolis to the suburbs. The mismatch between supply and demand – the predominance of the former over the latter – will cause prices to rise by 60–70% this year alone.
The Turk Estate portal has also repeatedly reported that those who cannot afford housing in Istanbul, even on the outskirts, are moving to less sought-after cities in the province or other parts of the country.
Here is one-year dynamics.
2023 rental rate dynamics: the most popular cities and locations
The average rental demand in Turkey increased by 13.3% between December 2023 and January 2024.
According to Endeksa, the leading real estate analytics portal, rental prices in Antalya, Mugla and Trabzon increased by about 1% in December and by an average of 4% per month in other major cities. As of December 2023, the average fixed rental price in Turkey was TL 14,472 ($456) per unit (one residence) and TL 128 ($4) per 1 sq. m.
As for the areas, the average rent per housing unit in Istanbul was TL 17,594 ($555) in December, and the cost of renting one sq. m was TL 176 ($5.6). Let's be clear that given the size of the metropolis, the price varies by district, as in other large cities.
For example, the cost of renting 1 sq. m in December in Şile decreased by 3% dropping to TL 165 ($5.2). There was a 2% reduction in Başakşehir and Küçükçekmece, to TL 181 ($5.7) and TL 168 ($5.3), respectively, while the growth keeps going in central and popular areas. So, rent in Beşiktaş rose by 6%, to TL 331 ($10.4) on average; in Beyoğlu and Sarıyer – by about 5%, to TL 267 ($8.4) and TL 382 ($12), respectively.
However, rental prices increased by 100% or more in many provinces of Turkey over the year — from January to December 2023.
The final average price of housing in Mugla, Turkey's second most expensive province (in rental rates), is TL 16,399 ($517).
Izmir, another important city on the Aegean Sea in terms of rents, added 119% in 2023. This figure was +4% by the end of December alone. The current average rent per unit in the city by the end of 2023 was TL 15,926 ($502), or an average of TL 145 ($4.6) per sq. m. As for the districts, Bergama became the champion in raising rents in Izmir in December: +6% per month, the average cost of rental housing there was TL 12,200 ($385).
Of course, Antalya remains one of the most dynamically developing cities in the Mediterranean region in the real estate market. The average rental price per sq. m here is TL 145 ($4.6), and rental rates in December decreased only in Gazipaşa by 5%.
The rental price per housing unit in Ankara was TL 14,188 ($447) and TL 118 ($3.7) per sq. m. The capital is a specific region — prices here jump throughout the year and not like in other provinces. For example, there was a 21% increase in the cost in February 2023 — the rate per sq. m was from TL 52 ($1.6) to TL 63 ($2). However, rental rates fell by 2% in November, and they rose again by 4% in December restoring losses. The growth may have decreased in speed, but it is still ongoing.
Prices in Bursa rose by 2% in December and by 125% over the year. The average rate per residence by the end of 2023 was TL 13,309 ($419), and the cost per sq. m was TL 111 ($3.5).
The student city of Eskişehir is another location completed 2023 with the most impressive figures — +152% to rental rates for the year, or +3% for December alone. The average rent in Eskişehir by the end of 2023 reached TL 10,162 ($320) and TL 103 ($3.3) per sq. m.
Trabzon, one of the Black Sea region’s largest cities, has also distinguished itself. The location saw a 146% increase in rental rates last year. As of December 2023, the average rent for housing in Trabzon was TL 11,046 ($348) and TL 78 ($2.5) per sq. m.
Why do you need to buy property right now?
The Centre for Economic and Social Research of the University of Başakşehir (BETAM) in partnership with Sahibinden.com, Turkey's leading online home sale and rental platform, have assessed the price dynamics in recent months.
The number of transactions significantly decreased in January compared to January 2023. Because of this, housing has also temporarily fallen in price, for example, by 5.5% on average in the country, 10% in Istanbul and 7% in Izmir. This is despite the fact that prices have risen by 55.7% over the year. Moreover, this figure was -8.6% in Istanbul, -9.2% in Ankara and -7.5% in Izmir last month alone (in January 2024 compared to December 2023).
Meanwhile, the number of real estate listings increased in Ankara and Izmir (although it decreased in Istanbul) with a shortage of rental housing.
So, it is high time to take advantage of this subsidence for those planned to purchase residential real estate in Turkey: sellers will be much more accommodating, at least until spring. If there is no discount, you can ask for instalments, etc. Sometimes, you can ask for both a discount and an instalment payment.
After the purchase, you can rent out your residence, especially in the high season. An important feature of demand in the rental housing market is its seasonality. The demand, which increases between April and September, decreases in the following months and remains relatively stable in winter. It is predicted that those who have moved from the province and university students will also have an impact on increasing demand for rental housing in the spring and summer. So, seasonal factors should not be neglected.
The local population renting housing all year round should not be discounted as well: Görkem Öğüt, founder and CEO of Endeksa, recalled that under the new rules, rental subsidies (amounts provided to those in need to compensate for part of the cost of renting an apartment) were increased to TL 5,500 ($173) in Istanbul, TL 4,500 ($142) in Ankara, Antalya, Bursa and Izmir, TL 3,750 ($118) in other major cities and TL 3,000 ($94.6) in towns. "Such an increase in government support may provoke a wave of migration of new tenants and increase confidence in the rental housing market. This is not a step that can lead to a sharp change in prices, but it can be considered as a positive event for both tenants and owners," the expert assured.