Recent reports from Turkish media highlight the authorities’ success in curbing the steep frantic rise in rental prices recorded over the past 18 months, especially since the onset of the armed confrontation between Russia and Ukraine. Furthermore, rental rates have slightly decreased in some areas of the country. We will explain why this news should be encouraging for current and future investors and we’ll provide insight into the current state of rental prices in Istanbul, paying attention to the dynamics over the past year.
Content:
- Stabilising rental prices
- How have the rental rates changed?
- Istanbul is more expensive than Manhattan
- What happened six months ago?
- The average rental rates per square metre for Istanbul, based on the dynamics observed over the past 1.5 years:
- A table of selected districts in Istanbul
- A Brief Conclusion:
Stabilising rental prices
There has been a slight decrease in rental rates for the first time in three years. Why should this make those planning to earn money by renting their properties so happy? The reason is the forthcoming regulations of short-term rentals in Turkey which aim to reduce the number of fraudsters, fake ads, etc. Such violations are punishable by law. Previously, social networks were flooded with disheartening posts recounting negative experiences of renting properties in the preceding months, deterring potential tenants from renting apartments and houses in Turkey. This included residents who relocated to live with their relatives while waiting for the rental market to stabilise, conscientious and solvent project staff and remote workers like digital nomads. With the rental market becoming more orderly, individuals who sought refuge with friends and relatives are likely to feel more secure and explore long-term rental housing options.
Mustafa Hakan Özelmacıklı, one of the recognised experts on investment-attractive real estate in Turkey, stated that the temporary settlement introduced by the Ministry of Tourism has produced results. Several tens of thousands of residences will be transferred from short-term to long-term rentals. Moreover, this process is underway in the most popular locations such as Istanbul and Antalya. Mersin has also recorded a slight decline.
How have the rental rates changed?
Turkey has recorded a 10-15% decrease in prices compared to recent rates. For instance, a typical 100 square metre apartment in Istanbul was recently rented for 15,000 TL per month. However, you can now find similar residences in terms of area, location and conditions for 13,000 TL. Therefore, Mustafa Hakan Özelmacıklı refers to these rental rates as "more reasonable."
The expert also confirmed the trend we mentioned of extending the median rental period: "The average rental period, which used to be 7-10 days, has increased to 1.5-2 months." Meanwhile, Mr Özelmacıklı pointed out, based on his own long-term experience, that the increase in rental prices will neither be intense nor significantly reduced: it’s likely to take a "horizontal course".
Istanbul is more expensive than Manhattan
We made no mistake: rental rates in some of Istanbul’s most sought-after neighbourhoods have equaled those in Manhattan.
The board member of the İstoç Businessmen Association, real estate expert Şenay Araç, reports, based on research of the rental market in Manhattan and the surrounding area, that the rent is about USD 1,450 in the "low-priced" areas of the US’s most populous district. Additional fees (such as the Turkish aidat, but also including electricity, water and gas consumption in America) are USD 550. These are 42,200 Turkish lira (TL) and 16,000 TL, respectively.
To be clear, this is not a mansion but a modest apartment in Manhattan. However, below are the prices for typical Turkish multi-bedroom apartments in Istanbul’s selected areas:
Maslak
3+1 – 60,000 TL, aidat 4,200 TL (equivalent to USD 2,060 and USD 144);
4+1 – 90,000 TL, aidat 6,500 TL (USD 3,090 and USD 223).
Seyrantepe
3+1 – 90,000 TL (USD 3,090), aidat 5,000 TL;
4+1 – 110,000 TL (USD 3,778), aidat 6,500 TL.
Halkalı
3+1 – 50,000 TL (USD 1,717), aidat 5,000 TL;
4+1 – 75,000 TL (USD 2,576).
Ümraniye
3+1 – 46,000 TL (USD 1,580).
Bağcılar
4+1 – 35,000 TL (USD 1,200).
Sancaktepe
3+1 – 35,000 TL (USD 1,200);
4+1 – 50,000 TL (USD 1,717).
Ataköy (sea view)
3+1 – 140,000 TL (USD 4,808);
4+1 – 200,000 TL (USD 6,870).
What happened six months ago?
A trend that remains relevant to this day is the increased demand for small flats in Turkey. Consequently, the "finest hour" has come for those who invested in modest residences in megacities for renting purposes.
While the average rent in Istanbul in the spring was 13,000 TL, it was challenging to find a residence of over 40 square metres for this amount. It’s essential to recall that the size of a "typical apartment" in Turkey typically ranges from 100 to 110 square metres.
Sarıyer was featured on the list of areas with "small housing offers in popular areas". Here, you could find several tiny residences of 36 square metres by Turkish standards for 10,000 TL. Similarly, in the districts of Beşiktaş (39 m2), Beyoğlu (52 m2), Kadıköy (53 m2) and Şişli (55 m2), one might find a somewhat worn-out property for the same amount if you search very carefully. However, these areas are located in the heart of Istanbul and are in high demand.
Silivri emerged as the most affordable, offering 167 square metre apartments in development projects in Turkey for 10,000 TL in the autumn of 2023. It is followed by Arnavutköy (152 m2), Çatalca (145 m2), Sultanbeyli (139 m2) and Sultangazi (130 m2).
Here are the latest statistics from the Endeksa analytical portal on rental rates in the largest Turkish metropolis (these figures are based on data for December 2023, as of November 2023).
- The average rental price is USD 6 per 1 m2;
- The average housing area is 100 m2;
- The average monthly rent per housing unit is USD 590;
- The average payback period for housing investments is 19 years.
The average rental rates per square metre for Istanbul, based on the dynamics observed over the past 1.5 years:
- July 2022 – USD 4.65
- August 2022 – USD 4.57
- September 2022 – USD 4.7
- October 2022 – USD 4.79
- November 2022 – USD 4.99
- December 2022 – USD 5.3
- January 2023 – USD 5.68
- February 2023 – USD 6.09
- March 2023 – USD 6.45
- April 2023 – USD 6.77
- May 2023 – USD 7.28
- June 2023 – USD 7.28
- July 2023 – USD6.25
- August 2023 – USD 6.23
- September 2023 – USD 6.37
- October 2023 – USD 6.22
- November 2023 – USD 6.05
A table of selected districts in Istanbul
| District | The average rental price per m2 (USD, November 2023) | The average monthly rental rate (per housing unit) | Housing investment return period | Annual change (increase) |
|---|---|---|---|---|
| Adalar (Princes' Islands) | 8 | No data | No data | No data |
| Bakırköy | 8 | 989 | 28 | 47.68% |
| Beşiktaş | 11 | 1,360 | 28 | 43.42% |
| Beykoz | 6 | 841 | 41 | 76.14% |
| Beyoğlu | 9 | 808 | 18 | 35.18% |
| Çatalca | 5 | No data | No data | No data |
| Eyüp Sultan | 7 | 696 | 19 | 56.57% |
| Fatih | 6 | 475 | 17 | 46.54% |
| Gaziosmanpaşa | 6 | 575 | 16 | 56.01% |
| Kadıköy | 9 | 1,103 | 25 | 56.4% |
| Kartal | 6 | 656 | 20 | 72.13% |
| Sarıyer | 13 | 1,580 | 27 | 42.27% |
| Silivri | 4 | 441 | 20 | 116.1% |
| Şile | 6 | 664 | 29 | 101.02% |
| Şişli | 8 | 754 | 19 | 41.13% |
| Üsküdar | 7 | 682 | 26 | 61.97% |
| Zeytinburnu | 5 | 560 | 23 | 65.73% |
| Buyukcekmece | 5 | 560 | 23 | 65.73% |
| Kağıthane | 7 | 693 | 18 | 41.91% |
| Küçükçekmece | 6 | 596 | 17 | 68% |
| Pendik | 6 | 564 | 17 | 89.71% |
| Ümraniye | 6 | 627 | 19 | 81.35% |
| Bayrampaşa | 6 | 517 | 18 | 75.18% |
| Avcılar | 5 | 507 | 20 | 58.08% |
| Bağcılar | 5 | 459 | 21 | 50.16% |
| Bahçelievler | 5 | 476 | 18 | 55.15% |
| Güngören | 5 | 470 | 17 | 60.53% |
| Maltepe | 7 | 664 | 21 | 67.57% |
| Sultanbeyli | 5 | 466 | 18 | 94.73% |
| Tuzla | 6 | 593 | 18 | 91.29% |
| Esenler | 5 | 457 | 20 | 45.38% |
| Arnavutköy | 4 | 405 | 19 | 85.43% |
| Ataşehir | 7 | 728 | 19 | 68.08% |
| Başakşehir | 6 | 728 | 21 | 69.08% |
| Beylikdüzü | 5 | 655 | 17 | 54.35% |
| Çekmeköy | 6 | 600 | 17 | 90.79% |
| Esenyurt | 4 | 406 | 14 | 55.16% |
| Sancaktepe | 5 | 508 | 17 | 93.56% |
| Sultangazi | 4 | 430 | 18 | 71.2% |
A Brief Conclusion:
- In Istanbul, housinginvestment for rental purposes is paid off faster in Esenyurt (14 years). The payback period for rental housing is observed in Beykoz (41 years), Bakırköy and Beşiktaş (28 years each).
- The most expensive rentals are in Sarıyer (averaging USD 1,580 per month) and Beşiktaş (USD 1,360). The lowest prices are in Arnavutköy (USD 405), Esenyurt (USD 406), Sultangazi (USD 430) and Silivri (USD 441).
- Over the past year, the highest increase in rental housing prices has been observed in Silivri (116.1%), Şile (101.02%) and Sultanbeyli (94.73%).