Turkey's real estate market: October 2023

We're sharing figures and trends in the residential real estate in Turkey for the first 10 months of 2023.

In October 2023, housing sales fell by 9% both monthly and annually (over 12 months); the pace of price increases slowed down.

However, the annual dynamics showed a +103% increase, with +5% in October alone.

In the month, 93,761 properties were sold in the country. Based on data from the Turkish Statistical Institute, analysts believe the trend of declining sales and rising prices dominating the Turkish real estate market will continue, albeit at a slower pace.

Content:

• October results:
• Data for the top 30 provinces (ranked by decreasing number of transactions)
• Brief conclusions
• Trend #1
• Trend #2
• Trend #3

October results:

• The average price per housing unit in Turkey was TL 3,040,440;
• The average sales price per square metre in the country was TL 23,388;
• The payback period for investments in Turkish residential real estate was 17 years (in the summer it was approximately 16.5 years);
• The overall decrease in transactions was largely influenced by new credit policies: high mortgage rates for locals and a small maximum loan amount, except the purchase of a first and only home. Currently, few people other than professional investors and foreign buyers can afford to purchase an apartment in Turkey as a means of preserving funds. Not surprisingly, the volume of mortgage transactions decreased by 34% compared to September and by 58% compared to October 2022.
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Nevertheless, real estate in megacities remains highly sought after and continues to rapidly increase in price:

• In Ankara, the cost of residential real estate increased by 122% over the year, with the price per square metre now at TL 19,221, and per unit – TL 2,498,730.
• Izmir follows, with an increase of +98%. The cost per square metre – TL 29,609, with the average property price – TL 3,849,170.
• Istanbul is in third place, with a +90% increase. Housing here is more expensive than in Izmir: Istanbul remains in the spotlight of investors worldwide. The average price per square metre – TL 35,497, and the average cost of a residence – TL 4,224,143.

Data for the top 30 provinces (ranked by decreasing number of transactions)

Brief conclusions

• The top 5 most expensive provinces for the cost of 1 square metre of housing remain unchanged, with only the price per square metre increasing. These are Mugla (£5,430), Istanbul (£3,550), Antalya (£3,230), Aydın (£3,130), and Izmir (£2,960).
• Mugla leads in the average price per housing unit, significantly higher at £700,000. This is followed by Aydin (£450,000), Istanbul (£420,000), Antalya (£390,000), and Izmir (£380,000).
• The fastest return on real estate investment is currently in Ankara, at 15 years. In Tekirdag, Manisa, and Eskisehir, it's around 16 years;
• The longest time to recoup investments is in Mugla (28 years) and Aydin (24 years), due to the high cost of property.
• The fastest price increase is in Hatay, one of the provinces most affected by the February earthquake. Here, the annual price increase for intact or newly reconstructed housing in new development projects in Turkey is 152%.
• Besides Hatay, Elazıg (125%) and Ankara (122%) are also in the top 3 for the fastest growing property prices.
• In Hatay, the average price for 1 square metre has reached £1,784 over the past year, per unit at £272,997.
• In Elazıg, the most valuable location in the east, the average price for 1 square metre is £1,144, per unit at £193,403.

Several local trends are also worth noting.

Trend #1

If you are interested in resort properties, we recommend visiting the city of your choice to look around, or assign this task to a trusted local representative. The reason is that due to many expatriates leaving Turkey – especially from resort areas – a significant number of apartments, previously rented out, are now vacant. Finding new tenants for several months or half a year among the locals is quite challenging, and landlords are hesitant to sign annual contracts with the option to renew, as this only allows them to increase the rent by a maximum of 25% per year. Inflation is eroding all profits.

Therefore, those owning multiple apartments have put them up for sale, leading to a 5–7% decrease in secondary market prices in some locations. Even if it's not immediately apparent from listings, feel free to ask sellers for such a discount.

Trend #2

There's a notable decrease in property prices in a specific province - Eskişehir. This location may not be too familiar to Russian buyers. It's a university town, home to numerous higher education institutions. If someone is considering relocating with their family for educational opportunities in Turkey, or looking to invest in real estate for year-round rental - though not at the highest rates, but steadily (students, in this regard, are a very reliable demographic) - Eskişehir is worth a closer look.

Gazi Çelik, the President of the Eskişehir Real Estate Agents Chamber, has stated that "now is the time to invest in property": in the last six months, housing prices in this area have dropped by up to 20%! This presents a great investment opportunity to purchase apartments at an affordable price. "Sales are stagnating," the expert added, so there's no need to rush into buying – there's time to explore options and make a well-informed decision.

Here are some examples of prices by district:

• In Camlica, prices range from 2 million to TL 4 million;
• In Sütcüler and 71 Evler, they range from TL 2 million to TL 3.5 million;
• In Batikent, from TL 3.5 million to TL 7.5 million;
• In Sultaniye, from TL 4 million to TL 5.5 million;
• In Visnelik, from TL 3 million to TL 7 million;
• In Sümer, from TL 3 million to TL 10 million.

Trend #3

The Aegean Coast is the clear favourite.

In terms of property purchases, this region remains the undisputed favourite after Istanbul. In the first three quarters of 2023 alone, 140,953 residential units were sold on the Aegean coast.

• Izmir leads in sales volume, with 48,002 properties sold in nine months.
• Following closely is Balikesir, overtaking Aydin with 20,994 residences sold from January to September.
• Aydın is not far behind with 19,795 sales.
• The least number of sales were in Usak: 3,928 transactions.

The region is popular among foreigners: three Aegean cities are in the top 10 for sales to foreign nationals. From January to September 2023, 598 residences were sold to foreigners in Izmir, 487 in Mugla, and 383 in Aydin.

If you're interested in these provinces, it's wise to decide soon: analysts believe prices will rise again shortly. Construction costs have increased, and less new housing is being built – meaning the market supply is diminishing with unchanged demand.

At the end of the first quarter of 2023, Izmir became the second city globally with the highest price increase – 133%. This major Turkish city is popular also because it has attracted skilled migration from other metropolises like Istanbul and Ankara. Add to this its excellent air quality, sea, cuisine, national and international cultural events, numerous prestigious educational institutions, and excellent transport links.

Property prices in Izmir rose more than in Istanbul – 98% compared to 90% over the year. The trend is also seen in Izmir's surroundings: as an example, the town of Cesme is quickly gaining popularity as a prestigious resort. It's no surprise that many developers are launching new projects here. As of 2023, real estate prices in Cesme reached an average of TL 12,027,788; price increases were about 70% over the year, and 322% over the past two years! The average rental rate in Cesme is now TL 175 per square metre, with the average monthly rent for a unit being TL 24,661.

Overall, on the Aegean coast, rentals this year have increased by 30% to 80%, depending on the location.

We hope the above information helps you navigate if you're planning to buy an apartment or villa in Turkey now, outside the peak summer season, taking advantage of the current market stagnation and sellers' willingness to offer discounts and bonuses.