In August, analysts not only sum up the results of the first half of the year, but, considering the data for July and often observing a frequent summer uptick in transactions, begin to forecast the year's outcomes. However, let's start with the latest statistics:
Content:
- Key mid-year facts
- Top-30 provinces with the highest number of housing transactions for the month
- Where to buy real estate? Consider Istanbul
Key mid-year facts
- According to the analytical portal Endeksa, the average price of property in Turkey for July 2023 stood at 2,691,780 Turkish Lira (TL). Converted to the euro rate at the end of August, this amounts to €92,000. Understandably, in the most sought-after provinces, especially in the most popular cities and districts, prices are much higher.
- The average price per sq. m is TL 20,706 (€707).
- As of July, the annual growth rate of housing prices in Turkey was at 109%.
- The average payback period for housing investments is now 16 years, which is several years shorter than the figure recorded just a couple of years earlier.
- In the ranking of the 30 provinces with the highest number of completed sales transactions (table provided separately), the top three in July were Hatay, Ankara, and Mugla.
- July turned out to be quite favourable for the real estate market: the volume of transactions increased by 31% compared to July 2022.
- In terms of transactions with foreigners, the province of Antalya leads.
- Housing sales to citizens of other countries increased by 7% in July compared to June of this year.
- The share of sales to foreigners in the total volume of transactions amounted to just under 3% (more precisely, 2.6%).
Görkem Oğüt, co-founder and CEO of Endeksa.com, believes that the continuing price growth, and the consequent reduction in affordability of purchasing apartments in Turkey for the average citizen, are currently the main reasons why the transaction volume is not as high as one would hope. Nevertheless, although the high rates observed in 2021 and 2022 have decreased; the momentum still remains at 6–7% per month. So, as long as there's an imbalance between demand and supply in the market, any significant drop in residential real estate prices should not be anticipated.
Top-30 provinces with the highest number of housing transactions for the month
| Number of sales transactions (July 2023) | Provincial share in total transactions (%) | Average sale price per sq. m (TL) | Average sale price per housing unit (TL) | Yearly price increase (%) | Investment payback period (years) | |
|---|---|---|---|---|---|---|
| Istanbul | 15,724 | 14 | 31,927 | 3,831,240 | 91 | 17 |
| Ankara | 9,688 | 9 | 16,501 | 2,145,130 | 123 | 13 |
| Izmir | 5,203 | 5 | 26,466 | 3,440,580 | 111 | 19 |
| Antalya | 5,059 | 5 | 30,452 | 3,654,240 | 107 | 19 |
| Bursa | 4,001 | 4 | 17,738 | 2,394,630 | 92 | 17 |
| Gaziantep | 3,158 | 3 | 13,797 | 2,138,535 | 63 | 17 |
| Mersin | 3,152 | 3 | 19,561 | 2,836,345 | 105 | 18 |
| Konya | 3,120 | 3 | 14,209 | 2,273,440 | 105 | 15 |
| Kayseri | 3,009 | 3 | 10,413 | 1,718,145 | 79 | 18 |
| Balikesir | 2,647 | 2 | 22,894 | 2,815,962 | 94 | 22 |
| Kocaeli | 2,572 | 2 | 18,334 | 2,420,088 | 100 | 17 |
| Tekirdag | 2,553 | 2 | 15,679 | 2,038,270 | 104 | 16 |
| Aydin | 2,406 | 2 | 28,377 | 4,114,665 | 96 | 26 |
| Sanliurfa | 2,389 | 2 | 10,832 | 1,841,440 | 72 | 19 |
| Samsun | 2,086 | 2 | 16,796 | 2,267,460 | 105 | 17 |
| Sakarya | 2,007 | 2 | 17,428 | 2,178,500 | 102 | 17 |
| Diyarbakir | 1,972 | 2 | 12,067 | 1,930,720 | 62 | 15 |
| Adana | 1,926 | 2 | 15,691 | 2,510,560 | 76 | 19 |
| Eskisehir | 1,781 | 2 | 15,911 | 2,068,430 | 108 | 15 |
| Manisa | 1,641 | 1 | 15,255 | 1,906,875 | 106 | 17 |
| Mugla | 1,524 | 1 | 47,439 | 6,261,948 | 112 | 21 |
| Denizli | 1,480 | 1 | 16,929 | 2,370,060 | 106 | 18 |
| Elazig | 1,172 | 1 | 9,471 | 1,562,715 | 109 | 17 |
| Yalova | 1,135 | 1 | 19,027 | 2,378,375 | 97 | 19 |
| Hatay | 1,074 | 1 | 15,800 | 2,417,400 | 158 | 18 |
| Erzurum | 1,042 | 1 | 8,674 | 1,387,840 | 99 | 16 |
| Canakkale | 1,021 | 1 | 23,024 | 2,762,880 | 86 | 19 |
| Trabzon | 1,019 | 1 | 16,344 | 2,615,040 | 104 | 20 |
| Kahramanmaras | 980 | 1 | 13,519 | 2,298,230 | 106 | 19 |
| Mardin | 957 | 1 | 10,471 | 1,780,070 | 92 | 19 |
Key insights from the top 30 provinces
- The majority of housing is sold in the five main metropolises - Istanbul, Ankara, Izmir, Antalya, and Bursa. These provinces alone account for a share of 4% or more of the total volume per month. Istanbul stands out the most, covering a massive 14%.
- Based on the results of July, the provinces with the highest average price per sq. m are:
- Muğla: TL 47,439 (approx. €1,620).
- Istanbul: TL 31,927 (approx. €1,090).
- Antalya: TL 30,452 (approx. €1,040).
- Aydın: TL 28,377 (approx. €969).
- Izmir: TL 26,466 (approx. €904).
- Top 4 provinces by average price per housing unit:
- Muğla: TL 6,261,948 (approx. €214,000).
- Aydın: TL 4,114,665 (approx. €140,533).
- Istanbul: TL 3,831,240 (approx. €130,853).
- Antalya: TL 3,654,240 (approx. €124,808).
- Hatay, which suffered from the February earthquake, exhibited a remarkable +158% price growth year-on-year. Ankara follows closely with +123%.
- Diyarbakır (+62%) and Gaziantep (+63%) had the least growth in property prices, though in the grand scheme, a 60+% increase is hardly "small."
- At present, housing in Ankara offers the quickest return on investment, with properties typically paying themselves off in 13 years. In Eskişehir and Diyarbakır, it's 15 years.
- Aydın continues to have the longest payback period, largely due to the high cost of residential properties there, taking an average of 26 years.
- However, when balancing factors like price, payback period, demand, and opportunities for renting out or reselling quickly, Istanbul and Antalya maintain their lead.
Where to buy real estate? Consider Istanbul.
The average price for a residence deemed of high quality in Istanbul currently stands at TL 13.2 million. Notably, there's a growing interest in the luxury real estate segment; and although prices in this category are rising at a slower pace, owners of such properties never lose out. In other words, reselling them with a good profit margin becomes much easier, especially if the apartment is upscale or upper-class, situated in a prime location within a prestigious residential complex.
To clarify, in Turkey, the "upper segment" or upscale residences typically comprise a minimum of 4 bedrooms and 2 bathrooms. Additionally, the residential complex should have security, its own parking facility, and a range of other infrastructure perks nearby.
Given these characteristics, the average price per sq. m for the "upper segment" real estate currently is TL 47,682 (around €1,630). This results in an average property price of TL 13,207,914, or approximately €451,000.
Interestingly, this amount is currently sufficient to obtain "Turkish citizenship by investment" – meaning "citizenship by purchasing a single apartment". Often, foreign investors now have to buy several properties simultaneously unless they opt for truly expensive apartments or villas in Turkey.
For comparison, in a slightly lower price segment (below the "upper", but above the standard), the average cost per sq. m is between TL 30,022–31,927, or €1,034–1,090.
The average price of an apartment in Istanbul in this category is TL 3,831,240, equivalent to €130,853.
Regarding Istanbul's price dynamics for the current year: from January to July 2023, housing prices in Istanbul increased by 42.8% on average. In the "upper segment," it's a rise of 22.8%, and in the "below upper" segment, it's a sharp increase of 42.5%. This means that the more affordable, yet still premium segment, is appreciating much faster.
The annual growth (over the past 12 months) was +90.6% for Istanbul overall, +87.6% for the "below upper" segment, and +50.5% for the "upper segment."