Upper class and housing in expensive resorts: trend of the year

The trend in buying real estate in Turkey by the autumn of 2023 steadily shifted from the previously considered most liquid 2+1 format residences to the segment of elite housing, preferably in Istanbul. And in the resort sector, especially vacation homes, coastal areas of Izmir province have been added to the perennial leaders such as Antalya and Alanya. In particular, the villages of Çeşme and Alaçatı, especially the former. Moreover, both are also included in the list of expensive resorts.

Content:

• Istanbul
• Current prices
• Dynamics of prices in Istanbul
• In numbers:
• Istanbul's competitors
• Pay attention
• Investors are advised to look at the neighborhoods:
• For comparison: In the whole area of Çeşme:
• Prices by location in Çeşme:
• The table speaks for itself, but here are some brief conclusions:

Istanbul

The analytical portal Endeksa, after studying the cost of housing, dynamics and demand for it in different price segments of the real estate market of the largest Turkish metropolis, has come to the following conclusions.

We classify elite apartments in Turkey with a minimum of 4 bedrooms and 2 bathrooms as the upper price segment. Other characteristics of the residential complexes in which these apartments are located include the mandatory permanent presence of service personnel in the area, guaranteed security, and private parking lots with sufficient space for community residents (outdoor or indoor).

The economy class segment includes apartments with a maximum of 3 bedrooms, no more than 1 bathroom, without maids, formally guarded. Parking is not mandatory.

Current prices

According to Endeksa and considering the above criteria, the average price per 1 m² of housing in the upper price segment in Istanbul is 47,682 Turkish Liras (TL) or about €1,652 at the exchange rate of September 2023.

The average cost of an elite housing unit is TL 13.2 million or €457,698.

* Note: This amount is just enough to qualify for Turkish citizenship "by investment" through an accelerated procedure: the minimum threshold for this is $400,000.

As for the economy class segment:

• The average price per 1 of housing in Istanbul is TL 30,022, or €1040;
• The average cost of a housing unit is TL 2.7 million, or €93,633.

As can be seen, the square meter is more than 1.5 times cheaper, and the average economy class apartment is more than 4 times cheaper than the luxury one.

If we evaluate the indicators for Istanbul as a whole, without considering the class of real estate, the average price is:

• TL 31,927 or €1106 per 1 m²;
• The average cost of a housing unit is TL 3.8 million, or €132,765.

Why is this indicator much closer to the average prices of the economy class? The fact is that in Istanbul, as in other cities in Turkey, budget housing is still being built more than elite housing.

For comparison, according to the latest calculations, the average price in Turkey as a whole (all provinces included) is:

• TL 20,706 or €718 per 1 m²;
• TL 2.6 million, or €93,280 per residential unit.

Dynamics of prices in Istanbul

• According to Endeksa's analysis, housing prices in Istanbul increased by 42.8% in the first 7 months of 2023.
• By segments: The economy class increased by 42.5% from January to July, while the luxury sector increased by 22.8%.
• Over the year, housing prices increased by 90.6% in Istanbul as a whole, 87.6% in the economy segment and 50.5% in the luxury segment.

* Note: When evaluating the cost and dynamics of prices, inflation is considered, which is in the tens of percent in Turkey in 2023 and, for understandable reasons, affects the indicators.

Görkem Oğut, partner, founder and CEO of Endeksa.com, evaluated the data and stated that the growth of housing prices has slowed down but is still above the inflation indicators. In the upper segment, costs are increasing more slowly than in the economy; however, considering parameters such as the continuous increase in construction costs together with the insufficient supply significant price reductions in the short term should not be expected at present.

In numbers:

Istanbul's competitors

Rental prices in Izmir and its surrounding areas have increased by 30-80% this year, depending on the location. For example, in Foça by 80%, in Urla by 45%, in Çeşme and Karaburun by 30–35%.

As for buying a property, prices rose by 4% in the first month of the summer. Analysts believe that the cost of residential real estate will increase by another 30% by the end of the year.

Not surprisingly, the same real estate analysis portal, Endeksa, focused on Izmir's surroundings and devoted a separate price study to Çeşme and Alaçatı. Çeşme was even called the "Pearl of Izmir".

The increase in the number of properties for sale in the resort areas is steadily increasing (this is partly due to the desire of owners, who do not have this property as the only one, to make good money on resale during the season); and the average return on investment, even taking into account the high prices, is not too long, now it has been reduced to 24 years.

As of August 2023, the average cost of a housing unit in Çeşme, one of the most popular tourist destinations, has reached TL 13.2 million.

* Note: As can be seen, this amount is equivalent to the prices of elite housing in Turkey's largest metropolis.

Compared to the same month last year, the average price increase of residential real estate in Çeşme was 77% and in 2 years it reached 322%.

And although the dynamics for the year is somewhat lower than the indicator of the "Turkish Riviera" – Bodrum (where an increase of 91% was recorded for the year), the data is impressive.

Pay attention

Investors are advised to look at the neighborhoods:

• Celâl Bayar, next to Alaçatı: It is currently almost the most sought after and therefore the most expensive. The average price per 1 square meter here is currently the highest of all locations in Çeşme: 1 square meter costs TL 115,767. The average price per housing unit is 22.4 million TL.
• Çaka Bey: TL 112,845 per 1 square meter or TL 30.1 million per housing unit.
• Boyalyk: TL 100,161 per 1 square meter and TL 15.3 million per housing unit.

For comparison: In the whole area of Çeşme:

• The average price per 1 square meter is TL 74,204 or €2571.
• The average cost of a housing unit, as already mentioned, is 13.2 TL million, or €457,712 (citizenship can be obtained through investments).
• The average price of 1 square meter of rental housing is TL 195 per month.
• The average cost of renting 1 apartment is TL 27,426, or 950 € per month.

Prices by location in Çeşme:

The table speaks for itself, but here are some brief conclusions:

• The top 3 most expensive locations in Çeşme per square meter are Celâl Bayar, Çakan Bey and Boyalık.
• The top 3 locations with the highest average price per residential lot are Çakan Bey (over TL 30 million), Celâl Bayar (TL 22.5 million), and Ardıç (TL 21.6 million).
• The cheapest square meters in and around Çeşme are in Ovacık and Germiyan (TL 50,000-51,000 per square meter).
• The lowest average house prices are in Musalla (around TL 6.7 million), Ovacık (TL 7.1 million), Germiyan and İsmet İnönü (TL 7.5 million), Altınkum (TL 7.9 million) – all within TL 8 million.
• The cheapest rent can be found in Alaçatı: TL 176 per square meter.
• The lowest prices for renting an entire apartment are in Musalla (TL 22,000), while the highest are in Cumhuriyet and Çakan Bey (TL 72,000 and TL 76,000, respectively).
• The areas with the highest price increase over the year were Altınkum (221%) and Şehit Mehmet (184%).
• The area with the lowest price increase over the year was Fahrettinpaşa (8%). In second place was Cumhuriyet with an increase of 37%.