New-build property in Turkey is a popular investment and attractive to people who want to buy a home overseas. For example, in 2022, you can buy a property under construction in Turkey (a 1 + 1 apartment in the rich Mahmutlar district in Alanya) for € 96 000. You can also buy a similar apartment in a completed housing complex for € 175 500. You can read more about the pros and features of properties that are under construction in this article.
Content:
- Standout features of Turkish property under construction
- Pros and cons of off-plan investments
- An example of pre-launch investments
- Real estate in Turkey: off-plan or completed newbuilds
- Profitable off-plan investment through Turk.Estate
Standout features of Turkish property under construction
Off-plan property is when you buy an apartment before the construction is finished. Depending on how far along the development is, these apartments or houses cost about 15-20% less compared to new-build homes.
The Central Bank of the Republic of Turkey says that in 2021’s second and third quarters, new projects increased from 8332 to 9689 units. Investors and buyers have more options and opportunities to buy a property in Turkey and make a good profit because of this.
The government supports the Turkish real estate market because it’s an important part of the country's economy. This includes the off-plan real estate market. Foreigners who aren’t in any hurry to move and can wait for the construction to finish will be able to rent out their apartments and get passive income. Or you can resell and make a quick profit. Buyers' rights are well protected by the state to ensure that your money and investments are safe.
Pros and cons of off-plan investments
Pros
Turkish properties under construction have some advantages compared to buying a finished property. These are:
- On average, the cost is 15‒20% lower than finished properties.
- A finished apartment in a new building can be sold for 25–30% more than its purchase price.
- You can pay in interest-free installments.
- You can have an individualized payment plan.
- The initial payment is only 20% of the property value.
- You can design the space to your liking.
- There’s a wide range of properties to choose from.
- You’ll be the first and sole owner.
The analytic website “Trading Economics” says that there’s a yearly price rise in Turkey’s real estate market of about 11% i. Prices are also expected to increase in the future. This means that investors could resell their apartments (even ones that are under construction) and make a maximum profit.
Cons
The advantages of off-plan property make apartments attractive in the new build sector in Turkey. But what about the cons? Off-plan purchases come with some risks even though the government has made an effort to tackle them. These are:
- Time delays. You’ll have to wait before you get your keys.
- Customer expectations and reality don’t always match.
- Buildings aren’t time-proven and any mistakes during construction can only really be seen after the building is in use. In new buildings, construction errors can’t always be found in the first phase.
- Location. Sometimes, new buildings aren’t always around good infrastructure. That’s why some buyers can’t get easy public transport, etc. This can be prevented by a good, private check of the infrastructure when you’re looking for property.
Some risks are:
- Construction is delayed.
- The real estate developer goes bankrupt.
- The project freezes.
- The real estate developer is fraudulent, etc.
Some risks are impossible to predict because they happen for reasons outside the construction company's control. For example, a construction delay because of delivery interruptions for supplies. This can lead to late deadlines and rescheduling of the residential complex opening.
An example of pre-launch investments
Now let's take a closer look at pre-launch investments. Pre-launch is investing in property that’s still under construction. Its main difference from off-plan is that the purchase happens in the planning stage. This means that the residential complex exists only on paper. This type of investment is cheap. On average, pre-launch apartments cost 10–25% less at the preparation stage (excavation stage) than in the foundation and following stages.
Let’s look at the pros of the pre-launch investment of the Sea View Izmir residential complex. In 2020, in the planning stage, a 2-bedroom apartment cost € 46 400. Now, an off-plan apartment in this residential complex costs €113 000. Preliminary information predicts that the completed property will cost 20-25% more.
Even though there are low costs, not all investors want to waste extra time or bear the added risks of a long wait. Entrepreneurs prefer buying properties under construction and following a strict payment plan.
Real estate in Turkey: off-plan or completed newbuilds
Let's compare both options.
Properties under construction
Off-plan pros:
- A new property.
- Innovative construction technologies.
- Modern design following modern trends and buyer needs.
- Flexible design - the buyer can make any changes.
- Real estate quality assurance up to 10 years.
- Comfort and design with modern infrastructure.
- Liquidity.
- High demand.
- Individual discounts from the real estate developer.
Cons:
- Often, there’s a standard design.
- Long wait for construction to be completed.
- Extra risks of off-plan purchases.
Completed newbuilds
Pros:
- You can move in immediately.
- No risk of fraud during the purchase.
- Time-proven buildings.
- Developed infrastructure.
- Simple liquidity and potential payback.
- Populated districts.
Cons:
- Hidden flaws. Tx issues could happen (you must check with the tax department in advance), etc.
- Impossible to make design changes.
- Some repairs may be needed.
- Old-fashioned building design.
- Apartments “with history” or that someone has lived there might make some people feel uncomfortable.
Even though properties under construction have many pros, most buyers in Turkey prefer to buy finished apartments and houses. So, in January 2022, deals for newbuilds reached 27,203 and 61,103 for finished housing.
To sum up: buying a unit in a new building is an excellent option for buyers who understand and accept the possible risks that come with it, have extra funds and can wait for the project to be completed. This investment method can bring many benefits, especially financial ones. The choice is yours.
Profitable off-plan investment through Turk.Estate
You can find great deals from leading real estate developers in popular Turkish cities, compare prices and keep up with the market with Turk.Estate! Please contact our manager to get a free consultation and help to choose buy-to-live and buy-to-let properties.