Majestic Turkey is famous not only for its beaches by the azure waters of four seas, but also for many other things: a large number of ancient monuments, breathtaking fortresses and mosques, picturesque nature, and a mild climate. Millions of tourists visit this sunny country every year, leaving a piece of their soul and heart here. But in addition to vacationers, the eastern republic attracts the attention of enterprising investors from all over the world.
And today we will examine in detail the profitability and profitability of Turkish housing and name five reasons why it is worth investing in Turkish real estate.
Why is it profitable to invest in real estate in Turkey now?
Since the beginning of 2022, real estate prices in Turkey in national currency have increased threefold. In dollar equivalent, the cost has increased by 60-70%. At the same time, inflation slowed down at the end of the year, which led to the market entering a phase of stagnation.
What is the reason for such interest among foreign investors?
From 2018 to 2021, the price per square meter in the Turkish real estate market has doubled, showing steady growth. Even despite economic difficulties, the Turkish housing sector does not lose its value in dollars, remaining attractive to international investors.
Let's take 2022 as an example, when, according to analytical data, the average price per square meter in Turkish lira has more than doubled. At the same time, in dollar equivalent, the average price per square meter began the year at $1,010 and reached $1,700 by the end of it. According to the Central Bank of the Republic of Turkey (CBRT), last year the average price of housing in the country increased by 160.6%. According to Eurostat, compared to the growth of real estate prices in the European Union since 2010, the Turkish market is ahead of the European one: 821% versus 147%.
| Year | Price per sq.m in TRY | Cost per m² in USD |
| 2013 | 2231 | 1093 |
| 2014 | 2729 | 1176 |
| 2015 | 3340 | 1147 |
| 2016 | 3616 | 1027 |
| 2017 | 3940 | 1039 |
| 2018 | 3973 | 753 |
| 2019 | 4124 | 693 |
| 2020 | 4946 | 665 |
| 2021 | 6772 | 616 |
| 2022 | 21260 | 1135 |
In popular locations such as Istanbul and Bodrum, prices have increased 3-4 times. The most significant increase in prices is observed in the segment of new buildings located on the seashore.
One of the factors contributing to this growth is the Turkish government’s abolition of VAT on property purchases in 2017 and the introduction of a flat 4% property transfer tax. In addition, since 2018, it has become possible for foreign investors to obtain Turkish citizenship through the Turkey Citizenship by Investment (TCBI) program by investing at least $250,000 in the housing sector. Although the Turkish Citizenship Law was amended in 2022 to raise the minimum investment threshold to $400,000, this has not dampened the activity of foreign investors seeking citizenship through investment in Turkey.
With tax cuts and the introduction of a citizenship program, Turkey's property market has been transformed, leading to steady price increases.
The housing shortage also played a significant role in this growth: the existing supply does not satisfy the current demand. The buyers' demand currently averages 800 thousand properties per year, while only 500 thousand are offered on the market. For the local population, buying real estate is becoming not only a solution to housing problems, but also a way to protect their savings from inflation.
However, the decisive factor was the influx of foreigners in 2022, primarily Russians, for whom Turkey remained one of the few countries providing the opportunity to settle on its territory, since the homeland of these foreign citizens is under international sanctions. Ukrainians also actively settled in Turkey. It was these circumstances that allowed sellers not to limit themselves in setting prices.
In 2023, the situation changed somewhat.
Experts note a certain period of calm. But do not delude yourself, it is temporary, and is associated to a large extent with the elimination of the consequences of the February earthquakes, as well as with the presidential elections. Already in the summer of 2023, the market began to gradually recover and a noticeable revival began on the part of buyers from abroad. And while prices have not yet begun their rapid growth, it is worth accelerating the decision to buy real estate. By autumn, the cost of housing will most likely rise by at least 20%, according to some experts, it is quite possible that prices will exceed 40%.
Payback and Income from Investments in Turkish Real Estate
So now let's talk about whether it is worth investing in real estate in Turkey.
Speaking about the prospects of earning money on housing, we must not forget that the Turkish Republic has a colossal tourist potential, which is the reason why millions of tourists visit the country every year. It is for this reason that the rental business is very developed, which brings quite a significant income to apartment owners.
How much can you earn on real estate in Turkey?
In Turkey, apartments can be rented out both on a seasonal basis and for a longer period. At the same time, the profitability of real estate in Turkey is impressive:
- for long-term leases - about 6%,
- in the short term - in the region of 8-10%.
The return on investment is only 8 years.
As for resale, apartments in modern residential complexes can bring a profit of 30-50% in just three years, thanks to a steady increase in value. Naturally, when choosing real estate for the purpose of generating income, it is worth focusing on apartments located near the sea, in complexes with a rich set of additional amenities, such as a swimming pool, sauna, hammam, sports and children's areas.
5 Reasons Why You Should Invest in Turkish Real Estate
The development of the tourism and hotel industry, as well as the hospitality of the local population, has become a catalyst for the explosive growth of Turkey's popularity as a world-class tourist destination. However, it is worth noting that in addition to its recreational potential, this republic is often considered by foreign investors who seek to benefit financially. We propose to consider the key factors that incline foreigners to invest in Turkey.
Reason 1. The thriving international tourism sector
Over the past 2022, Turkey was visited by more than 44.56 million tourists. Turkish resorts are popular among Europeans, but they are also incredibly popular among citizens of Russia and other post-Soviet countries. There are objective reasons for this: an amazing climate, a developed entertainment sector and the highest standards of the hotel industry, combined with affordable vacation costs.
Numerous tourists act as a stable and reliable source of income for owners of apartments and villas. Many vacationers nowadays prefer to rent apartments instead of staying in hotels. As a result, real estate located by the sea is always in demand during the tourist season. The key aspect is to make a good choice of the property and manage it effectively.
Reason 2. Active transformation of urban development and public infrastructure
This point is directly related to the previous one. Due to Turkey's high popularity as a tourist destination, local authorities actively allocate budgets for the constant development of social infrastructure, in particular, for the improvement of territories and the construction of shopping and entertainment centers. Since the early 2000s, there has been a real boom in this area: new airports are being opened, roads are being built, large-scale projects are being erected. Many once small villages have turned into developed resort regions, which in their appearance are in no way inferior to the European pearls on the azure coast of the Mediterranean.
To appreciate the enormity of the transformation of Turkish infrastructure, one only has to look at the breathtaking skyscrapers of Istanbul. This cosmopolitan city, along with other settlements in Turkey, has won the hearts of real estate investors due to the appeal of modern properties with well-organized infrastructure, well-kept areas and convenient layouts.
Reason 3. Wide choice of high-yield investment objects
The active development of the construction market gives rise to an inexhaustible variety of options for investing in real estate in Turkey. Whether it is purchasing finished properties on the secondary market or investing in apartments at the initial stages of construction. At the same time, you can choose housing in resort regions on the coast and in densely populated areas of Turkish megacities.
Reason 4. Affordable cost of real estate
The Turkish real estate market is famous for its financial accessibility. The cost of real estate starts from €65 thousand, however, to purchase a truly investment-attractive property with high rates of profitability and return, it is recommended to focus on the amount of €90 thousand and above.
As for mid-priced properties, they are usually valued at up to €150,000. If we are talking about premium real estate, the price starts at €500,000.
It is important to note that investment opportunities are not limited to residential real estate. Commercial properties are also of considerable interest. Prices for commercial real estate vary depending on the characteristics and location of the property. For example, you can invest in a small retail outlet on the street for several tens of thousands of euros. In addition, there are options for acquiring cafes, restaurants, hotel complexes and shopping and entertainment centers.
Reason 5. Income strategies for investing and managing assets
The Turkish real estate market offers a number of highly profitable investment options:
The most popular is renting out real estate. This strategy will allow the owner to receive a stable passive income. Apartments in resort areas, for example, in Alanya and Antalya, can provide a return of 8-10% per year. If the apartments are located on the first coastline, you can count on 12% per annum.
Another widely known method is investing in construction in Turkey with the purpose of reselling the property after completion of construction work. When choosing to buy a new building, it is also worth knowing a very interesting nuance: the earlier you buy an apartment in a project under construction, the lower its cost will be. Usually the difference between the cost per square meter at the start of sales and after the commissioning of the residential complex reaches 30%.
You should not exclude from your calculations the annual increase in housing prices. As was said at the beginning of the article, prices for Turkish housing are growing and they are doing so at a record pace. Therefore, investing in Turkish real estate in 2023 will allow you to make a profit from a profitable resale of the property as early as 2024.
Recommendations for choosing real estate in Turkey for profitable investments
To ensure that your investment in Turkish real estate brings good returns, follow these rules:
Tip 1: Research the local real estate market.
When choosing a reliable and profitable asset, it is important to study the trends and forecasts for price growth. It is also worth familiarizing yourself with the legislation regarding foreign investors. For example, in strategically important areas, the purchase of real estate is prohibited. But, in general, such regions are not as interesting to foreigners as sunny Alanya, popular Antalya, colorful Istanbul and other resort cities of Turkey. And, when purchasing real estate in one of the favorite resort regions among foreigners, you should make sure that the area where your future apartment is located is open for issuing a residence permit. Unless, of course, you plan to obtain a Turkish residence permit. So, in Alanya, Ikamet is not issued in Avsallar, Kestel, Mahmutlar and Kargicak. And this situation is throughout the country: in places where the number of foreigners has reached 20% of the total population, the issuance of residence permits has been suspended. But citizenship for investments in Turkish real estate from $ 400,000 in areas closed to Ikamet can still be obtained.
Tip 2: Choose the right location for your property.
The location of the residential complex is of key importance when choosing apartments for profitable investments. It is best to choose a young area, where the cost of housing is still quite attractive, while the resort is actively being improved and an increase in prices per square meter is predicted in the near future.
Preference should be given to apartments on the seashore. This type of real estate will be in demand both among tenants and buyers.
Tip 3: Consider your investment goals.
If you plan to rent out apartments for a long term, choose properties located in residential areas, but with sufficient infrastructure for comfortable living.
To receive a stable income from short-term rentals, focus your choice on apartments located in close proximity to the sea and in areas with a variety of entertainment, attractions, shopping centers, cafes and restaurants.
The better the characteristics of the apartments, their location, the infrastructure on the territory of the residential complex and the views from the windows, the higher the return on investment.
If you want to get a solid capital increase in the near future, invest in real estate at the foundation stage. At the earliest stages of construction, prices are 30-40% lower than market prices. This means that immediately after the complex is put into operation, you can resell the apartments quite profitably: with a ⅓ profit from the invested amount.
Tip 4: Determine your financial capabilities.
When choosing real estate for investment in Turkey, it is important to correctly assess your strengths and calculate all expenses associated with the purchase of apartments and paperwork, as well as develop an investment strategy to avoid losses.
In addition to the costs of concluding a purchase and sale transaction, consider the costs of property management. This includes utility bills, an annual tax of 0.2%, aidat - a monthly fee for servicing infrastructure facilities on the territory of the residential complex.
Tip 5. Carefully check all documentation for the apartment you are purchasing.
When buying real estate in Turkey, it is necessary to check the availability of ISKAN - a technical passport, as well as hidden owners in TAPU - a certificate of ownership. If the property is purchased at the construction stage, these documents will most likely not be available, since they are issued for finished houses and apartments. But permission to build the property is mandatory. When choosing to buy a new building, pay special attention to the choice of the developer. It would not hurt to monitor the reviews of people who bought apartments from this developer. Such information can be found on thematic forums and social networks.
Tip 6: Pay attention to details.
Before signing a purchase agreement, be sure to read all the terms and conditions so that you understand what obligations you are taking on and what rights you have.
Tip 7: Get the support of a reputable, licensed real estate agency.
A company with impressive experience and an impeccable reputation is well versed in Turkish legislation and all issues related to the purchase of real estate in the territory of the Turkish Republic. Specialists know where to invest money in Turkey, where and what kind of property to choose for specific investment purposes, as well as how to negotiate with the seller of the apartment in favor of the buyer and legally competently conclude a deal.
Armoni Homes has helped thousands of foreigners become happy owners of resort real estate in the sunny and hospitable Turkish Republic. Being well-versed in the trends and forecasts of the housing market, we can guarantee that we will offer a constructive solution for your needs and budget.
