Numerous elements and causes have contributed to the rise in real estate prices in Turkey throughout the years, but when it came to price quotations in the real estate market, they tended to be priced in hard money, particularly the dollar.
The increasing demand for real estate purchases in Turkey, which is seen year after year and month after month, is one of the most notable things that can be discussed in this article and on this subject. This demand has been seen until this sector witnessed a remarkable recovery compared to other sectors. As a result, prices are surging to previously seen levels. Their owners ought to make prudent investments for enviable returns.
The real estate investor understands that the best investment possibilities arise when demand for investments is dropping owing to issues that have nothing to do with real estate investment. These economic variables include the Turkish lira’s struggles and their effects on other industries.
Regarding the apparent increase in real estate prices and their pricing in foreign currencies, opinions among specialists and those with an interest in the sector vary. Some belief this increase to be rational given that the real estate sector, in general, has investment opportunities that are constantly renewed.
As a result, it’s crucial to begin this investment as soon as the opportunity arises. Those who believe the exaggeration of the high price issue. For this reason, they make an effort to delay their property purchases in Turkey, and the majority of them decide to put off the thought of buying once more in the hopes that real estate values would one day rise to their pre-recession levels.
However, figures from the real estate sector show that prices are consistently rising and that there may be a chance now to own property and make money, rather than waiting and delaying.
The issue of inflation is one of the factors contributing to the increase in real estate prices. Although inflation is a global issue that is not limited to Turkey and is proportional to exchange rates and the growth in demand for any product, all food, textile, chemical, detergent, car, and other products in Turkey have seen an increase in prices by unheard-of amounts as a result of inflation in the nation in recent years.
In the past two years, the real estate market in Turkey has also seen an unheard-of surge in real estate prices, with major cities, like Istanbul, seeing the largest increases in the worldwide real estate price index.
The year 2021, according to those who are interested, saw a clear demand for real estate purchases in Turkey after the country recovered from the Corona pandemic. As a result, this year was dubbed the year of real estate in Turkey, and the situation persisted through the end of 2022, with anticipations that 2023 will also be a notable year for this industry.
When viewed in light of other factors, the situation in Ukraine can be understood in terms of developments that significantly increased oil prices and encouraged investors to place their money in safe havens like real estate instead of starting businesses that may cease if circumstances in Ukraine change.
In spite of this, the demand for real estate and residences in Turkey is rising dramatically as a result of bank marketing efforts and lower interest rates on mortgages. The Turkish government also promoted international investors by offering them Turkish citizenship.
We find that the Turkish lira’s volatility also played a significant role in driving up real estate prices. Despite the negative effects the Turkish lira’s value collapse had on Turkish citizens, it encouraged foreign investors to invest in real estate in Turkey in order to benefit from the local currency’s decline against other currencies.
Real estate sales hit their peak in 2020 with 1,499,316 properties sold, up from 1,375,398 in 2018, or a rise of around 9%.
The pace of growth in real estate prices in Turkey “broke records during the post-Corona epidemic era, as it varied from 100 to 300 percent, depending on the area and city,” according to the “Arabi 21” website.
According to the website, “the increase in real estate prices in Turkey exceeded for the first time the value of the increase in the dollar exchange rate of the lira, referring to the record high costs of building materials and also the limited land officially licensed for construction, and most importantly, the fact that capital owners and investors have become focused on buying Residential real estate, especially after the decline in the value of the Turkish lira.
The sources expect, according to the same site, that real estate and rent prices in Turkey tend to rise further, especially since rental offers are much lower than what the market needs, explaining that “the price of real estate is currently determined according to the highest price of the dollar in the last six months of the year 2022, which means House prices will continue to rise if the lira declines against the dollar.
Real estate sales to foreigners in Turkey grew as the value of the Turkish lira decreased relative to the US dollar, particularly in Istanbul and other tourist destinations in the northwest of the country.
According to observers, “the high rates of inflation in the country have caused real estate prices to soar in a number of Turkish cities, placing Turkish towns at the forefront of cities in the world where real estate values have increased.”
The greatest “social housing” initiative in Turkish history, which would deliver 250,000 homes within two years, was announced by the Turkish president as part of the government’s attempts to curb the sharp increase in home prices.
Experts also claim that Turkey’s property costs have risen due to inflation, which in September 2022 hit an all-time high of 83.45%, making major city homes in the country between $100,000 and $150,000.
The largest homes in the state of Antalya, where the annual rise rate reached 183%, saw a price increase of roughly 173% in Istanbul throughout the year and 129% in Ankara, according to the Turkish website endeksa.com, which gathers data on the housing market.