Why Do Real Estate Prices Change in Istanbul?

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Istanbul ranks first in the list of Turkey’s cities that have achieved the highest rise in real estate prices, according to Anadolu Agency. Istanbul has managed to achieve the highest number of real estate sales in the last three years, and this number has doubled since the beginning of this year, which has led to a rise in real estate prices as a result of the increasing demand for it by foreigners and Turks.

Our article is to talk about how real estate prices have changed in Istanbul and the most important reasons that contributed to this change.

Istanbul real estate prices in 2022:

According to accurate analyzes of the real estate market in Turkey, real estate prices in Turkey in general and in Istanbul in particular are witnessing a continuous rise in real estate prices. It can be said that the rise is about to become on a daily basis, and to be precise, changes have begun to occur since 2020 AD with the beginning of the Corona pandemic, which was reflected in its negative effects on the global economy and led to crises in various countries whose currency fell against the dollar exchange rate, including Turkey, where the value of the lira fell.

However, its effects were opposite to the real estate market in Turkey, which was able to benefit from the crises positively to become the safe market to save money and proved its ability to maintain its stability in light of the economic deterioration.

Real estate prices in 2020 began to gradually rise until they achieved successive leaps in 2022 and reached a level that had never been reached and was never expected. If anything, it indicates the importance of real estate investment in Turkey, the most important investment guarantee and security as it is the investment that achieves the greatest return.

Istanbul always has the largest share in the developments in real estate prices and this is linked to several reasons that make Istanbul a destination for Turkish and foreign real estate investors of all nationalities, and the numbers included in the statistics related to the number of sales achieved by this region and the rise in prices compared to various other cities of Turkey are good evidence.

Reasons for the rise of real estate in Istanbul:

It can be said that the reasons are summarized in two main reasons, the first reason is the increase in demand for real estate in Istanbul and the second reason is the high construction costs, but in fact, there are many reasons that caused these two reasons, which we will mention in detail:

1. Istanbul location:

Istanbul enjoys an important strategic location between the continents of Asia and Europe, linking them through the Bosphorus Strait. This location has given it great importance to be one of the best cities that achieve success for investments of all kinds. It allows the investor to expand his business between East and West. It also facilitates the import and export process that greatly supports trade, and this in turn has been reflected in the positive effects on its various markets, foremost of which is the real estate market, which its shares rose significantly, which is one of the reasons that led to the increase in the demand for real estate in Istanbul, which leads to an increase in its prices.

 3.Istanbul Water Canal Project:

The canal project has contributed significantly to increasing the demand for real estate ownership in the city of Istanbul and more in the areas near the canal. On the one hand, it is considered one of the most important water crossings, which will make Istanbul a mandatory sea transport station, thanks to its large capacity, which makes it controlling the movement of ships and transport crossings.

This leads to an increase in the importance of Istanbul, as it leads to the prosperity of its economy and makes it the best place to live and work, and thus the demand for its real estate increases, which is associated with the increase in its prices.

4.Istanbul third airport:

It is considered one of the most important projects set up by the Turkish government in Istanbul, which is considered the third largest airport in the world, characterized by a huge capacity, which made it one of the most important international airports controlling air traffic, which began to have clear effects on real estate in Istanbul and the surrounding areas more, because it will provide job opportunities and will reflect on the success of investments.

Real estate prices in these areas have witnessed an increase since the beginning of the establishment of the airport project, and it is expected that they will achieve very high numbers with the beginning of the airport’s work.

5.Industrial projects:

The Turkish government has set up many industrial and other projects, which have led to an increase in job opportunities and to attract the increasing numbers of the population that have increased their demand for real estate in Istanbul, and this demand has resulted in a rise in real estate prices.

6.Population increase:

Istanbul is the preferred place for foreigners and Turks to reside, because it provides opportunities for an integrated life with a decrease in the cost of living in addition to the availability of job opportunities.

this means, for Istanbul residents, a stable and luxurious life, and the increase in population numbers will certainly result in an increase in the demand for real estate and more residential real estate, which leads to an increase in its prices, and Istanbul has witnessed a double increase in population numbers since the beginning of 2022, and therefore it was a huge increase in real estate prices in Istanbul.

7.Great turnout from foreign investors:

As a result of the ability of the real estate market in Turkey to maintain its position despite the global crises, foreign investors have found it a safe place to save their capital from loss. Istanbul is considered the preferred city by foreigners, because it is the inhabited city for them. It is known for its importance at all levels, in addition to the possibility of achieving a high investment return for the investor, according to the opinions of real estate experts and specialists. Therefore, real estate investors went to Istanbul real estate without hesitation. This increasing demand led to a rise in real estate prices as well.

8.Turkish government facilities:

As an encouraging step by the Turkish government for real estate investment in Turkey, it issued several decisions that achieved a qualitative leap in the movement of buying and selling real estate in Turkey, the most important of which is the government’s decision to grant Turkish citizenship to those buying a property in Turkey worth 400,000$, in addition to its decision to grant real estate residency to those buying a property of foreigners, with a value of 75,000$, and the effects of these decisions were quick and achieved high numbers in the number of real estate sold in Turkey to foreigners. Istanbul real estate has the largest share of the effects of these decisions, as it is the city that fulfills the investor’s desire to obtain citizenship and residency and benefit from its many advantages while at the same time ensuring the most successful investment for his real estate.

9.The tourist importance of Istanbul:

Istanbul was and still is the most important tourist city in Turkey and in the world. It is a city rich in charming landscapes, archaeological and historical monuments that attract tourists from different countries of the world. These permanently increasing numbers of tourists have greatly affected the importance of real estate in Istanbul because of the high return on investment that it will achieve, and thus increased the prices of these properties.

10.High costs:

The rise in the prices of building materials was a result of the collapse in the global economy and the decline in the price of the lira against the price of the dollar, and this leads to a high cost of construction, and thus real estate prices rise. This point is not one of the negative points in the real estate market. On the contrary, it is considered one of the most positive effects that will bring the real estate investor more profits resulting from the rise in prices, because the rise will not be limited to new properties only, but will include the entire market.

12.Quality and design:

After the issuance of the Turkish government’s decisions related to Turkish citizenship, the demand for real estate that fulfilled the required condition increased, so construction companies rushed to meet this increasing demand by building projects that achieve the purpose that imposes their dependence on the finest types of building materials and the latest designs and services for real estate. Thus, real estate in Istanbul was characterized by high quality and sophistication of design.

13.High wages of labor:

After the decline in the Turkish lira against the dollar price, the cost of living in Istanbul rose, and it was necessary to increase the wages of construction workers, and this increase was accompanied by an increase in real estate prices.

14.global crises:

Istanbul has benefited from the situation of instability and insecurity in neighboring countries to be able to attract large numbers of capital and residents, which led to an increase in the demand for real estate and its prices. Some of these reasons may affect the increase in demand for real estate in various Turkish cities, but their impact was not at the same rate as Istanbul.

Statistics confirming the rise in real estate prices in Istanbul in 2022:

The Center for Economic and Social Studies at Başakşehir University in Istanbul has prepared a report on the increase in real estate prices in Turkey in general and in Istanbul in particular. In its report, the Center relied on a comparison between the latest statistics for the year 2021 to compare it with the statistics achieved by the current year 2022 since its inception.

In preparing the report, it relied on the most important and most famous official Turkish websites, which guaranteed the correct and accurate study.

The increase in real estate prices only for the first month of January 2022 amounted to 109.1% over the price per square meter if compared with the same month last year in various Turkish cities. But for the city of Istanbul in particular, the increase in real estate prices compared to January and the same month of last year amounted to 127.5%. This percentage was calculated if the increase in real estate prices was compared, if it was calculated in Turkish lira or in dollars, that is, it is not caused by the existence of a difference in the exchange rate of the lira, which decreased from the exchange rate of the dollar, but was the result of the increasing demand for real estate and the rise in construction costs, and therefore the investor who bought his property in Istanbul in 2020 and waited for only one year was able to achieve a significant increase in the added profits on the capital .

Real estate investors have realized this rapid price development in Istanbul, and as a natural result, the demand for real estate purchases will be doubled since the beginning of 2022, which will lead to a qualitative leap in real estate prices. Indeed, this was the result reached by the Turkish Statistics Authority in its detailed study on the number of properties sold in Istanbul, for both Turks and foreigners, from the beginning of this year to its middle, which was rising at an average speed until the second month, and then the development in the third month reached its maximum, where it achieved the highest percentage of real estate sales and then continued at the same increasing pace.

 Average real estate prices in Istanbul in 2022:

Speaking about the average prices of real estate in Istanbul of its various types, including apartments, villas, agricultural and residential lands, in addition to the prices of commercial real estate, such as shops, offices and commercial buildings, and because there is a difference between real estate prices related to their type and specifications of each type separately, we will mention the average prices of each of them separately:

Prices of apartments in Istanbul 2022:

Apartment prices began to rise in Istanbul since 2018, coinciding with the Turkish government’s amendments to the decisions to grant Turkish citizenship to foreigners, whose results were greatly reflected on the apartments because they are the easiest properties in real estate investment for the foreign investor and are more secured and at the same time they can achieve their goal of obtaining citizenship.

The biggest trend was towards apartments whose prices met the required condition, and the demand for apartments began to increase gradually over the years and continued to do so in 2021 and at this time, it had achieved a large percentage of increase until 2022 was able to cause an uprising against the prices of apartments that witnessed a significant increase even in areas that were known to be cheap, such as Esenyurt or other areas.

Prices of villas in Istanbul 2022:

The prices of villas in Istanbul are low if they are compared with real estate prices in other countries, but for the local real estate market, it is one of the most expensive real estate, but in return it is one of the most profitable types of real estate investment, especially if the villa is chosen for tourism with its services, facilities and finishes and in the location closest to the tourist attractions that achieve huge profits in the peak tourist seasons.

In 2022, the prices of villas witnessed a significant increase and the minimum required to buy a villa became the value required to fulfill the citizenship requirement of 400,000 dollars.

Land prices in Istanbul 2022:

Land prices in Turkey vary according to its agricultural type, which is the lands that the government allocates for agricultural investment and residential lands, which are the lands licensed to build on them, in addition to the location of the land among the factors controlling its price. Land prices in Turkey in general have increased since the beginning of 2021 as a result of the increasing demand by real estate investors for lands of all kinds.

In 2021, 1.5 million lands of different types were sold, which is one of the huge and record numbers that the real estate market in Turkey reached for the first time, according to the Turkish Statistics Center, and the largest share of this number was for the city of Istanbul.

According to the analyzes of real estate experts and economic specialists, the reason for the increase in prices is the increase in demand for real estate ownership by real estate investors in areas that have a promising future, such as areas near the sites of planned government projects or that the government has started implementing, such as the Istanbul Third Airport project, Istanbul Water Canal and Marmara Road.

 The result was an increase in land prices in Istanbul, which achieved the highest percentage between the end of 2021 and the beginning of 2022.

Commercial real estate prices in 2022:

The importance of commercial investment in Istanbul has increased as a result of investors’ tendency to open their trade in areas that are expected to achieve prosperity after the start of the Istanbul Water Canal project, in addition to tourism, which witnessed increased activity in 2021, which positively affects commercial real estate such as shops and hotels, which led to an increase in demand for them since the end of the previous year, it achieved high numbers at the beginning of this year, in addition to commercial offices that witnessed an increase in demand by companies that went to open branches in Istanbul, after the importance of this city increased globally, which also led to an increase in its prices.

It is expected that the second half of this year will bring an increasing rise in real estate prices in Istanbul, and most real estate experts believe that the real estate market in this city is facing an unprecedented development.

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