Prices of Flats Increase in Türkiye, Between Causes and Consequences
Last Updated: 2023-10-13
Prices of Flats Increase in Türkiye, Between Causes and Consequences
With the beginning of 2020, Turkey began to face a new era of high inflation due to increased demand, the decline of the local currency, and most importantly the rise of the real estate market. Some may blame the reason primarily on population growth and immigration, but the picture remains incomplete and does not reflect reality as it is.
Therefore, the editorial team at Mersat Real Estate prepared this article to explain the reasons for the high prices of apartments in Turkey and its consequences, so that you are aware of what is happening in the Turkish real estate market.
In this article, you read:
The reasons behind the high prices of apartments in Turkey:
The factors that led to this noticeable increase in apartment prices in Turkey are many, we explain them to you in the following paragraph:
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Low interest rate on housing loans:
According to reports by the Turkish Statistical Institute, the rate of apartment sales in Turkey increased by 20.6% in March 2022 due to the Turkish government's move: to reduce the interest rate on housing loans. This provided the opportunity for a large segment of low-income investors to enter the real estate market and buy apartments in installments. As the door to loans remains open to the buyer, demand will increase and the real estate market in Turkey will continue to rise.
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The decline in the exchange rate of the Turkish lira against foreign currencies:
Many smart foreign investors have come to buy real estate in Turkey in order to obtain Turkish citizenship through real estate investment. This demand peaked after the Turkish lira depreciated, with sales to foreigners rising to 31% in March, according to the Turkish Statistical Institute. However, this percentage is not stable and continues to set new records, as foreign investors are still buying real estate in Turkey.
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Construction companies affected by high material prices:
The slowdown in the activity of construction companies during the pandemic that hit the countries of the world "Corona", and the high prices of imported building materials led to a stagnation in supply with increasing demand, so the number of housing projects became small compared to the large demand from locals and foreigners to buy homes in Turkey.
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People turn cash into assets:
Instead of leaving the money as it is or depositing it in banks, it can be used and transferred into ownership, such as buying real estate or land in Turkey, thus ensuring the value of the money and even developing it.
The consequences of the high prices of apartments in Turkey:
Just as every action has an equal and opposite reaction in the direction, the same applies to the rise in house prices in Turkey. This matter has many repercussions on the buyer and investor, as well as those who are thinking of owning an apartment in Turkey, here are the most prominent of them:
Congratulations to those who took the opportunity:
The investor who bought real estate earlier has benefited from the high price of his apartment and thus has made a profitable investment without incurring trouble. This benefit was doubled for the foreign investor by obtaining Turkish citizenship , thus killing two birds with one stone.
Recovery of the Turkish economy:
It is not only the investor who benefits from the rise in house prices in Turkey, as well as the Turkish economy began to grow again by 7.3% at the beginning of 2022 compared to the same period last year.
A powerful catalyst for construction companies:
The establishment of more apartments and real estate in Turkey has become an urgent necessity in light of the high demand for buying real estate in Turkey by Arab, foreign and local buyers and investors. Now they have a huge stream of people who buy apartments and thus huge profits, which is why major construction companies compete to launch more homes and residential projects of all kinds.
The tenant loses and the landlord wins:
In this spiral, the owner emerges victorious due to the high rental return on apartments and thus achieving a sustainable monthly profit without fatigue, while the house remains under his ownership. On the other hand, the tenant who does not have the price of an apartment in Turkey loses and resorts to renting an apartment and paying money monthly, and in the end it will not be his property.
Mersat Real Estate Vision and Future Outlook:
Mersat Real Estate favors the victory of the Turkish real estate market as it continues to make qualitative leaps among the rest of the real estate markets around the world based on several reasons:
- Real estate prices in Turkey are cheaper than in European countries, and the tax price of apartments in Turkey is almost negligible when compared to the tax rate in European countries.
- A safe haven for many Arabs due to the political and economic fluctuations witnessed by some Arab countries, in addition to the possibility of obtaining Turkish citizenship.
- In light of the Ukrainian-Russian war, Turkey has become one of the best countries for stability and housing, which will benefit the real estate market in Turkey.
- Projects and infrastructure that the Turkish government does not hesitate to build and develop, such as the promising Istanbul Water Canal, so investing in real estate in it is a right choice.
Prices of apartments in Turkey | Real estate prices in Turkey | Apartments for sale in Turkey | Turkey real estate
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