Istanbul Property Market
Real Estate is the leading sector in Turkey. It is the most common investment instrument for both local and foreign buyers. Although housing market in all cities has high volumes, Istanbul property market is the highest one by far in Turkey. If you decide to make a real estate investment in Istanbul, there are few things that you should know and evaluate in order to understand Istanbul property market best.
Evaluating the Area
Area decision is one of the most important things when you decide to buy property. Property prices change dramatically from one area to another even though the apartment has the same square meter and quality. This difference is all about the current and future potential of the area. Even though the same type of apartment is more expensive in some areas, the return of investment can be higher in terms of price growth and rental income.
For instance, in 2018, in a new project, average 1-bedroom apartment in Bomonti, Sisli area was 150.000 USD while the same type of apartment in Esenyurt area was 40.000 USD. By 2020, average 1- bedroom apartment in Bomonti, Sisli became 250.000 USD while Esenyurt is still no more than 50.000 USD.
You may decide to buy property or properties in Turkey but you don’t want put too much cash. In Istanbul property market, there are projects that apply internal payment plans without involving banks. Most of the on-going projects offer customers a payment plan as in %30-50 cash payment and 24-36 months equal investments. If a project is delivered, length of the payment plan drops to 6-12 months.
In addition to internal payment plans, you can always apply to banks for a mortgage loan in order to have a long-term payment plans. As a foreigner, you can apply to Turkish banks for mortgage loan as long as you have a valid payroll from your own country or any other verifiable income. In this kind of payment plan you usually pay minimum %50 down payment and you can have installments up to 120 months with stable interest rates.
However, if your purpose is to apply for a Turkish citizenship by investment, you may want to re- calculate payment plans for yourself. Because, in order to apply for a Turkish citizenship, you must invest 250.000 USD amount in cash or you can apply to Turkish citizenship once your total payment reaches to 250.000 USD.
As well as in all the property markets, there are also unique features in Istanbul property market that add or lose value to your property. For example, let’s say you decide on the project that you want to buy property. While you are choosing your apartment in the project, always better to choose a unit with sea view or forest view despite its more expensive. Because, once the project is delivered, there will be many units same with yours and you want your property to stands out as an investor. So, a unit with better view will have more chance to be rented out faster or sold back for higher amounts and within shorter periods.
On the other hand, lowest floors, blocked views and apartments with useless layouts must be avoided even though it seems very reasonable since it will give you a hard time when you want to rent out or sell it back.
There is a very small chance to encounter with a legal problem if you buy apartment from a developer directly but for re-sale options it is good to know and keep in mind few legal points. Firstly, be sure about the tittle deed status is kat mulkiyeti (desginated unit) or kat irtifakı (construction servitude) which is on process of kat mulkiyeti. If the tittle deed status is not either of these 2 statuses, the apartment that you are looking for might have a legal problem and could be ungranted by banks (for mortgage).
Second thing that you need to be sure that the declaration of the price must be done from the exact price to the tittle deed office. Sometimes sellers may be willing to declare the house price lower in order to pay less amount of tax but this causes you a trouble once you sell it back.
In summary, Istanbul property market is one of the fastest and most profitable property markets in the world. When you search in advance and consider the important things before you make an investment, there is big chance that you can make an investment that will make you happy over the years. We as Century21 Sinerji Istanbul always here for our clients to help out with every step of property buying process in Istanbul and make sure that they make the right investments.