Why Property Prices Are Rising In Turkey
Eager real estate investors looking for countries with falling house values should know property prices are not falling in Turkey. According to the Central Bank of the Republic of Turkey, over the last year, up until the Quarter of 2021 period, house prices rose by a staggering 30.6%. Real estate experts say that when you factor in inflation, the result is more like 13%. Regional increases also differ with Istanbul now averaging 6,312 Turkish lira per square meter, and in Ankara, it averages out at 2,972 Turkish lira per square meter.
Fortune magazine quoted an increase of 32% year on year. Adding, " Turkey led all countries for the fifth straight quarter. Heavy-handed interventions by President Recep Tayyip Erdogan to keep interest rates low have caused citizens to flee the Turkish lira for the safety of hard assets. Half of the country's 32% gain in housing prices stemmed from baseline inflation effects."
Knight Frank, the Global Property Market Insight Magazine, says many countries worldwide are seeing the highest increase in property prices since 2006. They said, "Turkey leads the rankings for annual price growth for the fifth consecutive quarter, but strip out inflation, and real prices are rising at around 16% per annum." With this in mind, let's look at why property prices are increasing in Turkey and predict future house values.
Why Property Prices Are Rising In Turkey
Covid and Increased Construction Costs
Covid made an impact on the Turkish real estate market with a change in residential property trends. As home buyers are looking to get out of the large, congested cities where apartment living is the norm, they head to coastal resorts and small towns and villages. In addition, they want to purchase private villas with a garden and a small office in the case of people working from home.
With no signs of Covid going away, the increase in demand will undoubtedly continue, driving the house price in Turkey up even more. Notable places seeing more demand from people who want to buy private residential properties include the Antalya, Fethiye, and Bodrum coastal regions. The other factor impacting house prices is the economic sector.
Building materials and construction costs are rising, especially in the case of where a developer imports iron instead of buying it domestically. Add this to the high inflation, poor performing Turkish lira, and the increase in house prices is easy to see. So, what does the future hold?
What to Expect of Property Prices?
For anyone looking to invest in the housing market of Turkey, the time to do it is now, since all expert predictions say that house values will not decrease but grow. This is because the Turkish lira economy problems are not expected to be rectified for another few years. Additionally, the other factor is that while there is a drop in the number of foreign buyers in Turkey, they will come back once global travel rules are back to normal, hence providing more demand. Ever since Turkey jump-started their housing market at the turn of the century, it has always been an ideal mid to long term investment, and house owners are seeing the effects of their investment and will continue to do so in the near future.
Cheapest Place to Buy Property: When it comes to analysing the housing market in Turkey, it also helps to drill down to regional trends. Some places in Turkey are known for their luxury properties that dominate the market for high rental yields. In contrast, others are known for their affordability. This article looks at destinations that house buyers in Turkey should head to if they are on a budget.
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