Increasing Rates of Real Estate Market In Turkey 2020

Feb 24, 2020


There are many factors that affect the real estate market in Turkey. We can list these as population growth, migrations around the world, natural disasters, renovation of existing residences, growth of shopping centers, increase in companies with the development of the service sector and accordingly, the increase in commercial usage, and the rapidly growing logistics sector in our country, as well as the increase in the construction sector.
 
The location of the real estate to be invested is also very important for the future value of the investment. We can say that investment in the rankings ahead of Turkey in Istanbul. We can list the reasons for the preference of Istanbul as an investment center in Turkey and abroad, as the property sales rates are high in Istanbul. We can count the important features such as the development of the transportation network, the prevalence of the industry sector, the development of industrial investments here, and its historical importance for tourism. The real estate market for sale in Istanbul is developing more with foreign investors.  
   

The property prices gained in value nearly %10 last year across Turkey. This valuation took place %81 since 2010
For Europe’s most promising real estate market Turkey, generally the statement is  "location, location, location" and it’s the most appropriate saying for the Real Estate Market in Turkey because Turkey, with its strategic location intersection between Europe, Middle East and Asia and a 81 million population, offers great opportunities for real estate developers and investors by bringing the strong construction sector with the growing commercial and industrial manufacturing together.

  

Some important facts and figures on the real estate sector in Turkey are as follows:

  • The real estate sector has made up about 8.4% of GDP in the past decade. On the investment side, the total foreign direct investment (FDI) inflow was recorded as US $ 10.8 billion in 2017, while the share of real estate and construction sectors in this amount was US $ 4.6 billion (42.9%).
  • Urban transformation studies and mega projects, especially for Istanbul, direct the activities in the near future. Marmaray, Kanal Istanbul, Yavuz Sultan Selim Bridge, Eurasia Tunnel, 3-Storey Grand Istanbul Tunnel and Istanbul’s 3rd airport are among the mega projects in the city.
  • The Urban Renewal and Transformation initiative will cover 7.5 million residences. The private sector contributes greatly to this initiative, which has a budget of 400 billion USD.
  • According to the Knight Frank Global House Price Index, in Turkey the annual price index increase has taken place # 6 out of 56 locations in the 3rd quarter of 2017. Turkey, with prices showing an annual increase of 11.1%, leaving behind Latvia, Australia and India and has become one of the world’s best housing markets.
  •  The total number of residential properties sold in the market of Turkey in 2017, reached 1.4 million units. Real estate sales to foreigners started to increase with the abolition of the reciprocity law in 2012. In the sales of residents to foreigners, Istanbul ranked first with 8,182 sales in 2017, followed by Antalya with 4,707 sales, Bursa with 1,474 sales and Yalova with 1,079 sales.
  •  A+ office stock in Istanbul exceeded 5.3 million square meters in 249 office buildings by the end of 2017. The average annual increase in the gross leasable area in the office market between 2010 and 2017 was about 12%. The construction of more than 1.2 million square meters of office supply is ongoing and as of the end of 2020, the total A+ office supply is expected to reach approximately 7.1 million square meters of gross leasable area.
  • Turkey has 401 active shopping centers; The total gross leasable area in these shopping centers are 12.2 million square meters. 4.2 million square meters of gross leasable area of ​​114 shopping center in Istanbul, corresponds to 34% of the total leasable area of ​​the shopping centers in Turkey.
  •  Istanbul is the 6th most attractive market in Europe after London, Paris, Moscow, Milan and Madrid, according to the JLL 2016 Cross Border Retail Attractiveness Index.
 
Especially in the last 10 years, there has been a serious movement in the real estate sector.  Residential, office, shopping mall, hotel projects are rising one after another. This picture is the return of a global cycle. It is expected that the real estate sector will witness a significant growth worldwide until 2020 with rapid urbanization and demographic change, especially in developing markets. According to 2020 reports, the value of investable real estate assets, which was $ 29 trillion in 2012, is expected to reach $ 45.3 trillion by 2020 with an increase of 55 percent and this upward trend will continue until 2030. The intense competition in the primary real estate world, forces real estate managers and investors to seek new opportunities to generate profits. The real estate sector, which is at the center of rapid economic and social change, causes the current living spaces to transform rapidly. While the prosperity and wealth in new economies such as Asia, the Middle East, Latin America and Africa increase migration to these regions, this trend is expected to continue until 2020. According to estimates, while the important population movement in these regions continues to increase the population in the existing cities, it will also cause the emergence of new cities.  While the middle class is rising in developing economies, on the other hand, the demand for new real estate types such as sites outside the city for the aging families in the current population, and small flats without a kitchen or parking space for the young population living in the city. Urbanization, demographic change and scarce resources are expected to be very important determinants in the future of the real estate sector. The future will witness a real estate environment in which “mega cities” stand out, not countries.  

7 million houses will be constructed

The common belief is that, with the target of Istanbul to become the world capital with new investments, it will go very fast in the name of the sector and the economy in the next 10 years. Experts state that realizing urban transformation with qualified housing projects in all segments has become the primary target of the sector. "No matter in what direction the economic developments in Turkey and the world rapidly producing sector will continue to grow," they say. Especially in Istanbul, Turkey, including all of the existing building stock needs to be refreshed with qualified residential sector will be decisive in the 2023 journey. According to the Real Estate Sector report of Gyoder in 2023 Vision, it is envisaged to produce 7 million 560 thousand properties by 2023. This figure is almost twice the housing production realized by the sector since the early 2000s.            

Halkalı in Europe and Fikirtepe in Anatolia will develop

The regions that will mark the next 5 years will be the regions transformed from the industry with the regions that will be affected by transportation and large-scale city projects. In this context, the regions such as Halkalı, Bahçeşehir, Hadımköy on the European side and the regions where the new metro projects on the Anatolian side will be activated are the primary ones. In addition, the regions that will be affected by the Marmaray and Bosphorus tube crossing, the 3rd bridge and the new city projects connecting the two sides are also prominent regions for investment in the medium and long term. First of all, Istanbul is one of the most important megacities in the world. Istanbul has a young and working population. As it is a growing city, the need for properties arises. Apart from the properties, Istanbul has become the heart of the business world. Office needs of headquarters of foreign brands have also increased. It is generally one of the favorite cities of investors since it has a fast growing market supported by a strong economy. There are many different and qualified projects in Istanbul that can meet different needs.
 

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