Investing in Property in Turkey

When you're looking for property in Turkey, the first thing you need to know is what's available: not the specific houses or apartments but the types of property commonly found. Just as important are the typical prices you will have to pay for any given type of property.

The property market in Turkey

Obviously, within any type of property, prices can vary enormously depending upon all sorts of factors (such as location and condition) but an overview of the typical range of prices is still useful. It will help you navigate estate agents’ websites.

The Turkish property market peaked – and crashed – along with the others in the Mediterranean in the mid-2000s. However, Turkey has enjoyed a stronger, swifter property market recovery than some of its neighbours.

The market in Turkey has suffered with the tribulations faced by the country itself: political uncertainty, some unrest, the influx of millions of refugees and wars in many of its neighbouring countries.

The size of the market

In 2016, 1,341,453 houses were sold in Turkey. This was an increase of 4% on 2015.

Of these sales, nearly 450,000 were made with the assistance of a mortgage. This number is increasing rapidly (for example, in December 2016, the number of sales involving a mortgage was up 21.8% compared with the same month of the previous year). Mortgages have become available to ordinary, middle class Turks, and this seems likely to further increase the number of sales in Turkey and put some upward pressure on prices.

In December 2016, there were 142,713 house sales. Almost exactly one half were to first time buyers.

Coincidentally, resales (second-hand houses) also made up almost exactly one half of the market.

The type of property being sold

Probably because of Turkey’s growing population, and mass migration to the cities, the most common purchase is a new property.

Amongst foreigners, over 80% of properties bought in Turkey are new, or very recently constructed. The main exception to this is in Istanbul, where there is a strong market for older properties in the old part of the city.

There is a huge variety of property on sale: from large and very expensive villas down to tiny apartments.

By and large, the people buying the expensive properties tend to be Turkish. People buying middle-range properties tend to be from Turkey, the Middle East or the former Soviet Union. Western Europeans usually buy smaller holiday homes – either apartments or two- or three-bedroom villas.

Resale properties vs new build properties sold

In December 2016, the shares of new vs resale properties were almost even:

Average property prices in Turkey

House Price Index

Turkey’s House Price Index is released monthly. You can view it here.

The historical data below was taken from January of each year.

How many foreign buyers are there in Turkey?

In the whole of 2016, 18,189 properties were sold to foreigners. This was a decrease of 20.3% on 2015, and a huge reduction on the numbers in the peak years of 2006/7.

Of the sales to foreigners, 5,811 were in Istanbul and 4,352 in the province of Antalya.

Where are the foreign buyers coming from?

Of the foreign buyers, the largest single contingent came from Iraq (3,036), followed by other Middle Eastern countries. Russians bought 1,224 – almost the same number as people from Afghanistan.

The number of sales to Western Europeans were down substantially. Three of the big buyers have, historically, been the Germans, the British and the Dutch. The number of British buyers in 2016 fell to 827 from 1,054; the number of Germans to 714 from 869; whilst the number of Dutch remained more or less stable at about 200.

Interestingly, nearly 30% of houses in Turkey are bought by women.

Who sells property in Turkey?

There are no official statistics as to the different groups of people who sell property in Turkey but, anecdotally, the overwhelming majority of property is sold via estate agents or via personal contacts.

Foreign sellers vs local sellers

The number of foreigners selling property in Turkey dropped to almost nothing after the 2007 crash. However, their presence is slowly but surely making itself known again as the property market recovers. Once again, there are no official statistics.

  1. graham webb says:

    Hello, I understand can only lend to households in lira. Please advise if this is the same for commercial property – the denomination must be lira not USD. If so, is the an allowance for currency fluctuations….Thanks Graham Webb

    • Francine Carrel says:

      Dear Graham

      As far as I’m aware, Turkish mortgages – certainly for housing – are still available in USD (as well as EUR, GBP and even RUB from some providers). There may be some institutions who are only looking to finance in lira.

      We have a guide to buying commercial property in Turkey here and a guide to mortgages here, but as it is very difficult for foreigners to get finance for commercial real estate in Turkey we do not go into detail on mortgages for these properties. Tools such as REITs are more common for investors, while business owners often rent or pay cash for property.

      If you are looking for tailored financial advice, I would highly recommend Burak Orkun, our accountancy partner in Turkey. You can reach him through turkey-accountant@GuidesGlobal.com.

      It doesn’t answer this particular question, but, this Q&A, by Thomson Reuters, may be of use to you: I came across it the other day, and they seem to focus on commercial real estate in particular.

      The Banking Regulation and Supervision Authority (+90 (212) 214 50 00) may also be able to assist.

      Very best,

      Francine
      (Assistant Editor)

  2. graham webb says:

    Thank you Francine,
    I am doing a bit of work for a Company who is looking at commercial and residential real estate in Turkey but who first always performs an indepth review of the macro economy.
    I will contact the other resources you have suggested.
    Please advise if you would know if mortgages have an inflation index component – ie in some countries the mortgage can be annually adjusted to take into account the inflation fluctuation.
    Thanks again
    Graham webb

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