Investment attractiveness of Turkish real estate

Investing in foreign real estate is a promising direction that guarantees a high return on investments. The Republic of Turkey is a leader in the list of countries with investment opportunities. The constant increase in the number of buy-sale agreements with foreigners serves as undeniable proof.

Our article provides detailed information about whether it is worth investing in real estate in Turkey, the promising investment schemes, and the return on investments.

What does the Turkish market offer to a potential investor?

The policy of the Turkish authorities is aimed at the active development and increase of foreign investments in the real estate market. This opens up great investment opportunities for investors from abroad in the long and short term.

Investments in real estate in Turkey are profitable in many ways. The players in the construction market have a lot to offer to potential buyers. In particular, a wide selection of:

• Budget apartments. Inexpensive apartments for recreation and living ideally combine the low cost and quality of construction. You can invest even with a minimum budget for the purchase.
• Luxury real estate. Luxury villas and houses by the sea in Turkey are built as part of residential buildings with modern infrastructure, security, parking, and other amenities.
• Discounted accommodation. Turkish developers offer beneficial terms for some categories of purchase: a promotional price for the first buyers of apartments in a new residential project, discounts for the last apartments in the building, and a minimum price for housing at the initial stage of construction with interest-free instalments plan, and many more.
• Guaranteed income from real estate investment. Developers provide foreign investors with an opportunity to invest in real estate with a high return on investment in the short and long term. For example, you can invest in the construction of hotels, villas, hotel-type residential buildings, etc.

With such a large selection, you can choose the most profitable option for yourself. A competent approach practically eliminates the risks related to investing in real estate.

The dynamics of prices and the situation in the real estate market in Turkey

Of course, pandemic and related restrictions could not but affect the demand from foreign buyers, significantly reducing it. Although, it did not affect the main trends in the development of the Turkish real estate market, leading to an increase in the number of investors.

The Republic of Turkey is confidently striving to join the European Union, increasing its economic development indicators every year. In addition to the excellent location and high standard of living, this aspiration is one of the main reasons why many foreign investors buy various types of real estate in the country.

Additionally, over several years, the government has adopted several innovations that stimulate investment in real estate in Turkey, including:

• Flexible tax system and low government payments.
• Simplified real estate purchase procedure.
• Opportunity to issue interest-free instalments and mortgages with reasonable interest rates.
• Guaranteed inheritance and gift rights.
• No need to verify the source of income for overseas buyers and more.

Today, high demand causes a shortage of new real estate for sale in the resort regions. Many construction companies are already implementing projects for 2022-2023 to satisfy the needs of all buyers.

The dynamics of prices in the Turkish market. According to the Institute of Statistics, real estate is growing in price much faster in coastal regions than the average increase for Turkey. In particular, the price increase on the coast is 70% higher than in other regions. Thus, the cost per square meter in the Republic has increased by almost 34% and up to 58% in resort regions over the year.

The most expensive resort the real estate on the Aegean coast (in the province of Mugla). A less active increase in price per square meter is observed in the Mediterranean resorts. Alanya has become a well-deserved and expected exception in terms of rising prices, where the purchase of real estate has been and remains in demand among English-speaking citizens and Europeans.

The cost of apartments in new residential buildings with modern infrastructure is:

• About €60,000 for a 1+1 apartment. Of course, you can buy housing for a smaller amount, but you should consider that these will be apartments in a residential building of non-new housing stock with poorly developed infrastructure.
• Approximately €80,000 – €100,000 or more for a 2+1 apartment. The cost depends on the requests of the investor.
• €110,000 – 120,000 for 3+1 apartments.

Villas and houses of the premium category will cost the buyer on average € 150,000. Of course, you can choose both cheaper and more expensive options.

Popular schemes for investing in Turkish real estate

How to start investing in real estate in Turkey? You can start with the choice of investment-attractive schemes. According to experts, these areas are:

• Purchase of a home to rent it out. This type of investment is both profitable and safe. The resulting profit will allow you to quickly recoup the investment and receive a stable income from rent in a few years.
• Guaranteed rent is available for foreigners in cooperation with real estate agencies.
• Purchase of land plots for commercial and residential property construction - hotels, residential complexes, etc.
• Purchase of an apartment in a building under construction with subsequent resale. The rise in price per square meter occurs in stages. As a rule, the difference in cost at the pit stage and ready-to-move-in real estate is about 30%, so after the TAPY is issued, the investor can profitably resell the real estate.

Profitability of investment projects in Turkey

According to experts, the liquidity of real estate depends on its characteristics, location, arrangement, and the purpose of the purchase. Pay special attention to this when making your choice!

Income from the real estate investment in Turkey is:

1. When purchasing an apartment in a building under construction at the pit stage will save about 30% of the cost of finished housing. Capital gain for a year and a half on average - 20-25%.
2. Resale of liquid apartments in the secondary market guarantees the owner about 10-13% of profit per year.
3. Profitability from renting residential property depends on the characteristics of the object and the type of lease (short-term, long-term). As a rule, the average profit is about 7-10% per annum.

Only experienced real estate agencies will provide you with professional advice on investing in real estate in Turkey. The specialists of the licensed company New Time Investment will calculate potential risks, select the best real estate, and help you finalize a buy-sale agreement. We are in touch 24/7!