Will 2023 be a good year for investment in real estate in Türkiye?
The future of the market in 2023 seems to be very complicated to predict. Professionals in global markets are estimating a downtrend for the housing market. That means more stable prices than 2022, even lower prices and lower demand. he global economy has suffered from the post-Covid-19 crisis and the Russia-Ukraine war over the past two years. However for Turkey the story may be quiet different.
Based on a report by UBS Global Real Estate Bubble Index 2022 many regions are facing bubble prices in real estate like Munich, Vancouver, Torrento and only few cities are estimated to have fair value like Dubai, Milan and Sao Paolo.
How was Tükiye’s Property Market in 2022 ?
In 2022, based Homist Analysis, Turkey’s property market in terms of number of transactions lived the similar numbers the same as previous years whereas Foreign investment accounts for only 5% of all transactions (1,485,622 units).
In terms of value YOY prices index shows average 165% increase in prices properties in Turkey. That number is extremally fascinating, isn’t it? But the story behind increase in prices of household come to super inflation and Turkish Lira devaluation. Actual capital application in real estate market on average won’t exceed 10%. However in cities like Istanbul, we have number of properties which appreciated more due to high demand.
Foreign investment:
In 2022, although the share of foreign investment was less than 5% of total transactions, but the number of foreign investors increased significantly. Russia-Ukraine war led to increase in number of investors from both countries.
Main factors to be considered in property market of Istanbul in 2023:
There few key effecting factors that any investor should consider before any action in Turkey’s market. We have shortlisted them as below:
- Presidential Election which will take place in May 2023
- Interest rates and inflation level
- Turkish Citizenship Program and recent major changes
- Istanbul International Finance Center opening
- South Turkey’s deadly earthquake direct and indirect effects in property market & economy of Turkey
- Recession in global economy
- Russia-Ukraine war
- Shifting trends in property market of Turkey
As it can be seen, predicting the future of the property market in Turkey is an extremally complex and challenging, as it is influenced by a wide range of economic, political, social, and environmental factors. However we assume that 2023 won’t be a booming market in real estate sector with a high probability. On other we assume many positive factors can empower the real estate market. Cost of construction will be highly affected by huge increase in demand due to Turkey’s South earthquake which demolished almost 70% of residential areas. On the other hand, government may set new regulations for new constructions which will directly effect in sales prices of constructions especially the residential complexes.
Turkey Will have Stable Market in 2023
Turkey housing market prices will not sharp surge and hopefully won’t fall dramatically, Investors would better to take more conservatives decisions for in investment in Turkey Real Estate Market in 2023
Homist Team of consultants
Homist’s analysis shows that many factors will affect Turkey’s property market. That will lead investors to be more conservative in their investments in Turkey’s market. Statistically, 2023 will not follow the extraordinary growth trend that occurred from 2018 to 2022. In general, Foreign Investors may taken risk averse strategy and their return outlook will be moderated, similarly the demand-supply balance has been effected during 2022. We highly advise our clients to thoroughly analyze the offers they receive from developers or agents. However in long term there is no doubt Turkey’s real estate market would appreciate the investment in real estate with acceptable Return on Investment (ROI). The presidential elections is another effecting critical factor that plays critical role for property market in Turkey which will take place not later than July 2023. The opening of the Istanbul International Finance Center (IIFC) in Istanbul might be one of the few positive factors that could affect growth in property prices. Several developing enterprises and contractors will engage in recovery of southern Turkey to build more than 50,000 houses in affected areas which may lead to shortage of supply in the other regions likes Istanbul and effect in prices of properties.
Rental market might be more attractive than BUY/SELL market
Depending on the asset class of investors (commercial, retail, residential or industrial), we expect considerable growth on rental rates almost in all asset classes.
HOMIST TEAM OF CONSULTANTS
Final Note:
It’s important to note that a wise investment in real estate in all types of market all over the globe can be profitable at any time, but the real estate market can be subject to changes which requires experience and knowledge. It’s always best to conduct thorough research and consult with professionals before making any investment decisions.
Our professionals at HOMIST will assist you with valued advisory service for all types of real estate transactions in Istanbul, from idea to development and completion, buy & sales and property management or long-term income asset and many other related services.
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