Investing in the Real Estate Market in Turkey 2023
- What is Property investment?
- Benefits of Investing in Turkey:
- Profits and Return of Investment (ROI) from Real Estate
- Property Taxes in Turkey:
- Secure Real Estate Investment Options:
- Turkish Government's Plans for Maintaining Real Estate Market Balance in the Future:
- The Government Support for the Turkish Properties Sector:
- Best Ways to Invest in Turkey for Obtaining Real Estate Residency:
- Investing in Properties for Obtaining Turkish Citizenship:
- The Difference Between Under Construction and Ready Properties:
- Residential Real Estate Investment:
- Investment Methods and Expected Returns (R.O.I)
- Commercial Real Estate Investment:
- Most Important Cities for Real Estate Investment in Turkey
- Most Important Areas in Istanbul for Real Estate Investment
- Successful Real Estate Investment Strategy
- How Damas Group Real Estate Can Help You Obtain a Profitable Investment Property
What is Property investment?
Real estate investment is highly popular in Turkey, capturing attention from both local and foreign investors.
- Turkey's strategic location
- Strong economy (13th globally, 5th in the EU)
- Thriving real estate market, it's a compelling option for property investment. It holds the 4th position among the top ten real estate investment locations globally because of its infrastructure and amenities. This makes it an appealing choice for investors seeking Variety & profitable returns.
In this article, we will thoroughly discuss Turkey's real estate market from an investment perspective.
Note: This article focuses solely on real estate investment. For a dedicated blog post about the Turkish housing market study for end users, stay tuned.
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Benefits of Investing in Turkey:
1. Competitive Prices and Financial Returns:
In comparison to many European and global countries, Turkey offers good value for money when purchasing properties. Buyers can acquire comfortable and attractive properties at reasonable prices considering location, infrastructure, and service levels.
Where you can find for best prices Luxury villas in Turkey, Turkey villa holiday, stunting apartments in Turkey.
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6. Growing Real Estate Market:
Turkey's real estate market is expanding because to increased demand for homes and commercial spaces from locals, tourists, and international investors.
7. Advanced Infrastructure:
Turkey has witnessed significant infrastructure growth with the development of airports, ports, roads, railways, and communication networks. This boosts the country's investment appeal, with Istanbul's metro lines as a standout, setting a European record for the longest line.
8. Active Tourism Sector:
Turkey's thriving tourism draws many visitors, spurring demand for hotels, furnished apartments, and tourism properties, bolstering the real estate market.
9. Oasis for Arab Investors:
Turkey is attractive to Arab tourists and investors for its appealing economic gains, whether from property sales or rental income.
specially the ones that are looking for buying property in turkey for citizenship.
villa for sale in Istanbul or an apartments for sale in Istanbul
Profits and Return of Investment (ROI) from Real Estate
Investment returns from real estate properties in Turkey are generally more attractive compared to some other European countries. This is because to the well-balanced combination of property costs and financial returns.
Occasionally, your real estate profits could even multiply, as seen in the 2021-2022 period.
There are several ways to achieve investment returns from real estate in Turkey:
1. Long-Term Rental:
Long-term leasing is one of the most significant methods to achieve investment returns. Finding tenants for extended periods ensures stable income over the long term. Annual rental yields can reach an average of 5%.
2. Short-Term Rental:
Short term rental is a great source to achieve a high retune (ROI).
The opportunities for short-term rentals are even greater in major tourist cities and areas with high tourism activities. the annual income from short-term rentals in Turkey ranges between 8% and 15%.
and you may achieve it using famous property rental apps such as Airbnb and other sorts of rental sits
3. Property Value Increase:
Turkey is witnessing continuous growth in property demand, leading to an increase in property value over time. Investors can achieve substantial profits from selling properties, and the average increase in property value is around 22% annually.
During the period between 2021 and 2023, the value of properties for sale in turkey increased by 153%.
4. Commercial Operation Returns:
Investing in commercial properties turkey like shops, hotels, or offices can provide additional income through commercial operations.
5. Industrial Investment Returns:
Investing in industry in Turkey is a successful way to invest. It involves buying land or factories to make and sell products worldwide. Local production contributes to around 29% of the national output.
Remember, investment returns depend on factors like location, property condition, and the market. Reliable local real estate brokers are essential for accurate info and investment options.
Before you invest, it's smart to do a thorough feasibility study and understand local real estate laws in Turkey. At Damas Group Real Estate, we offer this service to help you secure your investment property confidently. Click here to contact us.
Property prices for sale in Istanbul increased by 4.32% last month. The average price per square meter for residential properties in Istanbul is 28,669 Turkish Lira. In Istanbul, a 100-square-meter home averages between 2,150,178 and 3,583,600 Turkish Lira. As of the 2023 Real Estate Index and Regional Reports of Turkey.
The annual increase in prices usually averages around 22% in property values.
The following table displays the percentage increase in property prices over recent years.
The following represents the percentage increase in buying and selling prices.
Disadvantages of Investing in Turkey:
While real estate investment in Turkey offers many benefits and opportunities
It's important to acknowledge the potential drawbacks and challenges that come with property investment in the country. Among the main disadvantages are:
Language and Cultural Challenges:
For foreign investors, there may be language and cultural challenges when dealing with property buying, selling, and investment processes.
Legal and Bureaucratic Procedures:
Legal processes in Turkey can be intricate for foreign investors, potentially requiring significant time for obtaining permits and completing procedures. Click the link to learn more about the laws.
Oversupply in Certain Areas:
In certain tourist and urban areas, high demand can drive up property prices. This complicates the search for reasonably priced investment opportunities.
Foreign Ownership Barriers:
Turkey has restrictions on property purchases by foreign citizens, with specific conditions and ownership limits in place.
Changes in property laws and regulations can affect the rights of investors and lead to interruptions or delays in investment procedures.
Investors should research thoroughly and seek advice from a local legal advisor or experienced real estate agent before investing in Turkey. This helps to understand potential precautions and challenges and reduce risks. Contact us for assistance.
Property Taxes in Turkey:
In Turkey, property tax is a fixed amount applied to buyers, sellers, or both, based on property purchase or ownership transfer. This payment goes to the Turkish Property Tax Department, with tax details varying based on value and payment schedule.
Property taxes in Turkey include one-time and annual taxes. The tax rate generally varies from 1% to 6%, depending on the property type and city.
In Turkey, property taxes consist of three main sections, detailed below
- Property Transfer Fees:
The buyer pays this tax once when transferring property ownership from the seller. Usually, the rate of this tax is around 4% of the property price listed in the sales contract. This tax is equally divided between the seller and the buyer according to the agreement between them.
- Property Ownership Tax:
This tax, about 3.9% of the property price, is a single payment for property ownership without transfer. It is an additional tax on enjoying property ownership.
- Purchase Contract Fees:
the payment should be apply in the notary public "noter". They include fees for translating the buyer's passport into Turkish and certifying it with the notary public. The value of these fees is approximately $50.
These property taxes involve fees paid at purchase, with rates based on property value and transaction.
Buyers and sellers must be aware of these taxes and their distribution before purchasing to prevent unexpected surprises.
You can learn more about property taxes by clicking here.
Secure Real Estate Investment Options:
Choosing the Right Property:
Investors consider investing in the real estate market as one of the safest and most profitable investments. However, this does not negate the importance of considering some factors when buying property in Turkey:
- Developer Information:
It's always essential to verify the credibility of the project developer, the type of previous projects completed, and the completion percentage. Most Turkish projects come with a government guarantee, ensuring investor funds' security and the completion of the project.
Apartments in Istanbul are usually having on the best developers to trust.
Project Registration with the Government:
Registering the project with the Turkish government is crucial to secure property ownership registration (title deed).
Building Condition for Completed Projects:
Certain buildings could face demolition at the request of the Turkish government, often because to earthquake susceptibility, age, or safety concerns. If a building is not earthquake-resistant, it poses a risk to investment and might collapse in case of an earthquake. Click here
It's crucial to review the official documents and information of the seller through legal channels to ensure transparency.
At Damas Group Real Estate. We always strive to provide accurate and official information to ensure your investments are secure through our expert team.
Turkish Government's Plans for Maintaining Real Estate Market Balance in the Future:
Turkey's economy relies significantly on the real estate sector. The government emphasizes its growth and a stable market to benefit both investors and citizens. The government's plans include several important initiatives:
The government aims to enhance public infrastructure and real estate structures to attract more real estate investments and develop modern areas.
The government aims to manage the real estate market by:
- Legal Support and Assurance:
To ensure investors' safety and guarantee the completion of new construction projects and key delivery to buyers. read more
- Attracting Foreign Investments:
The Turkish government aims to lure foreign investors to Turkish real estate by providing tax incentives and favorable laws.
- Housing Support:
The government seeks to provide housing support programs for citizens and investors to encourage the construction of affordable homes.
- Sustainable Development:
The government prioritizes sustainable development, balancing real estate expansion while preserving the environment and utilizing sustainable energy sources.
- Simplifying Property Title Processes and Security Checks:
The government works on facilitating the process of obtaining title deeds and necessary security approvals.
The Government Support for the Turkish Properties Sector:
The Turkish government provides diverse support for the real estate sector with the aim of boosting investment and encouraging economic growth. Among the supportive governmental measures for the real estate sector in Turkey are:
- Tax Incentives:
The Turkish government provides tax benefits to real estate investors, including exemptions for specific projects and lower property tax rates. Read more.
- Easing Home loan:
The government provides citizens and investors with favorable financing and loans for property purchases or real estate projects.
- Social Housing:
The government is dedicated to offering social housing and affordable residences to low-income individuals and socially disadvantaged groups.
- Support for Major Projects:
The government seeks to support large-scale real estate projects that contribute to urban development and the growth of new areas.
- Infrastructure Development:
The government focuses on improving public infrastructure, including roads, facilities, and public transportation, to raise property values and attract increased investments.
- Legal Protection:
The government strives to enhance laws and regulations concerning the real estate sector, safeguarding the rights of investors and buyers. This involves ensuring legally secured projects and completion, even if developers pause their work. Read more.
Best Ways to Invest in Turkey for Obtaining Real Estate Residency:
Investing in Turkish real estate enables investors and foreign property owners to secure residency visa, determined by the property's value. Here are some general details about the law related to obtaining real estate residency in Turkey:
General Conditions: Applicants need to buy a property of a designated value, which varies by province and government rulings updated regularly.
The applicant must avoid selling the property for a set duration, typically about two years, after gaining real estate residency.
Application Procedures: Applicants need to submit an application for real estate residency to the relevant governmental authorities. The application involves submitting crucial documents like the property title deed (tapu) and verifying that the property value meets the specified criteria. Click here to learn more about the requirements.
Validity Period: The law grants temporary residency through real estate investment, initially lasting between 6 months to 1 year. Afterward, the residency can be extended for longer periods based on the conditions.
You can further delve into this topic by reading the following article.
Read also: Properties Eligible for Real Estate Residency.
Investing in Properties for Obtaining Turkish Citizenship:
Foreigners can obtain a Turkish passport by purchasing property in Turkey valued at $400,000 or more. Additionally, they must agree not to sell the property for approximately 3 years. The required investment value varies based on different timeframes and government decisions.
We have dedicated a separate and comprehensive article to obtaining Turkish citizenship. (Click here to read more)
The Difference Between Under Construction and Ready Properties:
Under Construction Property off plan:
Also referred to as a new property.
It's a real estate project that is currently underway, usually in the construction or development phase.
Properties like villas for sale in Istanbul, Apartments for sale in Turkey are sold by developers before they are finished. Buyers commonly acquire them using payment plans that follow the construction progress or project completion schedule.
This choice is great for acquire Turkish citizenship and guarantees a new property with modern features and specifications.
Also known as a ready-to-move property.
It's a property that's built and ready for you to move in right away.
Buyers can inspect the ready property and verify its condition and specifications before making a purchase.
Ready properties are suitable for those who want to move into their new home without waiting for the construction to finish.
The following is a collection of exclusive ready-to-move properties. Click here to explore.
You can also delve deeper into the topic by clicking here.
Residential Real Estate Investment:
What is Residential Real Estate Investment?
Investing in homes worldwide is a wise decision. It is easy to purchase and can generate annual profits. Additionally, it can be easily liquidated for cash. Examples include investing in residential apartments, entire floors, villas, and more.
How to choose the right property in Turkey?
Residential properties are generally assessed considering factors like:
- Location of the property, its accessibility, and proximity to public amenities.
- Building age and the durability of construction materials used.
- Property price compared to other properties (after evaluation by external accredited or governmental agencies). We will discuss property evaluation in a future topic.
Investment Methods and Expected Returns (R.O.I)
Long-Term Annual Rent:
Using certified lease agreements, properties are advertised on the internet and displayed by local real estate agencies. Then, an official lease contract is signed and registered with a notary public.
On average, lease contracts yield about 8% returns. Rent increases happen each year, typically ranging from 25% to 60% of the current rent, adjusted according to government-issued statistics.
Monthly Tourist Rentals or Hotel Apartments:
Property owners furnish the residence and list it on platforms like Airbnb.com or with property management companies. Occupancy rates for such rentals typically range between 10% and 15%.
Short-term rentals typically earn about 8% on average, but this can go up to 15% depending on where the property is, the time of year, and its features.
You can use sites such as Airbnb in Istanbul to get best monthly rental rates
Did you know: The number of foreign visitors reached 50 million by 2023. This growth presents a significant opportunity for investors to achieve high returns through tourist rentals.
Resale Apartment or Villa:
Resale is one of the most popular investment strategies in the real estate market. The previous statement illustrates the investment returns over the years in Turkey. Profit and returns on real estate investments.
Commercial Real Estate Investment:
Commercial real estate investment can be highly profitable and long-term if the location is strategic and the space is suitable. Examples include purchasing offices, retail shops, industrial properties, warehouses, and more.
How to Invest in Commercial Real Estate in Turkey?
Investment in Lands:
This involves purchasing land, developing it, and then reselling it. It is one of the most lucrative and powerful investment types, with profits reaching around 300%. See the link for land options for sale here.
Most Important Cities for Real Estate Investment in Turkey
Turkey is a top choice for living and investing in all its regions. Yet, It's suggested to concentrate on particular areas with better potential for higher financial gains. These areas include:
Istanbul is the top destination for investment. Istanbul has attracted 40% of real estate investment because to its high returns and appeal to global tourists and trade. Click here for properties in Istanbul.
Ankara holds the second position, being the Turkish capital, with excellent services and transportation infrastructure. Additionally, it is one of the key industrial areas. Click here for properties in Ankara.
Ranking third, Antalya boasts enchanting natural beauty, stunning beaches, and essential tourism facilities, making it one of Turkey's primary tourist destinations. Click here for properties in Antalya.
Trabzon is a favorite destination for Arabs, especially from the Gulf countries like Saudi Arabia and others. It features breathtaking natural landscapes and a cool climate for most months of the year, earning it the fourth spot. Click here for properties in Trabzon.
Most Important Areas in Istanbul for Real Estate Investment
Because of its geographical and investment importance, we've dedicated a whole section to key investment areas in Istanbul. We will be creating a future article that explains each area in detail. Stay tuned!
A top investment area due to its nearness to a large man-made lake, many parks, modern public transport, and major contemporary projects.
Known for being a hub for Arab elites, in addition to numerous modern commercial projects and an exceptional transportation network. It's also close to the largest government hospital and features modern urban planning.
One of the most upscale neighborhoods in Istanbul, also known as the area of global elites. It attracts major international companies like Google, Meta, and Amazon. The area includes various modern-style villas and buildings.
A highly important tourist area in Istanbul with a diverse population, including Arabs, Greeks, Russians, and other foreign nationalities. It beautifully combines the historic and modern aspects of the city.
A preferred area for Arabs on the Asian side, featuring numerous schools, public facilities, and upscale malls.
A favorite among investors because to its modern architecture and attractive property prices. Populated by students and featuring a strong transport system.
There are more fantastic investment areas in Istanbul, and we have covered the best ones. For more information about Istanbul, you can read the following article by clicking here.
Successful Real Estate Investment Strategy
Successful real estate investment requires careful planning, thorough analysis of opportunities, and effective strategies. Here are some steps and tips to achieve successful real estate investment:
- Precise Goal Setting: Define the purpose of your real estate investment. Do you want to rent the property for regular monthly income, or plan to sell it once its value rises?
- Expected Returns: Calculate the expected returns from your investment after factoring in necessary expenses like taxes, maintenance, and management.
and we did cover all these topics before in Profits and ROI
- Choosing the Right Property: Look for properties that align with your investment plan. Check the property's condition, construction quality, and location.
- Skillful Negotiation: Negotiate effectively with the seller to get the best price and flexible terms.
- Property Management: Plan how you'll manage the property after buying, whether by yourself or through a management company.
- Consult Experts: Seek advice and guidance from real estate consultants and local experts for important insights. Get in touch with us for the best tips on buying your property.
- Diversification: It's advisable to diversify your property portfolio to reduce risks and increase opportunities.
How Damas Group Real Estate Can Help You Obtain a Profitable Investment Property
Damas Group Real Estate has a skilled team that follows high quality standards to help you find a profitable investment property. We assist you through the steps of purchase, ownership transfer procedures, and obtaining property deeds safely and conveniently.
With Damas Group Real Estate:
1. Our specialized team will select the best properties for you.
2. We provide you with a comprehensive view of the property and secure actual viewing appointments.
3. We make sure all the needed papers and agreements between the buyer, seller, or developer are in place for property transfer and purchase.
4. Connect with a customer service representative today for a smooth experience.
Damas Group Real Estate is dedicated to providing high-return investment properties and ensuring a secure and successful transaction process.
Yes, it is profitable, and the annual sales profit margin is approximately 22%. We discussed this topic in the third section of this article. See Article 3:
The real estate market in Turkey is vibrant and continuously growing. Turkey is actively expanding its relationships, which helps boost demand for Turkish products in general. Additionally, the demand for rental properties is increasing daily, leading to a significant increase in prices.
You can start by studying the real estate market and various types of investments. Please refer to section number 10 for information on the differences between under-construction and ready properties. You can also search for available properties on our website. At Damas Group Real Estate, we can provide you with the best options and comprehensive explanations about real estate investment. Feel free to contact us anytime.
Yes, it is considered safe. For more information, please refer to section 5:
We have various and numerous options for land in Turkey, especially in the city of Istanbul. You can visit our website to see more properties, and you can also contact us for the best exclusive deals.
There are many projects that can help you invest with monthly installments. Enter the link to see some of these projects.
Of course, real estate investment provides a definite opportunity to obtain Turkish citizenship.
According to the Knight Frank Global Index, Turkey is considered one of the world's largest real estate price growth markets. According to Ernst & Young, Turkey ranked second in the most attractive markets. Several other indicators have also nominated Turkish real estate markets for delivering the best performances in the coming years.