The property market in Turkey is still buoyant; the truth is property prices continue to rise although at a slower rate than 2016. During the year to July 2017, Turkey’s nationwide house price index increased by 11.6%, according to figures released by the Central Bank of the Republic of Turkey (CBRT). When adjusted for inflation, house prices rose 1.65%, less than the 4.76% inflation adjusted year on year price rise during the same period last year.
In Istanbul which is Turkeys largest city house prices increased by 8.38% during the year to July 2017. The country’s capital Ankara saw a rise of house prices of 8.04% and in Izmir which is Turkeys third largest city house prices rocketed by 19.54%. Newly built properties in Izmir also had a surge in property price rises. According to CBRT, prices for newly-built houses in Izmir saw an annual increase of around 20.22%.
Property prices in Turkey have rose continuously, largely due to the rising middle class gaining access to mortgage finance for the first time, reports Kate Everett-Allen, Knight Frank’s head of International residential research.
In 2016 property price rises started to slow due to economic and political turmoil: terrorist attacks, political uncertainty among others. Istanbul’s prime market suffered badly that year. Despite the recent price slowdown, “In the long-term, Turkey is likely to remain on the radar of investors, given the underlying market fundamentals of strong demand set against low supply” according to Kate Everett-Allen.
Property purchases have continued to rise, with 17% and 25% year-on-year increases in September and October respectively. This has been largely fuelled by local demand, which is set to increase next year. Backed by President Erdogan, commercial banks have been offering cheaper loans, which have instigated local property demand. 2016 has seen a 71% increase in mortgaged house sales, accounting for a third of all sales of villas and apartments in Turkey, and this trend is likely to continue through 2017.
Foreign investors are still buying and the top foreign buyers are Saudi Arabians who topped the list for most foreign property sales and they bought the grand total of 528 properties in Turkey during the month of October in 2017. In second place were the Iraqis who bought 344 units, third are the Azerbaijanis bought a total of 278 properties, fourth saw the Kuwaitis investing in 154 units and in fifth place the Russians bought 125 Turkish homes during October, all the data has been supplied by (TÜİK).
Favourite is Istanbul; it is a hot spot for investment and continues to prove popular with 1,321 property sales to foreign buyers. In second place is Antalya with 465 units sold and in the northwestern province of Bursa 121 units was sold and Yalova had 108 sales. The Aegean province of Aydin saw 93 properties sold.
Good news for the local Turkish population is improving, with wages rising across the board and a minimum wage increase is likely for early in the year, which will increase consumer spending and property ownership.