Since late 2021 and until this moment, we have noticed that real estate prices in Istanbul have risen dramatically and rapidly, as the prices of some real estate projects have reached 35% on the basis of the dollar during the last two months only!

Even the prices of rents increased in Istanbul during 2021 by 84%. This means that the house that was rented at 5,000 TL is now being rented with more than 9,000 TL when it is offered for rent in the market.

What are the reasons for the significant increase in real estate prices in Istanbul?

Are these reasons real or artificial?

Is this increase temporary or permanent?

Finally, we will answer the question: What is the ideal time to buy a property in Istanbul?

What are the reasons for the significant increase in real estate prices in Istanbul?

  • The rapid development that this city is witnessing in all aspects, whether its economic, political and strategic importance in the region, or the high demand for its real estate,

If we compare the price per square meter in the center of Istanbul with a group of European capitals, we will find that the prices in the center of Istanbul do not exceed a third of the price per square meter in the middle European countries and do not exceed 15% compared to the prices per square meter for real estate in the center of developed European capitals such as London and Paris.

It is natural over time that the meter prices in the center of Istanbul approach the prices per square meter in the middle European countries and then the developed countries.

The same thing applies to the suburbs of Istanbul compared to the suburbs of European countries.

  • The cost of construction, which rose a lot during 2021, we realize that Turkey is an importer of most of the materials used in construction, such as steel, iron, and even some types of cement, and thus the decline of the Turkish lira against the US dollar significantly during 2021 led to a very rapid increase in the cost of construction, even ready-made properties rose Its price is because the developer who sells it will later create new projects at high costs.

The exchange rate of the Turkish lira against the US dollar opened in 2021 with a value of:

1 US dollar = 7.42 Turkish lira

While the exchange rate concluded at the end of the same year at the value of:

1 US dollar = 13.32 Turkish liras (with a historic peak on December 20 of 16.67 Turkish liras per US dollar)

An increase of 79% if we calculate the closing price of the year, but if we calculate for the greatest peak, the percentage will be 124% (because the developer will calculate the construction costs, taking into account that this maximum peak will be reached by the exchange rate again)

In fact, real estate prices during 2021 did not rise by 80%, and this is if anything indicates that the real estate developer dispensed with a portion of his profits in order to avoid a complete stagnation in the real estate market.

At this point, an answer to most of the customers’ questions in which they say that when visiting Istanbul from 6 months ago, the prices were lower and this is true, and the increase during 6 months sometimes amounted to 50% on real estate prices if they were evaluated in dollars.

  • Lack of new land suitable for construction

Some may think that this point is inaccurate because Istanbul is a very large city and therefore the abundance of land in it is an easy matter. In fact, abundant lands exist, but land suitable for construction in locations suitable for clients wishing to own a property for the purpose of housing or investment is not widely available and this is the influential point.

Today, the price of a room and a hall in the center of Istanbul with a view of the Bosphorus is about 600 thousand dollars, while at the same price it is possible to buy an independent villa in an area in Istanbul that is only one hour away from the center. We mentioned it, for example, at a price of 600,000 dollars, which is now being sold for a million dollars or more.

  • Shortage of new properties on the market

It is known that when there is a shortage of supply and a rise in demand, prices rise, and we must not forget that the Turkish real estate market is a local market, which means that Turkish investors are the ones who do most of the real estate purchases, and therefore, in combination with the previous reasons, there is a shortage of new real estate and therefore their prices have risen.

  • The Law on Exceptional Turkish Citizenship is still in force

The Turkish government has provided foreign investors with the opportunity to obtain Turkish citizenship when buying real estate worth 250 thousand dollars, provided that it is kept for a period of 3 years before it can be resold later. This law began in September 2018 and is still valid until 2022.

This means an increase in the demand for new real estate (because most of the resale properties are not suitable for Turkish citizenship).

The large number of rumors that this law is about to stop makes daily hundreds of investors interested in Turkish citizenship to buy new real estate for themselves and their relatives and families.

  • Exaggerated marketing by many real estate brokerages

Most of the real estate marketing companies in Istanbul are less than 3 years old, and therefore the level of experience will be modest. This means that these companies will market the apparent projects that market themselves strongly. As for the many projects available in the market, which may be more suitable for the client’s request, they are only known projects. By consultants with long experience, they have witnessed the development of the regions and not only the emergence of new projects in them.

Therefore, we always advise the client not to choose his properties himself, because he may fall victim to a skilled sales representative in a project with prices higher than the real market price.

He must also rely on a consultant who is able to provide him with detailed and accurate information about the appropriate area before talking about the project and the property itself.

In fact, there are many reasons that lead to a rise in real estate prices, for example, an 84% increase in rent prices during 2021, and therefore more investors will go to buy real estate with the aim of renting it and benefiting from the rapid rise in prices.

        To find out more reasons, contact us, and now we will move on to the next question:

Are the reasons for the rise in real estate prices in Istanbul real or artificial?

The Turkish real estate market in general and in Istanbul in particular is a large and local market that cannot be manipulated through some projects that offer exaggerated prices or some inexperienced brokerage companies that are interested in achieving the highest profit at the expense of the client without making sure to submit his request correctly.

Yes, we found a few cases of projects offering high prices to the foreign investor, and we found a large number of brokerage companies marketing these projects. Therefore, we always warn of the importance of consulting an old consultant in the market who has extensive knowledge.

Is the increase in real estate prices in Istanbul temporary or permanent?

Through the reasons that we talked about in detail above, it becomes clear to us that this increase is permanent because these reasons can decrease in intensity but cannot go backwards (the development of Istanbul / exchange rate / lack of land)

We have advised in previous articles that the ideal time to invest is now (at the time you are reading this article no matter what)

What is the ideal time to buy a property in Istanbul?

Because the reasons for the rise in prices are constant and increasing, not decreasing, as we explained, we can say that the ideal time to buy a property is now, and this statement will always remain true as long as Istanbul is in the process of prosperity and progress and as long as there is a global demand for real estate investment in it.