The future of real estate investment in Istanbul and 2023 vision
Return on investment (ROI) is the percentage that attracts the attention of an investor in any field, the greater the ROI means more investors been directed to the source of this high return.
Also, the area of investment and the country in which the investment will take place is very important. We must not neglect the time frame of the investment process, all of which are factors that greatly influence the success of the investment process.
When we talk about a country like Turkey whose economy ranks 18th globally and has future plans to become one of the ten biggest economies in the world by 2023, the investor feels that this country is an appropriate environment to make an investment in it.
The real estate field in Turkey is one of the three best sectors that the Turkish economy depends on to achieve its upward growth. The Turkish real estate market is very huge and the options in it are varied and it serves the local market in addition to a decent percentage of foreigners from different countries of the world.
One of the most important amendments to the citizenship law that has succeeded in attracting thousands of investors from all over the world who want to obtain Turkish citizenship and achieve a significant investment return is one of the facilities provided by the Turkish government in order to obtain Turkish citizenship by buying a property or a group of properties and keeping them for 3 years at least.
The time frame of the investment process in Turkey is the first influencing factor in choosing the location and the type of real estate. Investors who are seeking to obtain Turkish citizenship and discontinue their investment after 3 years must choose a real estate location that can be easily sold after this period has done and the required profits are collected.
As for those seeking to make a long-term investment, here we are talking about a different type of real estate through which investment will take place, in both cases the location of the real estate is the starting compass for a journey of owning real estate in Turkey and from here we proceed to the following question:
What is the best area for real estate investment in Istanbul, Turkey?
Istanbul is characterized by its central strategic location as it connects both the Asian and European continents through three bridges passing over the enchanting Bosphorus Strait. In addition to that, it is a golden plot of land bordered on the north by the Black Sea and on the south by the Sea of Marmara.
Istanbul includes 3 airports, including the largest in the world with a runway capable of accommodating 120 flights every hour, and with expansion plans to be able to serve 200 million passengers annually upon the completion of its four stages.
Indeed, from the first moments of the project's announcement in 2013, many countries in the Middle East and the European Union began to view the new Istanbul airport as a threat to their local economies; Because the airport's operational plans indicate that it will acquire the movement of passengers at regional and international airports, including Dubai Airport in the Middle East, Frankfurt in Germany, and Heathrow Airport in the UK, as well as Paris Airport, due to its strategic location that connects the eastern hemisphere to the west and north to its south, and from Scheduled to control air traffic on the three continents of the world; Asia, Africa, and Europe.
Turkey's vision for 2023 summarizes the following:
- That the Turkish economy becomes one of the top 10 economies in the world.
- The unemployment rate should not exceed 5%.
- $ 1 trillion in foreign trade.
- The total salary should reach 25,000 USD.
- Export value of 500 billion USD annually.
- $ 2 trillion of GDP.
- Additional income by applying fees for the passage of ships from the Bosphorus and Dardanelles.
The importance of all of the above is to clarify the eligibility of Turkey in general and Istanbul, in particular, to be a promising investment environment within a country whose economy has high growth rates.
Now we will clarify the regions of Istanbul through some helpful maps to discover these areas mainly. In the following paragraphs we will explain in detail:
First Sector: It is represented by the red circles in the large green circle below
This sector includes the following:
+ Upscale modern and lively area.
+ It boasts views of the forests of Belgrade and the Bosphorus.
+ With growth rates in real estate prices constantly.
+ Suitable for budgets starting from $ 150,000.
+ Upscale, fully developed area.
+ Centrally located, suitable for large corporate centers.
+ With a very limited number of new projects.
+ Suitable for budgets over $ 200,000.
+ An archaeological site with a central location.
+ It includes Taksim Square, which is well known.
+ Includes dozens of luxury hotels.
+ Suitable for budgets starting from $ 250,000.
The coastline of Zeytinburnu and Bakirkoy areas
+ It includes spacious apartments 0 meters from the sea
+ Charming views of the Sea of Marmara
+ Upscale and modern buildings
+ Suitable for budgets that start from $ 270,000.
The second sector: It includes the following:
+ A modern area following the city center and close to Istanbul Airport.
+ Their homes are dominated by family-style.
+ has a conservative environment.
+ Suitable for budgets starting from $ 100,000.
Basin Express road
It is the street between the highways E5 and the international road TEM, it has become famous in recent years and includes many housing projects, offices and dozens of international and local hotels, and it is characterized by the following:
+ An emerging area connects between major highways.
+ It includes a lot of ready and under-construction projects.
+ It includes many hotels and is classified as a meeting place for businessmen.
+ Suitable for budgets that start from $ 75,000 dollars.
The third sector: which represents the distant suburbs of Istanbul that includes several areas shown on the map below:
+ Coastal area between Kucukcekmece Lake and the Marmara Sea.
+ It includes several public and private universities.
+ It is divided into two sides by the E5 road which includes the most important means of transportation in Istanbul, the Metrobus.
+ Suitable for budgets starting from $ 70,000.
+ An area of calm and abundant green spaces, which makes it one of the most important summer holiday homes and vacation areas in Istanbul.
+ An area with a sophisticated and modern urban design.
+ Close to both Başakşehir and the road to Istanbul's new airport
+ Suitable for budgets starting from $ 70,000.
+ Quiet area at the same time close to E5 highway and important transportation.
+ It is bordered on the south by the Sea of Marmara, leaving extremely beautiful sea views, especially at the marina.
+ An integrated services area in which educational and governmental centers and everything necessary.
+ Suitable for budgets that start from $ 75,000.
+ A lively area, markets, and high population density.
+ It includes large housing complexes with a number of housing units that may reach more than 5000 in one complex.
+ It is distinguished by its lowest prices on the Istanbul level.
+ Suitable for budgets starting from $ 30,000.
+ It is the farthest from the center of Istanbul and is blessed with calm and fresh air.
+ It is bordered on the south by the Sea of Marmara and includes projects with direct sea views, extremely impressive at affordable prices.
+ It is dominated by the nature of vacation homes and villas.
+ Suitable for budgets starting from $ 80.000.
After defining mainly areas in Istanbul, we will move on to answer the following detailed questions:
Where to invest in Istanbul?
The question of where to invest in Istanbul is completely different from the question of where to buy a property in Istanbul, we note from some customer inquiries that the difference between investing and buying any property is not clear, so if the question is where to buy a property in Istanbul, we can say that each of the areas we mentioned above has certain advantages, especially in terms of proximity or distance from the city center, transportation, views and prices, this question cannot be answered without knowing the exact details of the customer's request.
As for the question of where to invest in Istanbul, the answer is, the closer we are to the center of Istanbul in the first sector that we defined above, the more meaningful this investment will be due to the following basic issues:
+ The investment is subject to a specific time, and the closer we get to the Istanbul center, the easier it will be to finish the investment and sell the property again with additional profits
+ New projects in the center of Istanbul are limited, and thus the demand for them is great now and in the future, so when sold again, the profit rate will be high.
+ The rental yield for real estate in the center of Istanbul is higher than the rental yield for real estate that is far from the center.
+ If the project is under construction, this is also more profitable for short-term investment.
+ Istanbul's central regions never lose their value, the more urban expansion spreads across Istanbul east and west, the more important the central regions increase and the higher their investment values.
many other detailed reasons for preferring the center of Istanbul to investors, you can get to know them fully by contacting our advisory team.
Why to invest in Istanbul?
To realize the benefits of investing in Istanbul, we must compare it with the rest of the cities in terms of return on investment and taxes.
Calculating the ROI in Istanbul:
Many customers make the mistake of calculating the correct return on investment by calculating the annual income of the property and neglecting capital appreciation or retreating it when selling. To illustrate this, we will know the return on real estate investment in Istanbul and then give an example:
Return on investment = annual rental return + capital appreciation upon sale
The mistake made by many customers who want to invest in non-investment areas such as Esenyurt, for example, they focus on the annual rental income from the above equation without paying attention to capital appreciation or retreating when selling.
Many promotional offers in the market promise customers with a rental guarantee that sometimes reaches 10% annually for a period of two years or 8% annually for a period of three years, and so the investor thinks that after 3 years he will collect 24% of his capital and this is true, but when reselling the property he may not be able to Whoever sells it at a higher price than what he bought, on the contrary, the value of his real estate is less than what he bought and this makes real estate investment a loser, we will give an example in numbers:
If one of the clients bought a real estate with a value of 100 thousand dollars with an 8% rental return for a period of 3 years, and after this time the investor wanted to finish his investment and sell his real estate after obtaining the Turkish citizenship, he finds that the value of his real estate in the market is equivalent to 70 thousand dollars, thus:
Profit amount = 8% x 3 years - the property's capital decline rate
Profit = (3 X $ 8,000 - $ 30,000) = (-6,000 $)
ROI = ((94,000 $ -100,000 $) / 100,000 $) X100 = -6%
Through this example, it becomes clear to us that although there is a high rental yield, the investment was lost.
However, when choosing a correct investment location, the formula is as follows:
If one of the clients bought a property worth 300 thousand dollars in the center of Istanbul and thus the return yield without a rental guarantee will not be less than 5% annually and after three years if the investor wants to re-sell the property then he will achieve the property due to his location profits on the capital not less than 15 % During this period and thus the formula becomes:
Profit amount = 5% x 3 years + real estate capital influx
Profit = (3 X 15,000 $ + 45,000 $) = (+ $ 90,000)
ROI = ((390,000 $ -300,000 $) / 300,000 $) X 100 = 30%
We have another exclusive formula with a return of more than 45% within three years for Right Home customers. If you would like to view it, write your information to contact you.
As for real estate taxes in Istanbul, they are without the least competitor compared to European competing countries such as France, Italy, Germany, and the UK, in Istanbul, there is no tax on the capital gain when selling and there is no tax on the net real estate value as in Spain, Italy, and France, also VAT is less than The rest of Europe is non-existent in Turkey sometimes.
When to invest in Istanbul?
Now, yes now because the real estate market in Istanbul is not a seasonal market but rather it is a vital market throughout the year, and we as specialists in the real estate market observe special offers throughout the year so we advise the following saying: "Do not wait to buy the property but rather buy a property and wait".
Especially at the present time during the Corona Covid-19 pandemic and the development of the possibility of purchasing property online through the Internet, the benefit has become doubled because real estate developers have plans to achieve sales ratios that they must adhere to, so today we find more discounts than ever before and this will not last for a long time Certainly, once the Covid-19 crisis ends in the world, discounts on real estate prices will shrink, in any case, and even when the Covid-19 crisis ends, as we said at the beginning, the Turkish real estate market is not a seasonal market and therefore there are distinct offers throughout the year.
What to invest in Istanbul?
Real estate investment in Istanbul is one of the most successful types of investment in general, because of the ease of achieving high profits in a relatively short period of time.
The facilities of the Turkish government for foreign investors and granting them Turkish citizenship in exchange for an investment of 250 thousand dollars have reinforced the previous words and further cemented the importance of the Turkish real estate market as one of the most important investment sectors for foreigners in Turkey.
And now in the Turkish real estate market, we have many options, including lands, villas, homes, and shops, so what should the foreign investor choose to achieve the largest possible gains.
As for agricultural lands, they need government licenses that are not easy to obtain from one side, and on the other hand, there is great competition in the field of agriculture and a percentage that is not few from the Turkish people and was allocated outside of Istanbul to cultivate agriculture and thus entry to the local market and competition is not guaranteed and therefore we advise investors often to avoid investment on farmland.
As for villas, homes, and shops, as we said in the past, the location is the most important pillar to be relied upon when investing, we should not forget that the exit plan is always from investment and that we are not deceived by immediate profits within two or three years, and after that, we get a losing investment as we explained in the equations above.
The breadth of the Turkish real estate market is an advantage and a double-edged sword, its advantages are that there are various opportunities throughout the year and several options that enable the investor to have what suits him in the best location, his drawbacks being a huge market that can be surrounded by all its secrets only experts specializing in this field for many years.
If you intend to invest, do not lose yourself the opportunity to obtain investment offers in the real estate field, you only need to contact us so that our advisory team provides the best offers in the real estate market in Turkey.