Investing in Istanbul

Real estate prices are going down in Istanbul

Last edited:Aug 25, 2023
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Real estate prices are going down in Istanbul
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This Title is been awaited by thousands of investors who are interested in owning a property in a promising market like Istanbul and at the same time want to double their profits by buying real estate at a lower price than usual.

 

Today we will talk about the types of real estate whose prices have decreased and explain the reasons behind this with some live examples, and we will also mention our expectations regarding the direction of prices in the future.

First of all, in any large market that is not governed by limited sellers and buyers, it is subject to the theory of supply and demand, which states that when the demand for any commodity increases and the supply decreases, its price increases due to its scarcity, and vice versa. and diversify competitors.

 

We discussed the reasons for the rise in real estate prices in Istanbul previously, and then we clarified the real reasons for the rise in prices, such as the high cost of construction materials, an increase in shipping costs, supply chain problems, and also the continued decline of the Turkish lira against the dollar.

 

But apart from these real reasons, there are additional reasons that led to an exaggerated increase in prices in some projects in certain areas of Istanbul, in the hope of real estate developers to obtain additional profits, but with the passage of time and weak demand, especially for this type of real estate, the prices of which we see today are returning to normal prices. As before .

 

Important notes before talking about these projects:

  • The increase in the minimum amount for obtaining Turkish citizenship from $250,000 to $400,000 led some real estate developers to think that this is an appropriate opportunity to sell the property whose value was $350,000, at a price of $400.000 or $420,000 to become suitable for Turkish citizenship.

 

  • The presence of inexperienced real estate brokerage companies in the market and the trust of some new investors in them has led investors to these projects and thus buying real estate at a price higher than its logical price by 20% and sometimes as 30%, and here the blame lies with the investor who does not study the real estate market and its investment options properly before To choose the agent he deals with, instead he communicates with dozens of agents  randomly, thinking that this is the best way to get the best opportunity!
    The real estate investor must understand the investment in Istanbul correctly, and we here at Right Home help you with this through our blogs on real estate investment in Istanbul.

 

  • The lack of knowledge among the old investors led them to offer their real estate for resale at low prices because of their first choice of non-investment real estate at the beginning when buying it, and also their choice of wrong timing in selling the real estate, and thus the absence of demand made them believe that the problem was in the asking price, and therefore they reduced the price several times so that the property would eventually be bought by an expert investor. Less than its real price, sometimes by 50%, just to wait for the market to stabilize so that it can collect a profit of 50%, even without renting the property, only by reselling it later at its correct price.

    The property with two rooms and a hall, its normal price, for example, in Beylikduzu, is 250 thousand dollars within a residential complex that is less than 10 years old. Today, due to weak demand, the owner (instead of postponing the idea of selling because the market is now suitable for buying only and without an urgent need) reducing the price To 200,000 dollars, and when he is unable to sell the property, he lowers the price again to 150,000 dollars, and after he sells, he checks the market to find that the amount he got is not suitable for buying a better property as he thought, then he invests this money in a field other than real estate, and so he loses The most solid and grateful investment sector for him!.

 

  • The price drop started from the beginning of the current year 2023 for these types of projects. However, we did not talk about this issue until August, because this drop is temporary and constitutes a very important opportunity at this time, and it is possible that the low prices will continue to exist for a longer period or the prices will drop more, but It is also possible for this opportunity to expire at any time and the demand to rise again.

 

  • There are many regions in Istanbul, no matter how circumstances change, where demand remains high and supply is low, such as neighborhoods in the central regions (not the region as a whole), and therefore their prices did not and will not form a real estate bubble and will never decrease, no matter how long the difficult economic conditions extend, and therefore it cannot be believed when hearing that real estate prices are declining All real estate prices decrease in the same proportions. This is not true.

 

Now we will talk about the specifications of the projects whose prices fell during this period after the price bubble burst

1-Supply is high and demand is low

Yes, demand has decreased due to inflation problems and high interest rates, as real estate loans, even to the local population, are not as attractive as they were before, and this, in fact, happened in all countries of the world, not only in Turkey.

But the important question is what about the show? Are there a lot of real estate offered in the market similar to the real estate you want to buy or sell?

Competing real estate is not the real estate in the same residential complex as you, but in the whole area that offers the same advantages as your real estate. Here, you should pay attention to two points:

- If you own a property and want to sell it, make sure that this time is not suitable if your property is in areas with many projects such as Basaksehir, Basin Express, or some areas of Bahcesehir, Beylikduzu and Esenyurt, and if you wait for the market boom period again, you will certainly be able to collect a higher price at least 30%

- If you want to buy a resale property in an area with high competition, it must be at least 30% cheaper than the price of new real estate in similar projects, because you are now buying at a suitable time, and also because you bear the risk of owning an unwanted property.

 

2-A big difference between the meter price of the new property and the relatively old one

It is known that the most famous type of real estate investment is made in Istanbul by buying a property under construction and reselling it later upon delivery with a profit of up to 25% annually if the property is chosen correctly.

But what if you find that the property under construction has a higher price per square meter than the ready property (with the same specifications, services, and level)? This is what we found clear in many projects within the areas that we mentioned above. Thus, there is a very large pressure to sell ready-to move real estate, which makes the price of the new real estate under construction unattractive to the investor.

But what about the central areas such as the neighborhoods of Sisli, Nisantasi and Bomonti and the real estate near the highway and the Seyrantepe near the vadi Istanbul Mall and Beyoglu near Taksim Square? Certainly, these are central areas where demand is always high, and therefore you cannot find this imbalance in them. And if you want to own a property in it, there is no need to wait because waiting for the best opportunity is wasting today's opportunity, which is undoubtedly the best tomorrow.


3-Gift wrapped offers

During your search for real estate suitable for nationality, you must have received one of the following offers:

-Buy 3 properties at a price of 400,000 US dollars, suitable for nationality.

Very few times, this offer is not fake, but when you ask a professional real estate consultant and he tells you that the real price of these apartments was 300,000 dollars before raising the limit of Turkish nationality to 400,000 dollars, then you are sure that this is a cover for a fake gift.

-Obtain Turkish citizenship immediately with a down payment of $100,000 only.
It is possible to buy a property in installments to obtain Turkish citizenship, but it is never possible to start applying for Turkish citizenship before completing the payment of an amount of no less than 420 thousand dollars (a safety margin of at least 5%).

-A property priced at $220,000 is suitable for obtaining Turkish citizenship alone!
This is also a trick because both the real estate appraisal and the transfer receipts are required to apply for Turkish citizenship, and it is not done before any evaluation or receipts of less than $400,000.


- Guaranteed rental returns for 3 years at a value of 8% in non-hotel projects.
It is an increase in the price of the property by 24% and its distribution as profits to the investor in the first 3 years, after which the real return of the property can be less than 4% annually!

And many other daily tricks that we see.


4-Projects for non-professional developers

There is no problem with a new real estate developer in the Turkish market, because everyone one day started from scratch, but the big problem is when a developer is dishonest, his principles change if they conflict with his interests, sometimes there is an independent developer who builds one building in an area, whether it is central or remote On the center and when time passes and due to economic difficulties that buyers face, and this is normal according to the market economy cycle, this developer reduces its prices significantly to attract customers interested in buying his real estate, and after the sale is completed, he completes the project randomly using cheap materials to compensate for the profits he lost during the price reduction.

Here we mention this point to alert the investor that the history of the real estate developer is very important to take into consideration when buying a property, especially in times of high inflation or recession.


5-Projects that lose their luster

The follower of the real estate market in Istanbul since 2017 is fully aware that the first feature on which the projects of the Basin Express area are promoted is that it is close to Ataturk Airport (currently closed after the opening of the new Istanbul Airport in the north)

This same point must be kept by the real estate investor in his eyes when searching for his next investment property and to check these advantages of the project, whether they are continuous or fleeting with time.

With this view, the investor can discover and evaluate new offers in the event that there are promising projects that will be implemented for sure during the investment cycle he is considering.


For example, the Istanbul Canal project, which has been discussed since the 16th century until now, has not actually started. It is illogical to buy real estate or land close to the canal in order to benefit from the canal project during the next five years (knowing that the canal project, if started, needs 10 years to be completed). implement it)

Also, the investor who buys agricultural land for the purpose of organizing its housing, whether it is near the Istanbul Canal or in any other area, must be fully aware that investing in agricultural lands is a long-term investment whose results cannot be harvested before 15 to 20 years, and sometimes more.

To see live examples from the reality of the market, we advise you to contact our professional team and obtain a free consultation, because these offers change on a daily basis, and it will not be accurate to write them in an article that will always remain.

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