Rental Property Market in Turkey: Opportunity and Challenges

Istanbul’s location on two continents reflects its rich cultures, trade, and history. Its prime location and rich history have attracted both domestic and foreign investors looking for opportunities in the real estate market. As a result, Istanbul has a great investment opportunity. In this essay, we’ll use data to gain insight into the future of the Istanbul real estate market.

Rising Residential Costs in Istanbul

The cost of Istanbul real estate is becoming a problem, particularly for students and first-time real estate buyers. Housing costs have risen. A result of the supply of dwellings falling short of the rising demand in several ways. 

The Central Bank of the Republic of Turkey estimates that between 2010 and 2020, residential real estate costs in Istanbul increased by an average of 11%. As a result, given the rising cost of real estate, thinking about investing in real estate early is a wise decision.

Investment Opportunity in Commercial Real Estate

Along with its residential real estate market, Istanbul’s commercial real estate market has experienced substantial growth. The city’s ideal location as a crossing point between Europe and Asia has attracted international organizations and businesses eager to invest and increase their presence in the area. For this reason, businesses are in search of commercial real estate in Istanbul. As Istanbul turns into a hub of trade and commerce, demand for office space and commercial retail is expected to rise.

Foreign direct investment (FDI) has been gradually rising in Turkey. According to data from the Central Bank of the Republic of Turkey. By 2020, Turkey had brought in about $22.1 billion more FDI than it had in 2010, which was about $9.1 billion.

Istanbul’s Transportation Evolution

Istanbul’s transportation system is one of the major elements affecting real estate values. The city’s public transportation system has received significant government funding improvements around its real estate projects, including the building of additional metro lines, bridges, and tunnels. As a result, this significantly increased the value of Istanbul’s real estate market.

One undertaking is Istanbul’s newest airport, which debuted in 2018. The operator of Istanbul Airport estimates that if it achieves capacity, the airport will contribute roughly 4.9% of Turkey’s GDP. Increasing the value of real estate properties as a result.

Istanbul’s Tourism Potential

Besides real estate projects, Istanbul is a well-liked tourist destination because of its rich cultural history. Additionally, it has historical sites and an energetic atmosphere. The city’s short-term rental sector has been significantly impacted by the rising number of tourists visiting and renting properties. Housing platforms like Airbnb have grown in popularity among tourists looking for distinctive and regional living options. As a result, short-term rental real estate in Istanbul is worth noting

Istanbul was one of the top 10 most often booked cities worldwide in 2020. According to Airbnb data, with more than 3 million visitors. A fantastic chance to profit from the tourism industry and provide enticing rental returns is provided by the expanding trend in short-term rentals.

Turkey’s Mortgage Program

Through different incentives and enticing mortgage terms, the Turkish government has been actively pushing real estate sales. The government unveiled the “Mortgage for Everyone” program in 2012 to make financing for homes more widely available. The program made it simpler for individuals and families to invest in Istanbul and purchase real estate by providing cheaper property interest rates and longer payback terms.

The number of housing loans in Turkey surged from around 935,000 in 2010 to about 2.6 million in 2020, according to data from the Turkish Statistical Institute (TurkStat), demonstrating the success of these programs in promoting the real estate market and igniting the real estate market.

Investment Opportunity

Istanbul’s real estate market offers promising investment opportunities driven by its strategic location, commercial growth, and thriving tourism sector. However, challenges such as rising residential costs and geopolitical unrest should be carefully navigated. As investors look to capitalize on the city’s potential, informed decision-making will be crucial in shaping the future of Istanbul’s real estate landscape.