An ABC guide for Istanbul real estate virgins
The enormous, sprawling city of Istanbul holds a dizzying array of promise for real estate investors hoping to invest in Turkey's most exciting city. However, with so much choice, it's useful to know how to separate the wheat from the chaff when you're investing in Istanbul, Turkey, home to some of the most lucrative property investments on the globe - as well as a number of pitfalls of which would-be investors should be mindful.
Istanbul’s new airport is tipped to become the largest in the world, propelling Istanbul into a new future where its position between Asia and Europe becomes ever more pivotal. Developments near the Third Airport, the first phase of which will open before the end of 2018, have experienced a steady upward trajectory in price and interest.
Property investment near the airport appeals to investors for two reasons:
- Proximity: projects close to the airport will increase in value as the airport scales up, and also mean convenience for residents who travel for work and leisure.
- Transport: the infrastructure development surrounding the airport; the motorways and the public facilities, is top notch and still continuing, providing opportunities for residents living nearby to easily make their way around the city.
The areas that are most likely to be affected positively (and pretty rapidly) by the opening of the airport include:
Gokturk: This elite neighbourhood of Istanbul enjoys best of both worlds: proximity to the city centre (10 minutes from Maslak) while being surrounded by nature and forests. Golturk is also just a few kilometres from one of the major motorways channelling drivers to the new airport.
Therefore, already desirable Gokturk will become highlyaccessible, positioned halfway between the third airport and Maslak. The area appeals to city professionals, who enjoy the easy-going, trendy atmosphere of the town, with its many cafes and restaurants. We expect prices in Gokturk to appreciate steadily over the next two to three years. There is limited supply therefore Gokturk is likely to preserve its appeal as a high-end, modern town of Istanbul.
Arnavutkoy: On the western side of the airport highway, Arnavutkoy is a less developed town of Istanbul. Left unnoticed for many years due to difficulty of access from airports and city centre, the area is now firmly on the transport grid after major infrastructure development. There is plenty of scope for development in Arnavutkoy and prices are very affordable compared to Gokturk. We expect the area to see major developments in the coming years.
Basaksehir: Already one of Istanbul’s prime development areas, there are plenty of land plots available for development. Basaksehir is now on one of the prime connection routes to the new airport, also connected to the city centre via metro lines. Immediately on the outskirts of Istanbul, Basaksehir property is likely to develop into a major residential zone much the same as Beylikduzu and Esenyurt, however, better organised and with better infrastructure.
For investors we would like to add a word of caution. If you are looking for strong capital growth, Basaksehir may not deliver all that well in the short to medium term due to unlimited availability of building plots and liberal zoning regulations in the area, which will mean continuous supply of new developments making investors’ exit rather difficult. In short, this is an area that is easy to buy into, but not so easy to sell out.
Zekeriyakoy, elite villa region
Well-to-do Zekeriyakoy is the haven of Istanbul elites. With spacious developments set in woodland or in well-appointed suburbs, property in Zekeriyakoy tends to be luxurious and private. The appeal to the average buyer is a green, peaceful setting, but within easy reach of the city. Residents have easy access to the new Yavuz Sultan Selim Bridge, which means a trip of around 20 minutes into central Istanbul. The new airport is just a 15-minute drive away, adding further appeal to jet-setting executives. In addition, one of Istanbul’s finest international schools has its prime campus in Zekeriyakoy, British International School Istanbul
Since construction began on Yavuz Sultan Selim Bridge in 2013, land and burgeoning developments on either side of the Bosphorus, set to be connected by Istanbul’s third bridge, have attracted a great deal of interest. The main impact of the third bridge will be to extend the prime residential zones along the Bosporus, which are some of Istanbul’s most expensive and most desirable areas to live.
On the European side of Istanbul, the Bosporus Strait from Beyoglu to Sariyer is certainly the jewel of the city. As you drive beyond Sariyer, prices begin to drop, due to diminishing access. However, with the opening of the third bridge we are seeing an upward trend in construction activity and property prices in Sariyer area, in Tarabya and beyond, toward the bridge. In short: the bridge has extended the Bosporus zone beyond Sariyer.
You can see the same effect on Istanbul's Asian side. The bridge, in northern Istanbul by the Black Sea, not only helps the flow of traffic, but connects the city with the North Marmara motorway. Improved infrastructure always begets investment opportunities as the area’s appeal is boosted to buyers and renters looking for opportunities outside the expensive city centre. The Third Bridge is no exception.
Business District and Maslak on the European side
Mecidiyekoy, Sisli, Levent, Ulus and Etiler are some of Istanbul’s most desirable central business and residential districts. In particular Mecidiyekoy, Sisli and Levent have well developed business zones for banks, law firms, and international and regional headquarters.
Office spaces as well as luxury residences are always in demand, yet come with a major premium. Investors are advised to be very selective so as to maximise their profits when buying in this area. There is also urban regeneration going on in some parts of the area, enhancing the fortunes of the back streets of Levent and completely uplifting the profiles of areas such as Bomonti in Sisli that have been dormant for many years as investors concentrated on the most prosperous parts of the city.
There have been big gains for investors in formerly industrial areas like Bomonti. Rubbing up against neighbouring Sisli, Bomonti’s fortunes were bound to change. Maslak, close to Levent and Sisli yet bordering onto the Belgrade Forest to the west, is now a major business and residential district. Prices are slightly lower than Levent, Ulus and Etiler. However, as the area reshapes and improves, Maslak will see tremendous gains with its carefully designed infrastructure and modern, fashionable streets.
Old City and the Historic Peninsula
When many of us think of Istanbul, we think of the Old City: the minarets of the Blue Mosque, the city walls, the ordered chaos of the Grand Bazaar. This is the part of the city you’ll most likely see throngs of tourists exploring what is effectively an open air museum within the Byzantine city walls. Investing in the Old City of Istanbul is a different kettle of fish than the developments being constructed outside its walls. There are few new developments here: available property consists of Ottoman townhouses or historic hotel buildings. Due to its heritage, developing and modernising the Old City is not all that easy.
As such, the old City is not preferred living space for most Istanbul residents. Infrastructure is old and tired, and the old stigma of ‘inner city ghetto’ status still lingers on for many. In time, no doubt the old city will be regenerated to its former glory pre 20th century, however, this will take time and much collaboration between the private and public sector.
Golden Horn regeneration
The suburbs on the Golden Horn (Halic in Turkish) are prime regeneration areas, whose fortunes are set to rise rapidly and significantly. As one of the oldest settlements in Turkey, the Golden Horn has been occupied for thousands of years. However, for a long time this central part of the city was known for its low-quality housing and downtrodden streets.
Today, this is changing. Urban regeneration is transforming the area, with the municipality removing unsafe buildings and constructing new developments in their place. Improved infrastructure means the Golden Horn areas of Eyup, Bayrampasa and Gaziomanpasa are better connected to each other - and the rest of the city - than ever. Golden Horn property is highly sought after by renting professionals seeking property within commuting distance to the city. Return on investment is solid in this area, with a steady income stream for investors looking for steady capital gains. Properties tend to be well thought-out, large scale apartment blocks geared to families, with top-notch facilities.
Elite Asian Zone
It’s no longer the case that foreigners looking to invest in Istanbul property stick to the European side. The Anatolian, or Asian side of the city is developing quickly, with gentrification and regeneration turning once ignored areas into prosperous, well-connected hubs. This part of the Bosphorus coastline is particularly sought after, for its views of the Historic Pensinsula, Istanbul’s walled Old Town. Close to ferry and rail hub Haydarpasa, which acts as a launching off point for exploring just about every part of the city, this corner of Anatolian Istanbul is becoming sought after by investors for its quality builds and rental opportunities.
Ask any deep-rooted Istanbullite where they would love to live in Istanbul and the answer will most often be Fenerbahce, Moda or Bagdat Avenue, Anatolian Istanbul districts close to Kadikoy, the Asian side's main hub. This part of Istanbul is less chaotic, less polluted and arguably prettier than the European side.
A word of warning: top districts in this area are fairly expensive as they are extremely desirable. Do not come here looking for deals on luxury homes with Bosphorus views; you won’t get them. Prices are resiliently high in these elite areas.
However, there's still good news. The coastal road from Kadikoy all the way to Kartal and beyond is now completely regenerated and strikingly pretty with cafes, restaurants and seaside promenades. Investors can still find reasonably priced luxury homes in areas such as Kartal, just a few steps from the coastline.
Finance district and Atasehir
Not surprisingly, the development is causing a ripple effect through the wider Asian side of the city, including its residential and commercial property developments. The properties in the financial district are not only superb investment options, they’ll be highly sought after by the thousands of workers employed in the many institutions in the new centre.
Located in large, well-appointed developments, buyers can invest in one, two and three-bedroom homes with top facilities, within easy reach of the financial centre. Already well decorated Atasehir is likely to become one of Istanbul’s most sought after areas thanks to the new finance centre. Invest in Atasehir property for longevity and guaranteed returns.
Early migrants from Antatolia, who moved to the city during Istanbul’s population boom in the middle of last century, built shanty towns in this region of the city. The satellite towns, outside the historic peninsula and Istanbul’s main business district, were poorly constructed and unsafe, and deemed ghettos.
Today, however, with urban regeneration marching its way across the city, this central area, with its easy access to the central city, is quickly becoming prime real estate. Old buildings are are being razed in favour of well built, quality housing projects popular with a new boom of middle class, educated Turks moving to the city for work.
These projects are aimed at city workers with young families, who are looking for quality rentals with the good facilities upwardly mobile Turkish professionals now expect.
Elite coast region
Driving in from Ataturk Airport toward the city centre on the coastal route and bordered by the upwardly mobile Media Highway, this part of the coastline, once so popular with day-trippers from central Istanbul, has a new appeal among lovers of the marina lifestyle and luxury seaside homes. Developed as an elite area with an emphasis on marina facilities, this coastal part of the city appeals to elite buyers or foreign buyers looking for a seriously upmarket investment.
The appeal of this area is twofold. Not only is it a luxury development with marina access and top-notch facilities, it’s within easy reach of the city’s most significant areas: the central business district, the historic peninsula, Media Highway, and Ataturk Airport.
Atakoy’s marina is the area’s central hub. With facilities to accommodate mega yachts, and upmarket lifestyle trappings, it’s always been popular with holidaymakers. However, it’s now becoming a outer-city hub for wealthy executives. Luxury developments here have all the trappings you’d expect and a few that go above and beyond.
Thanks to a large government investment into the area’s property and infrastructure, Media Highway, or the Basin Ekspres, has become one of Istanbul’s pivotal areas for foreign direct investment in property. Its central location, developed amenities and excellent housing projects are attracting investors looking for mid-term investments with rental opportunities. The developments here are typically one and two-bedroom apartments, ideal for city commuters seeking high-quality rentals within easy reach of the city and the airport. Rental returns are higher in this part of the city than comparable areas. Recent figures show the average Media Highway rental return was 6.7%, well over the Istanbul average of around 5%.
Beylikduzu, Esenyurt and Bahcesehir
We have called this part of suburban Istanbul ‘where most foreigners buy’. These areas include Beylikduzu, Bahcesehir and Esenyurt.
Due to sheer scale of development and exceptionally favourable prices, this zone has attracted a tremendous amount of foreign investment. Similar to Basaksehir, these districts are very easy to buy and extremely difficult to exit due to heavy price competition from new builds and resales. Surplus supply means most of these districts are buyers' markets.
If you are considering an investment in Turkey, stay away from these districts for now, since no exit, means no return on your investment. However, if you are looking for a busy area, well connected to Istanbul centre, with more space and greenery around you, then there are beautiful apartments and houses to look at in Bahcesehir.
Beylikduzu offers modern facilities, busy streets and a good number of luxury homes that are well affordable.
Retirement villas and Lake Buyukcekmece
For those looking for family homes, villas with excellent facilities, the area in between the two lakes of Istanbul, Lake Buyukcekmece and Lake Kucukcekmece is an ideal destination.
In the past, some parts of the area have been restricted to low density and low height constructions, paving the way for villa developments. You'll find several such high-end luxury villas in Turkey's most upmarket complexes in this area, heading down to the sea of Marmara.
For lifestyle buyers, this area is a must. That is, if you have deep pockets, since these villas do not come cheap. However, a villa for $600,000 in this area would cost more than $4m along the Bosphorus, so there is still a major cost advantage.
Robust road connections and the third airport further increases the appeal of this area, which is now well connected to the city centre. The town of Buyukcekmece itself is a gorgeous historic town with plenty of attractions for the whole family to enjoy.
Contact us to discover how you can invest in Turkey's most exciting city.