If you've browsed the properties for sale in Istanbul on our site, you might have noticed something strange: there are a lot of lower priced properties on Istanbul's outskirts.
This seems unusual in a city where there is an insatiable demand for property. But there is a simple explanation, explains Property Turkey director Cameron Deggin.
"It's true," Deggin says. "On the outskirts of the city, property is priced noticeably lower than the prices in most of central Istanbul. And you might wonder why, considering that there are so many buyers - especially Turks."
Deggin is referring to a recent boom in the number of young Turkish professionals buying property. These are people between their late 20s and early 40s; singles, couples, or young families. Wouldn't these lower priced apartments within commuting distance to the city centre be ideal for these first-time buyers?
In short, no.
A domestic market with its eyes on the prize
Their demand for central areas is so strong that they're willing to make compromises, he says.
"Instead of purchasing a three-bedroom larger property with much more space, they buy a one-bed or two-bed property in central Istanbul. Unless you go for those proper Bosphorus front, prime central properties, you can still be in a very desirable zone and not have to pay an arm or a leg."
Deggin recommends foreign investors follow this domestic market: when it comes to cashing in on your capital gain, you're more likely to find a buyer if you concentrate in popular areas.
"If you're trying to maximise returns, stick to central Istanbul."
Oversupply has stagnated prices
The construction boom over the last decade has meant that in certain places, there is an oversupply, Deggin says. In some areas, like Beylikduzu, supply has outstripped demand, leading to stagnating prices.
"If you look at prices over the last five years of those outskirt areas, you'll notice there hasn't really been a notable price increase."
It isn't the same everywhere, he adds. "In some isolated areas like Bahcesehir, or in the more elegant places they have gone up. But generally prices haven't gone up that much."
For those buying for lifestyle, or not seeking a return in the medium term, they could still be an option, Deggin says.
"But they're long term-investments, not medium."
Beware of joint-venture ownership
Another pitfall to look for is joint-venture combinations, Deggin says.
This is where a developer teams up with a land owner. Instead of buying the land, the developer will do a deal that the land owner is given a proportion of the properties. There could be other stakeholders, too: like contractors who worked on the project.
When these stakeholders sell up, it could have an impact on property prices.
"When there are too many stakeholders, after completion of the project they will put their units onto the market and can undercut your price. Until the units are washed out of the market, you're not going to see any capital growth on your investment."
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