In the past decade Istanbul has gone from a bit-player to a star on the world’s main stage. Turkey’s largest city has become an international centre of economy and trade. Straddling two continents means Istanbul is ideally placed between Europe and the Middle East, attracting investors from all over the northern hemisphere and beyond.
Istanbul's property is a particular focus, with multi-million dollar deals done every day. Istanbul is the country’s prime real estate destination and intense investor interest has pushed prices into the stratosphere. What makes Istanbul such an attractive investment destination?
Istanbul’s local economy is one of the world’s fastest growing. Over the last five years, the city’s GDP rose, on average, 7.5% each year. Between now and 2017, GDP is expected to rise by 6.6% each year - compared to the 3.6% average over the rest of the country, according to Euromonitor International.
By 2025, Istanbul is tipped to have the 14th highest GDP growth among world cities, according to predictions by Foreign Policy and McKinsey Global Institute, with a GDP of more than US$600 billion.
Looking at these staggering figures, it’s little wonder that Istanbul generates more than a quarter of Turkey’s GDP. A quarter of the country’s industrial labour force lives in the city, driving productivity - which is 50% greater than the rest of the country - and contributing 40% worth of the nation’s tax revenue. That includes the taxes of the the 27 billionaires who call Istanbul home - making the city home to the seventh highest number of billionaires in the world.
Istanbul’s bullish economy is the main driver behind the huge amounts of foreign direct investment that flow into the country each year. FDI has leapt from $36 billion in 2002 to $125 billion in 2014, with large investments in banking, telecoms and construction sectors. The retail sector has also benefited from FDI, with major brands opening and expanding their presence within Istanbul and wider Turkey - catering to the country’s fast-growing middle class.
It's where east meets west
Istanbul’s location, straddling two continents, means it’s always been an important sea and land trade route. Exports from Istanbul make up around half of the country’s total, while imports to Istanbul are around 40% of Turkey’s total.
Its reputation as a financial powerhouse has also attracted investment and interest. Most of the world’s largest global firms have offices here - such as Citibank and Merril Lynch - and the city is quickly becoming an international business centre.
Visitor numbers are high
Turkey attracted around 37 million tourists last year, and 12 million of those went to Istanbul - making it the fifth most visited city in the world. Contrast this to 2002 - when the city received just 2.4 million international visitors. Traditional attractions like the Hagia Sophia, Blue Mosque and the enormous Grand Bazaar are huge draws to visitors, and they’re now joined by world-class restaurants, museums, spas, concert venues, hotels and leisure facilities. And these visitors are spending up big - spending has increased by around 20% each year, fuelling the city’s economy and growth.
Domestic housing demand is high
With around 400,000 new residents arriving each year, Istanbul’s population is one of the fastest growing in the world. A growing middle class means there are more people clamouring better quality housing to buy and rent in the city. As the main centre of real estate in the country, the city has the highest rents and property prices in Turkey.
Despite the soaring prices, demand for housing has never been higher. Apartments are in particular demand by the young workforce, which makes these properties a favourite for investors, who are buying apartments and apartment blocks faster than they can be built.
Presently, demand is outstripping supply by 70,000 units annually in Istanbul. In response, the government is working to provide housing by regenerating rundown areas.
The high demand for property alone ensures Istanbul’s investment potential is huge.
Foreign demand is high
Over the last half decade, the government has relaxed laws for foreign buyers, granting citizens from more countries than ever before the right to buy property in Turkey. Foreign property buyers are now also granted an automatic year-long residence permit, sweetening the deal for those buyers wishing to move to Turkey.
Thanks to these measures, foreign real estate investment in Turkey is at an all-time high. Last year, foreigners bought $4.32 billion worth of properties. Contrast to figures from 2009, when sales totalled $1.78 billion and it’s clear the relaxed rules are working.
Middle Eastern buyers are at the forefront of the foreign investors in Istanbul, who are discovering the city has a similar culture to their home countries, as well as being a convenient two-hour flight from major Middle Eastern cities.
These investors are also investing heavily in the hotel sector as tourism from the Middle East is a fast growing industry.
Capital growth and rents are rising
Turkey’s real estate sector has been a major drive behind the country’s economic growth, with construction, rent and rising prices all contributing to the economy. Istanbul’s capital growth rate is one of the highest in the world. Price per square metre has grown by 20% in the last year, and 24% in the city’s most expensive area, Besiktas, where price per square metre now averages $2000.
With growth like this it follows that rental prices are also soaring. A Cushman & Wakefield report recently showed that three of Istanbul’s streets are in the top 10 expensive streets in the world as far as rental prices. In 2014, Bagdat Avenue, Istiklal Avenue and Abdi Ipekci Avenue saw rental increases of 24.4%, 27.3% and 20.9% respectively.
Its central position means a four-hour flight can take you to 56 countries, 1.5 billion people generate around a third of the world’s GDP. The land and sea routes that have been in use for generations are still recognised - in fact, the Bosphorus is one of the busiest waterways in the world, with more than 200 million tonnes of oil passing through each year and more traffic than the Suez Canal.
It's home to a number of mega projects
The Turkish government is channeling billions into huge projects, such as a third bridge on the Bosphorus, an intercity train network, motorways, two new commuter cities, an airport which will be the biggest in the world, an underwater tunnel connecting the Asian and European sides, and an residential and commercial canal project, tipped to be the largest in the world..
As well as improving the lives of Turkey’s citizens, these ambitious projects have attracted interest from investors.
One of our top investment or lifestyle opportunities in the entire city, this panoramic sea view project is found in the city centre of Istanbul in Cihangir and offers apartments for sale in sizes ranging from one – two bedrooms.
Located in the heart of Besiktas within easy walking distances to everything, these brand new apartments are for sale at exceptional prices not to miss out on – arrange your visit at the earliest before all units have been sold.
Situated within a huge plot of land for a private lifestyle guaranteed, this detached villa is for sale in the residential area of Buyukcekmece in Istanbul and enjoys nature views from all rooms within the property.
Inspired by the rich Ottoman history in Bursa, this project offers comprehensive facilities for residents and is surrounded by a man-made stunning lakeside where residents can indulge in sailing and other excursions.