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About Istanbul

Updated: 26 Jun 2014

Created: 14 May 2013


The Istanbul real estate market may seem daunting from the outside, but once you get to know it, it is, in fact, an investor's dream and buyer's playground. With 39 official districts, numerous mega projects, and upgrades to transport, Istanbul is constantly bettering itself and evolving into a city that matches the likes of other global metropolises.

This dynamic city, with its unique pulse, is unlike any other. Although no longer Turkey's capital, it's all-encompassing as the financial, cultural, tourist, business, education, and economic heart. Home to the famous Bosphorus waterway, once called Constantinople and Byzantium, everyone appreciates its fascinating diversity, a unique blend of East and West, ancient and modern. Istanbul's unique charm is sure to intrigue and fascinate any visitor or potential investor.

Until 1923, and the new formation of the Republic of Turkey, Istanbul was the capital city of the Roman, Byzantine, and Ottoman empires. Exploring historical mosques, traditional restaurants, bazaars, shops, and famous sites evokes a sense of wonder. Many foreigners decide that a visit is insufficient, and they call Istanbul their home or invest in property, feeling a deep connection to its rich and diverse past.

Istanbul

 

Introduction Guide to the Istanbul Real Estate Market

 

Location and Geography

Istanbul is the only city that embraces two continents, Asia, and Europe. This alpha world city of significant economic importance is in the northwest of Turkey and straddles the Bosphorus Strait. The smaller European side sits west, separated by the Golden Horn. Istanbul also sits next to the Marmara and Black Seas. Bigger than London and New York, its population of over 15 million people represents a significant part of Turkey and overshadows the capital city of Ankara as the beating heart.

 

Climate and Weather in Istanbul

Unlike warmer coastal regions of Turkey to the south, Istanbul is not seasonal and a city to be enjoyed anytime. Due to Istanbul’s size and typography, weather is changeable, and temperatures fluctuate depending on location. Temperatures averages around 23*C (73*F) during summer but can reach up to 32*C (90*F) on occasions. Summer sees little rain, only a day or two a month, leaving it an excellent time to make the most of outdoor activities on offer. Snowfall is common in winter, with an average temperature of 4*C (39*F). The city caters for colder weather by offering a wealth of indoor attractions. Many bazaars, shops, restaurants and museums are covered so, like most major cities, there is something to keep you occupied anytime!

Istanbul in Turkey

 

Why People Invest in Istanbul

Alpha City Status: Istanbul is a major city that ranks alongside New York and London, and is officially an alpha city. This means it affects global political and financial markets. As Turkey's largest city, its importance for property investments cannot be overstated. Istanbul is the economic hub of Turkey, offering numerous job opportunities in various sectors, making it an attractive location for local and international investors looking to buy homes.

Types of Property: Real estate is an ideal option for investors since the housing market is the biggest. The portfolio ranges from basic one-bedroom apartments to commercial and luxury residential property sales. Due to the property appreciation potential and ability to withstand external factors that sometimes rock other global housing markets, the prospect of long-term capital growth appeals.

The face of Turkey: Istanbul reflects Turkey, from economic growth to monthly housing sales and monetary policies to domestic demand. Housing trends begin and end here. The housing price response indicates how the rest of Turkey will perform. Istanbul's strategic location between Europe and Asia also makes it a key transit point and reflects government policies.

Transport Network: The local municipality is constantly investing in the transport network. In addition to Turkey’s best airports, there are two tunnels under the Bosphorus and bridges over it. They have also invested in highways to other places to eliminate travel time and carbon emissions. Locals also buy the Istanbul Kart system to get around on ferries and buses.

Buying Process: In the past, buying property in Istanbul as a foreigner was a long, drawn-out process, but these days, if your finances and property paperwork are in place, you can get your deeds the same day. The streamlined buying process, with costs amounting to roughly 8% of the purchase price, ensures a smooth and efficient transaction, leaving you reassured and confident in your investment.

Istanbul Galata

 

Prominent Districts of Istanbul

Historical Fatih: This UNESCO World Heritage site contains iconic buildings like the Hagia Sophia, Blue Mosque, and Topkapi Palace. Unfortunately, given its UNESCO status and prominent status as home to the historical peninsula, demand for housing is high. Still, supply is low, which forces prices up and buyers to neighbouring Zeytinburnu. Two neighbourhoods, Balat and Fener, have also become more prominent for their cultural status.

Prestigious Besiktas: Sitting on the opposite side of the Golden Horn but also belonging to European Istanbul, Besiktas demand much fame and respect thanks to the prestigious housing market. Including the famous neighbourhood of Ortakoy, which earned fame for the waterside mosque, Besiktas is also home to Dolmabahce Place, the last home of the Ottoman sultans.

Trendy Beyoglu: Sitting next door to Besiktas and known as the new part, Beyoglu is famed for its shopping, dining, and nightlife scenes. Yet look behind this façade, and you will also discover fascinating history from when it was known as Pera, a place for high-flying members of social circles and foreign consulates.

Kadikoy: While the above three dominate European Istanbul, Kadikoy is the king of the Asian side. It stands like a fully functioning town with an extensive ferry service terminal, a long coastline, and vibrant shopping and nightlife districts. Kadikoy used to have a reputation as a student hub, but these days, it also attracts other demographics of society.

Green Bahçeşehir: This district isn’t known in tourist circles but stands out in the housing market. Being a rural inland area, there are no coastline views, yet the area has earned fame for the number of green spaces. Connected to the TEM highway, many professionals buy property here and then commute the short distance into the city centre.

Istanbul property

 

Buying Luxury Property in Istanbul

Neighbourhoods along the European and Asian Bosphorus shores are where to find luxury property. These include Bebek, Sisli, Ortakoy, Ulus, Tesvikiye, Kanlica, Kandilli, and Emirgan, where prices easily compete with those of Paris, London, and New York for luxury homes. The most expensive prices per square metre are in the Sariyer district, where prices range from 3000 to 6000 euros per square metre. You will also find that the homes match the neighbourhood for prestigious status. Generally, the price automatically goes up if it has a view of the Bosphorus. However, in recent years, developers have also been building new luxury homes in other districts with lower prices.

 

What is a Turkish Real Estate Investment Fund?

A managed Turkish REIF strategically pools investor capital together within Turkish Capital Markets Board (SPK) regulations to invest in a diversified portfolio of assets. A Turkish REIF offers security and transparency, ensuring monitored transactions and a secure investment environment. This structured approach ensures tax advantages, risk diversification, expert management, and optimal returns.

Investors own shares or units rather than full ownership. By pooling, investors gain exposure to different markets and can invest with small amounts of capital. They are also relieved of many maintenance and management responsibilities that come with owning individual properties. For more information about this, call our international real estate services.

Funds in Turkey

 

The Bosphorus Strait and Yali Mansions

For centuries, empires have battled to control the Bosphorus, which links Europe and Asia and separates the two continents. This strategic location offers a calmer life with many green spaces and dominates local real estate markets. The Bosphorus is a critical waterway enabling maritime traffic to pass through easily, and its presence significantly influences the value of properties along its shores.

The essential shipping route isn't the only claim to fame. Cruising the Bosphorus is a top tourist activity, and shoreline homes, called yali houses, makeup Turkey's most expensive housing market. With their unique architectural style and historical significance, these wooden Ottoman villas sell for as much as 50 million USD. Formerly built by the Ottoman royal circle, these days, the mansions are under protected status because of their cultural heritage, making them a unique and highly sought-after investment opportunity.

 

New Real Estate Developments

A common thought is that those residing in classic historic and more established central districts have the best quality of life in contemporary apartments, but this may be primarily income-based. Views, landmark buildings, classic architecture, and sought-after areas have a higher price tag! Quality of life is “the general well-being of individuals”. Instead, new suburbs on the outskirts offer residents spacious apartments at lower prices.

These up-and-coming areas have modern health centres, trendy shopping malls, sports facilities, and entertainment; many are now turning here to set up homes. Suburban towns on the outskirts accommodate growing housing needs. Structured and comprehensive complexes replace shanty houses on the outskirts with low-priced apartments. Most foreign investors, particularly individuals rather than institutional investors, use low prices to capitalise on growth prospects. Great areas to look at include Bahcesehir, Kucukcekmece, and Buyukcekmece.

Modern Istanbul property

 

The Turkish Citizenship by Real Estate Investment Scheme

Like other countries, the Turkish government runs a scheme where foreign property buyers who invest can become Turkish citizens. However, Turkey's scheme ranks as one of the best. With minimum entry levels of just $400,000 and an average citizenship application time of six months to a year, it is the cheapest and quickest. Additionally, the scheme extends to the applicant's family, and they can keep dual citizenship. The bonus is that holders of the new citizenship don’t have to reside in Turkey for any length of time, and all these factors combined make it one of the world’s best golden visa programs.

Turkish Citizenship

 

People Also Ask These Questions

 

Is buying property in Istanbul a good investment?

Yes, if you keep it for a mid-to-long-term period. Most importantly, foreign buyers unsure of local markets should research carefully because some areas perform better than others for social amenities, public transport, and infrastructure that add to investment potential. Additionally, prices per square metre, rental returns, and capital growth rates vary from district to district.

 

Are property prices falling in Turkey?

In real terms, real estate prices are falling. However, house prices, according to the Turkish Central Bank, since COVID, have risen at an extraordinary rate, sometimes as much as 30 per cent in a year. This trend wasn't specific to Turkey but across the globe. This year, experts predict housing markets will again level out, and the real estate industry will return to a regular growth pattern. Remember, the golden rule is that every town, village, and city perform differently; hence, do local research, not countrywide.

 

Is it a good time to buy real estate in Turkey?

Anytime is good. Most real estate sectors are steady with established neighbourhoods. In developing areas, especially the outskirts, newly developing neighbourhoods receive infrastructure upgrades, including the M2 Metro lines connecting the main city centre with the airport. However, rather than look at Turkey as a whole, go regional for direct investments since key factors vary. For example, some areas have more demand for housing than supply, pushing prices up and forcing real estate buyers to move to other places. To clarify, your question shouldn't be whether it is a good time but how to make a good investment.

 

What is the average price of a house in Istanbul?

The average price is 1,177.00 Euros per square metre, with the average property for sale going on the market at 140,000 Euros. However, prices of villas and apartments for sale vary from district to district. The most expensive district to buy a modern apartment is Sariyer, which averages 3,219 €/m2. Besiktas and Kadikoy follow this. The cheapest area for Turkish properties is Esenyurt, 586 €/m2, followed by Sultangazi, Arnavutkoy and Beylikduzu. Please remember that when you buy, exchange rates of foreign currencies will affect your purchasing price since the Turkish market operates in Turkish lira.

 

Can I Rent My Apartment on Airbnb?

Yes, you can. Residential apartments in tourist hotspots like Fatih and Beyoglu are good areas for maximum occupancy and sound investment returns. However, please bear in mind that there are strict regulations since local authorities have aggressively tightened them. This isn’t specific to just Turkey, but has also happened in Spain as well. International investors who want to do this must obtain a license and get permission from other apartment owners. This involves much work and red tape. Hence, the current trend is to buy hotel-branded residences or developments with prior approval.

 

What is the property transfer tax in Turkey?

The tax is 4% of the home’s value. The law says that the buyer and the seller are responsible for 2% each, but this changes from sale to sale. Sometimes, the buyer offers to buy the whole percentage, while often, when buying off-plan homes, the developer will pay.

 

What is the Capital Gains Tax in Turkey?

The capital gains rate depends on the profit made on the real estate for sale. The tiered structure has four bands ranging from 15% to 35% tax. However, if you have kept your residential home for at least five years before selling, you won't have to pay.

 

Can foreigners buy property in Istanbul?

Yes, foreign nationals can buy homes in Istanbul. The procedure is just the same as if you were a Turkish citizen. This works out much better than in other countries, where foreigners often wait longer to receive their title deeds. You will be surprised at just how quickly the sale happens. Accept the deeds the same day if all finances and paperwork are ready. However, most sales complete within two weeks. This means you can spend more time researching and finding your dream home.

Istanbul

 

Use Our Services

As real estate consultants, we've helped thousands of buyers and international investors to purchase property. Whether looking for luxury standards or affordable apartments, many options have excellent returns on investment. Our local agents are also knowledgeable in all aspects. They will answer all your questions about the residential property market, real estate rental yields, or the citizenship by investment scheme. Additionally, we don't just show you homes when you view properties with us. We show you all the corners of this dynamic city so you can make informed decisions. See our portfolio of investment options here, or call us today and chat with an agent about the Istanbul real estate market.

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