The end of Turkey’s real estate ‘Buy Zone’ is nigh
By: Cameron Deggin
Data released by the Turkish Statistical Institute (TurkStat) shows that the Turkish economy shrunk by 0.2% in the third quarter of 2024, during the period July – September. This is the second quarter in a row that the economy has shrunk, following a 0.2% decline during the period of April – June 2024.
This confirms that the Turkish economy is now in Recession.
The data also showed that household consumption declined by 0.3% quarter-on-quarter, while government consumption decreased by 0.4%. Consumption has been stifled by the key rate being been held at 50% for eight months in a row. Year-on-year growth for the third quarter was recorded at 2.1%, down from 2.4% in the second quarter.
Nicholas Farr, Emerging Europe Economist at Capital Economics, predicts that interest rate cuts are soon likely, as high borrowing costs slow investment and production. Farr said: “The Central Bank suggested at its meeting last week that it thought domestic demand was slowing. This could raise expectations that the Central Bank may cut interest rates as soon as its December meeting.”
Interest rate cuts imminent – what this means for real estate?
As recent as August 2024, the average interest rate on a three-month Turkish Lira deposit from a Turkish bank was a staggering 50%, with some banks offering rates over 51%. This was part of the Central Bank’s efforts to tighten liquidity in the market and attract more deposits in Lira in order to stabilise the currency and control inflation.
In 2023, $13 billion in Foreign Direct Investment poured into Turkey, with data from 2024 suggesting that will increase to $15 billion by the end of the year. Investment is still coming into Turkey heavily, but not into the real estate market, with investors currently choosing Lira-denominated assets such as bonds, stocks and shares, and bank deposits due to the high interest rates offered.
The investment shift is coming.
Once the Turkish government starts lowering interest rates, a shift in investor financial behaviour is expected to occur. Investors will likely look to withdraw funds from bonds, stocks and shares, and deposit accounts – stemming from concerns that Turkish Lira will gradually weaken following the first interest rate cut. High interest rates are key in maintaining the strength of the Turkish Lira by encouraging the sale of Dollars in exchange for Lira.
Many investors, both local and foreign, may choose to move their capital into traditional investment avenues such as the real estate market. For locals, real estate acts as a safe haven and protects against future devaluation of the Turkish Lira. For foreigners, many may opt to keep their capital in Turkey in order to avoid potential taxation issues in their country of origin on the gains they have accrued. This will lead to an upward trend in property prices.
Buy now before a tsunami hits the market
In 2023, a total of 1,225,926 property units were sold across Turkey, with foreign buyers accounting for 35,005 transactions, representing 3% of the market. Istanbul remained the top performer, recording 198,739 sales, followed by Ankara with 114,432 and Izmir with 65,465 sales.
With Turkish nationals making up over 95% of the market and foreign buyers accounting for just 3% of total sales, the current demand-supply dynamics clearly position the market in a favourable ‘Buy Zone’ – offering excellent opportunities for early investors who act NOW.
Until the anticipated first interest rate cut by February 2025, Turkish citizens are expected to prioritise high-interest bank accounts and other interest-paying investments. Following the initial rate reduction, the property market is predicted to gain momentum, with a surge of domestic buyers entering by mid-2025, driving a significant rise in property prices.
Purchasing before the anticipated interest rate cut offers several key advantages:
- Buyers can secure the best opportunities before locals re-enter the market.
- Benefit from maximum bargaining and negotiating power.
- Acquire properties at their most competitive prices.
- Early investors have the chance to choose from the finest options available.
CEO of Property Turkey, Cameron Deggin said: “The ‘Buy Zone’ in Turkey is closing. As inflation decreases and interest rate cuts occur, local and international buyers will re-enter the market and prices will start to increase. This is now a pivotal moment for investors considering buying in Turkey with prices currently at their lowest.”
Where to invest in Turkey in 2025?
Investment opportunities in Central Istanbul
In 2023, the Turkish Government announced new stricter regulations on Airbnb in Turkey. This saw the number of short-term apartments available in Istanbul drop from 32,000 to 21,000. As the world’s most visited city in 2023, the demand for short-term rentals in Istanbul has never been higher.
According to data released by Statista Market Insights, revenue from short-term rentals in Istanbul is forecasted to reach $1.33 billion by 2028, up from $1.02 billion in 2023. This suggests that investors who own apartments in Istanbul that are suitable for Airbnb will see greater returns via increased occupancy rates as supply falls and tourism rises.
High-ROI Areas: Focus on neighbourhoods like Sisli and Kagithane, where regeneration projects and central locations promise strong returns.
Sense Levent: Designer residences in central Istanbul
Offering luxury living at affordable prices, Sense Levent apartments are development in collaboration with Designer Turkey and world-renowned architect, Saffet Kaya. These properties are situated within the Urban Regeneration area of Kagithane and are approved for Airbnb, as well as being suitable for Turkish Citizenship by Investment.
Sense Sisli: Istanbul affordable city centre apartments
Rising within the fast-growing and lively area of Bomonti, Sense Sisli apartments are within walking distance of Nisantasi, Cevahir Shopping Mall, and Sisli Metro – you couldn’t find a more central or better location to invest in Istanbul today. Offering up to 10% rental income annually via Airbnb and suitable for Citizenship by Investment applications.
Sea view and seaside properties are favoured by local Turks and families living in Istanbul – on the Asian side in particular. Areas including Pendik, Kartal, Maltepe, and Dragos offer superb infrastructure, wide roads, beautiful green parks, open spaces, schools, shopping malls, the incredible Pendik Marina, and everything else a family would need within fingertip distances.
Transportation from these areas to the city centre and European side is relatively easy with public transport running from Sabiha Gokcen Airport and over to the European side of the city for those commuting. Sabiha Gokcen Airport is an international airport with flights towards numerous capital cities across the world. Properties on the Asian side offer excellent rental prospects as well as suitability for lifestyle buyers and families.
These prestigious properties command exceptional prices and represent the pinnacle of exclusivity, offering a refined lifestyle in Istanbul. Highly sought after, with swift sales and predominantly Turkish buyers comprising 99% of the market, this segment is both private and limited. For tailored advice and access to options that match your budget and preferences, please contact us directly.
Bodrum – the south coast of Turkey
Stunning Bodrum is one of the most sought-after destinations in Turkey for affluent tourists and expats, attracting more than 1.5 million visitors annually. This consistent demand ensures strong rental yields and significant property appreciation for investors. Beyond its investment potential, Bodrum offers an exceptional quality of life, known for its breath-taking coastlines, pristine beaches, world-class marinas, and idyllic Mediterranean lifestyle.
U House: Gumusluk luxury villa in Bodrum
A truly unique property in every sense. This villa has been designed in collaboration with Saffet Kaya and seamlessly blends modern architecture with its authentic surroundings, swimming pool, and green garden – a harmonious sanctuary where sensuality and tranquillity come together as one.
Located above Gumusluk Bay with stunning panoramic views heading out towards the surrounding Greek Islands, this villa has been built with ground-breaking architecture and a distinctive glass design. This masterpiece home is a result of an exclusive collaboration with Saffet Kaya.
“As I have stated before, the next significant wave in Turkey’s real estate market is likely to begin around mid-to-late 2025. Demand will increase from the first quarter of 2025 with those who invest early having the maximum returns on their investment come the next peak. I expect the next real estate peak to occur around 2027-2028 with an average upside of 50% in USD terms. This will be even higher in particular central Istanbul segments.”
Cameron Deggin
Opportunities like this are fleeting. The time to enter Turkey’s real estate market is now, before interest rate cuts unleash a wave of demand that reshapes the market landscape. Contact us for a personalised investment plan and take the first step towards securing your financial future in Turkey.
Bodrum 
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