2014 Turkish property market review and future outlook

2014 has seen another successful year of development and growth in the Turkish real estate market. Avoiding the financial meltdown that has affected property sales throughout Europe, coupled with the easing of property laws and opening of the market in Turkey to more nations making it easier for foreigners to acquire real estate has seen the explosion of real estate sales in Turkey over the last two years, a trend that has continued well into 2014. 

This year Turkey has posted better numbers than ever before, data from the first four months of 2014 show residential sales of property to foreigners reached 5,194 units – up a huge 48% over the same period in 2013, resulting in nearly a billion dollars in sales before the busy summer period.  

The opening of the Turkish property market has certainly resulted in more sales, higher prices with the International Monetary Fund placing Turkey’s housing prices increase rate at number nine in the world, with an average price increase of 6.68% in 2013, and most certainly more investment opportunities opening up to those could would not have had the chance to purchase before. 


How has the market changed over the last year? 

What we have seen is a distinct polarisation of the buyer profiles emerging. This pattern has in fact been in the making since 2010, however, 2013-2014 it has further shaped itself resulting in definitive buyer profiles. 

The investor profile – One thing we have noted, is the development of a clear ‘investor’ profile emerging with absolutely no emotional attachment to the property they are buying other than a strong belief in the Turkish real estate market and the opportunities that investing in Turkey present. This segment is generally made up of people from the Middle East and Russia, people investing in what they see as an up and coming market, and to some, an opportunity to extract money out of their troubled home countries into a safe haven abroad. People in this category generally buy into larger cities such as Istanbul and to some extent, Antalya. Some have even been known to venture into cities in Turkey that most overseas buyers would never even have heard of such as Trabzon, Bursa, Yalova, and Konya – all representing great potential in their own right. 

The pure lifestyle buyer – To the other side of this spectrum, there is the ‘pure lifestyle buyer’, generally European and British with deeper pockets than classic second home/holiday homebuyers overseas. People in this category tend to go for more specialist properties such as custom-made homes, seafront villas and exclusive homes in higher-end areas such as Bodrum and Kalkan where you will find a range of elegantly designed houses showcasing the shift in quality of homes in these regions to the more luxurious end of the real estate scale. 

Types of property buyers in Turkey

Result of this on the Turkish real estate market? 

We have seen a marked reduction in the bargain home buyer and equity release second home/holiday home buyer, a segment that used to drive the volume but not necessarily the value, has now shifted towards more specialist buyers seeking purpose built homes in extravagant regions and exclusive locations. 

Which areas are best to invest in for 2015? – Areas in Turkey that are doing very well as a result of trend above: 

Bodrum – Yalikavak in Bodrum is still very strong as far as designer homes are concerned. Bodrum in general has seen an upwards trend of luxury purpose built homes for the more discerning buyer or keen sailor looking for waterfront access in an exclusive and highly private destination. 

In Bodrum area, the quality and prices of properties are higher than ever. Our largest single value sale to a British national in 2014 was a stunning £3.6m mansion in Turkbuku – and this is something that is starting to become the norm, as leading investors continue to look towards Bodrum real estate

Bodrum real estate

Kalkan – Similar to Bodrum, Kalkan is another destination where you will find more luxury type homes rather than same build apartments and houses. Found in an elevated position with extraordinary sea views, Kalkan has a more sophisticated fashion of authentic appeal for those looking for a privileged life in Turkey. 

Prices in Kalkan for British buyers are now hitting £500k - £700k range. In 2014 we have overseen three sales to British nationals in Kalkan over £850,000 for panoramic sea view villas. These are prices you would not see in Kalkan even 2 years ago; there is certainly a high upward trend in terms of real estate growth and value. 

Kalkan real estate

Fethiye – Another region to keep an eye on is Ovacik area in Fethiye, which is coming up in profile fast. Ovacik used to be a holiday-home only market yet that’s changing now. People are buying and building better homes there, larger houses suitable for year round living – resulting in the profile of Ovacik is being elevated beyond its traditional cheap holiday homes concept. 

In Ovacik, the most expensive villas in Fethiye would fall below £200k as recent as three years ago; however, we are now seeing villas exceeding £350,000 easily.

Ovacik property

Istanbul – Istanbul is still attracting an unprecedented volume of purchases from overseas buyers, mainly Middle Eastern buyers, followed by Russians, Turkic Republics of ex USSR such as Azerbaijan, Kazakhstan, and even the Chinese lately. Istanbul is known as the gateway between Europe and Asia, and as such, presents several investment options for overseas buyers, as well as billions per year in business trade, making the city an unparalleled destination for real estate purchasers. 

Prices in Istanbul can run well into the several millions for luxury Bosporus view apartments, while you can still pick up great investment prospects from as little as £50,000 in old city centre areas that are being redeveloped by the government such as Bahcesehir or Bomonti. 

Istanbul real estate

Are there areas that are not doing all that well?  

Yes there are, Alanya, Marmaris, Kusadasi to name a few. Again, this pattern supports the points made above. These areas are not regarded as ‘elegant’ lifestyle areas, neither are they seen as good investments, therefore they are the bargain second home areas that used to be popular during the earlier real estate boom around Europe that saw an emergence of cheap and cheerful same build villas, blocks of apartments, and the like with developers churning out homes to satisfy the need – that is not the case today.

These are areas where the demand is the lowest. With careful consideration, you can still find some value homes in these regions, however that is becoming a rarer case, most people who buy in these areas are those who are not looking for investment properties, rather are people who might have family in the region, or personal reasons for wanting to buy in these parts of Turkey. 

Outlook for 2015

We are convinced that the polarisation of real estate buyer profiles that we have seen and analysed in 2014 will undoubtedly continue in 2015 and beyond with more emphasis on each.

We expect more investors to seek out opportunities in Istanbul and beyond as the market awakens to some of the projects currently under construction, some investors might follow in the trend set by Middle Eastern buyers who have been searching outside of Istanbul for new upcoming regions in Turkey. We also expect more buyers to take up the 'running a business' option in Turkey, perhaps by purchasing a boutique hotel in regional areas such as Bodrum or Kalkan where we have seen a lot of success for hotel owners with mass tourism proving a big factor in purchasing with investment intent. 

We also predict some of the regional coastal favourites to continue their dominance of the real estate sector amongst British nationals, particularly Bodrum, Kalkan, Fethiye, and Antalya regions. British nationals tend to focus on better known areas such as Fethiye and Kalkan for there is definitely more familiarity, however, the better travelled and more active ones tend to prefer Bodrum area. 

With further developments over the last few months, including the announcement by Thomas Cook to start operating winter flights to the Turkish coast, we can only imagine 2015 as a year that once again sees record sales and further inclination that targets set by the government for 2023 are well underway to being met. 


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