The residential real estate market in Turkey 2022 is divided into residential units, apartments, villas and rental houses. In the following report, we present the market size and forecasts for the residential real estate market in Turkey with a value for all the previous sectors.
Turkey’s Residential Real Estate Market 2022 Growth, Trends and Forecasts (2022 – 2027) and the effects of COVID-19 on the Turkish real estate market.
Overview of the real estate market in Turkey Kia 2022
- The residential real estate market in Turkey 2022 is expected to record a compound annual growth rate of approximately 8% during the forecast period (2022-2027).
- During the Corona (COVID-19) pandemic, the drop in interest rates has kept the Turkish residential market and the residential real estate market in Turkey active 2020. This year saw the largest number of home sales in history. The higher interest rates led to a decrease in the share of total sales pledged in the first half of 2021 compared to the same period in 2020.
- The rise in interest rates and economic restrictions in Turkey had an impact on the country’s general economy, and among its effects was the decline in real estate prices, as well as the decline in the Turkish lira.
- The lack of land available for development in the city centers has forced investors to turn to the periphery through large-scale projects and the development of collective housing is increasing rapidly.
- The Department of Housing Development (TOKI) leads collective housing development and renovation projects, with a focus on providing social housing for low- and middle-income families.
- Improper planning of Turkish cities and poor infrastructure due to rapid urbanization have created a demand for earthquake resistant homes in Turkey.
- According to the Central Bank House Price Index (HPI), house prices in Turkey grew by 32.39% year-on-year in April 2021 and by 28.56% in Istanbul.
- The inflation rate during the same period was 17.14%.
- As for the value of the Turkish lira, it fell by 19.6% against the US dollar, with an interest return of 17.6% on one-year deposits.
- Home price increases that lagged AIV returns and inflation since the beginning of 2017 have outpaced inflation and deposit rates in the first half of 2021 as they did in the previous year.
- The total volume of loans in Turkey decreased by 5.07% in the first half of 2021 compared to the same period in the previous year, after increasing by 4.03% in 2020. Mortgage rates that were on the rise in the first half of 2021 were a major contributor low loan size. In June 2021, mortgage loans accounted for 7.1% of the total loan volume.
Trends in the residential real estate market in Turkey 2022
Increasing the flow of foreign direct investment in the residential real estate market in Turkey 2022
Foreign direct investment in the residential real estate market in Turkey 2022
The number of home sales to foreigners in Turkey accelerated due to legislative amendments with investment limits for foreigners, as well as campaigns launched by real estate developers and banks, in addition to the appreciation of the foreign currency, which achieved a record annual increase of 78.4% in 2021 compared to the previous year.
- Official sources said that Istanbul continued to be the first choice for foreign investors. Residential real estate sales to foreigners in the city increased in September of 2021 by 25% year on year to reach 2,995 compared to 2,370 in September 2020.
- On the other hand, when it comes to nationalities, Iranian citizens continue to top the list of foreign residential property investors. It was followed by Iraq with 7,622 units, then the Russians with 4,494 units, Afghanistan with 2,508 units, and the Germans with 2,062 units in 2021.
- Also, Chinese investment in Turkey has increased significantly, and is expected to increase in the coming years. And the Chinese in general invest in luxury properties and beautifully designed five-star apartments with excellent services and facilities.
Sales of new homes in the residential sector will decline in 2021
- In Turkey, new home sales refer to the first sale of a home purchased through a land ownership agreement between buyers and the companies or persons building the property.
- Turkey averaged 48,758.25 units of new home sales from 2013 to 2021, reaching an all-time high of 511,682 units in 2019 and a record low of 461,523 units in 2021.
- Total residential sales in Turkey decreased in 2021 by 21.4%, compared to the same period in 2019, and the increase in mortgage sales was by 25.3% in the same period.
- The total sales and pledged sales in the country amounted to 16.2% and 26%, respectively, in the same period.
- The proportion of direct sales in total sales decreased between 2014 and 2021 from 15% to 12%.
Recent developments in the residential real estate market in Turkey 2022
Recent Developments in the Residential Real Estate Market in Turkey 2022 Growth, Trends and Forecasts 2022 – 2027
- In February 2022, Emlak Konut announced the construction of 900 housing units. The total value of the construction was about 3.1 billion Turkish liras, or about 211 million US dollars. The project is located in Sarıyer district and is expected to be completed by the end of 2024.
- In January 2021, Ofton Construction announced the construction of three housing projects, which are in the planning and design phase, namely Bomonti, Levente and Nisantasi. These three projects are located in different locations: Sisli, Levent, and Nisantasi, and all of these projects are expected to be completed by 2025.