Why is the price of Turkish real estate rising?

The steady growth in property prices in Turkey continues, remaining rapid and sustainable. There is every reason to believe that this trend will continue for a long time. Statistics show that the largest increase in housing prices over the past year was observed in Turkey. Why is this happening? How long will the growth continue and what properties will it affect? Let's figure it out together.

Factor No. 1: pandemic

Of course, the pandemic affected not only Turkey and is not the main reason for the rise in housing prices, but it played a role in the rise in real estate prices. Large-scale bans and restrictions, remote learning and work, curfews and the inability to leave home at any convenient time: these factors have significantly increased the importance of having your own rather than rented housing. If previously renting was a worthy option and even many of those people who could afford to buy did not think about purchasing, now the situation is changing very rapidly.

Factor No2: deficit

Following the growth in demand for housing, it was quite logical that there was a shortage of housing stock. At the same time, the events of the pandemic became a serious problem for most construction companies and many projects never started.

In addition to this, a unique mortgage company was carried out in Turkey with minimal interest rates and those families who were previously not ready for such acquisitions were able to afford their own housing, which also caused record sales in the real estate market. Of course, construction companies have already responded to the shortage and the real estate market will be replenished with new objects, but this will not lead to a decrease in the cost of housing in the country. Why? To understand, let's move on to the next factor.

Factor No. 3: rising cost of building materials

During the pandemic, the cost of building materials has really increased, and this has especially affected those items that are imported from abroad. Even though production is gradually reaching its former levels, there is no talk of fully compensating the deficit yet; the market needs some time to “be saturated.” How much specifically is still difficult to say.

Renovation issues

Due to the shortage and other factors discussed above, many potential buyers decided to look for housing on the secondary market, but the rise in prices did not bypass this part of the market. The thing is that with the beginning of a new war of construction activity, old residential buildings began to be demolished, which is quite expected: space is needed for mass construction.

As a result, there is again a shortage, because new residential complexes do not grow overnight, and prices have risen again.

In addition, there is another significant trend. Those people who have free housing are in no hurry to sell it, preferring profitable rentals and, accordingly, the object of sale and do not help in any way to get rid of the shortage in the real estate market.

It is important to realize that renovation efforts with the housing stock have reached enormous proportions, and not a single province has been left behind. Of course, this situation will provide a lot of significant advantages in the foreseeable future, but right now renovation has become another reason for the increase in the cost of housing on the secondary market.

Instead of a total

To summarize, I would like to discuss the time frame during which price increases will continue. Experts from the real estate world confidently say that the rise in housing costs in Turkey is guaranteed to continue not only this year, 2022, but also until next June, 2023. It is still unclear how the further situation will develop and whether it will be possible to get rid of the deficit in the primary market.

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