Real Estate Prices Increase in Turkey
Investors are wondering what’s going on as property prices in Turkey soar. Rising prices are driven by many factors, including high inflation, weak local currencies, bullish real estate markets, local population growth, and domestic and international migration. In this blog, we will cover some key factors contributing to the rise in property prices in Turkey. Influx of buyers Turks are turning to real estate to protect their savings from inflation. Home sales in Turkey increased by 20.6% to 134,170 units in March 2022 (Turkish Institute of Statistics). It also made it easier for first-time buyers to climb the real estate ladder by offering low-interest mortgages. Sophisticated foreign investors are looking to use their properties for citizenship programs, while the lira’s depreciation against currencies such as the euro has also boosted demand. According to the Turkish Statistical Institute, sales to foreigners increased by 31% in March 2022, increasing the number of foreigners buying Turkish real estate as more foreigners discover the splendor of investing in Turkey. The numbers continue to break records. Most European countries are also facing an economic crisis, prompting many to invest in property elsewhere. Material costs go up Only 500,000 new condominiums have hit the market each year for the past three years, as construction has slowed, partly because of the pandemic. This is a significant reduction compared to the annual needs of 1 million households. In addition, the Turkish lira is relatively cheap due to the import of raw materials such as iron and cement, so construction costs are rising. Construction companies are struggling to keep up with the prices of materials they buy abroad, slowing construction activity. Turkey has many positive aspects that continue to attract foreign buyers, such as high return on investment (ROI), exemplary living standards and beautiful and modern properties. Supply chain disruption Global Supply his chain has been disrupted by his Covid-19. This supply shortage has significantly hampered the rise in domestic new home prices. It also increases pre-construction costs as less land is available for new construction and land is being sold at a higher price. Developers are forced to pay the highest price on the market and have to pass that cost on to the consumer. Residential real estate price index The Residential Real Estate Price Index (RPPI) is an index that measures how quickly household purchases of residential real estate have changed over time. In February 2022, Turkey’s RPPI increased by 96.4% for the year due to rising inflation. About a year ago, the index grew at an annual rate of 32%. Potential home buyers should act quickly and hope that prices will continue to rise. The real estate industry is generally a solid investment. No one can predict future trends in the Turkish real estate industry, but prices will continue to rise, so now is the best time to invest and you won’t regret making a mistake.