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September 27, 2021
What is return On Investment Value (ROI) in real estate in Turkey

We talked in our previous article, about the types of real estate investment in general, and the forms of real estate investment in Turkey in particular, and we mentioned that real estate investment has different patterns depending on the period within which the investment return is expected, and we also mentioned that the investment aspects vary based on the form of this return, either by resale or rent of the property.

Read Previous article: How to invest in Real Estate in Turkey ?

However, in the previous article, we did not mention the value of the investment return and the amount of expected profits that the investor will earn, so in this article we will clarify the average investment return for each type of investment that we explained previously.

Before going into details, it is necessary to refer to several important points that we considered during our research and the results that we have reached:

♦ For the figures in this article, we relied on several official and unofficial sources concerned with the Turkish real estate market and monitoring the rates of increase in prices according to the difference in supply and demand, and the difference in the annual inflation rate.

♦ We used the Turkish lira to calculate the return on investment on an annual basis.

♦ We chose Istanbul as it is the most popular city for investors, and therefore the percentages mentioned in this article may not apply to the investment returns of real estate outside Istanbul.

♦ We will mention the average rate of return on investment, which certainly may vary from one region to another.

♦ In addition to the above, we relied on our experience in the real estate field and our daily monitoring of the movement of the real estate market in Turkey and the change in real estate prices and rents.

1 - Return on investment by leasing the property:

Real estate rental is one of the most common forms of investment in Turkey, and it is very popular among Turkish citizens themselves, as we find that many Turkish citizens prefer buying and renting a property over any other type of investment, due to the high demand for rental throughout the year.

Depending on the details we mentioned in our previous article, the annual rental returns for real estate in Turkey are as follows:

♦ Residential apartments: annual rental return of 4% as a minimum of the property value.

♦ Furnished apartments: annual rental return of 6% as a minimum of the property value.

♦ Commercial shops: The annual rental return is 5% as a minimum of the property value.

♦ Hotel apartments: annual rental return of 8% as a minimum of the property value.

Note: Regarding hotel apartments and furnished apartments, it is worth noting that they may be vacant during certain periods of the year, but they are rented on a daily or weekly basis in good prices during the tourist seasons, and we have taken this into account in the mentioned percentage.

2 - Return on investment through resale:

Real estate prices in Turkey are having a steady annual increase. According to the Turkish Statistical Institute, the average increase in housing prices during the past year was 30%. This was certainly not a natural increase, as it was accompanied by the global spread of the Corona epidemic, which prompted a large percentage of the population to turn to fixed assets, in addition to the difference in the price of the Turkish lira, as is known.

However, in general, real estate prices in Istanbul have an annual increase that varies according to the type of property and its region, and accordingly we can determine the return on investment for resale as follows:

♦ Ready real estate (residential and commercial apartments): 10% annual increase in the value of the property as a minimum.

♦ Real estate under construction: 25-30% increase upon delivery of the value of the price paid in instalments.

♦ Lands prepared for construction: The construction project is a high-return investment, as the land, after construction is finished, will be divided into residential apartments and shops, the value of the investment return may double several times by the end of the project. However, several things must be considered, namely that this type of project needs to obtain many licenses, in addition to the significant increase in the prices of building materials, as the increase during the first eight months of this year reached 45%, according to the Turkish Statistical Institute.

♦ Purchase of agricultural land and resale when it enters the regulatory area: It is not possible to determine a fixed percentage of the expected return on investment for such a project, due to the different regions and their proximity or distance from government projects and public utilities such as airports, industrial cities, and tourist areas. But we mention as an example of this type of investment the lands located on both sides of the Istanbul Canal project, where a decade ago these lands were almost empty lands and sold at cheap prices, while at the present time, after the announcement of the canal project, it has become one of the most expensive areas. It made the owners many times the purchase price.

 

In conclusion, we would like to note that the percentages mentioned in this article are correct until the date of its publication, and they may change according to the movement of supply and demand. For any additional information on the return on investment in real estate in Turkey, you are welcome to contact us to take the advice from real estate experts.

 

 

 

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July 18, 2019
Sales of real estate to foreigners in Turkey Increased in the first half of 2019

Housing sales to foreigners in turkey increased by 30.5 percent in June, Where the number of apartments sold to foreigners during the last month 2,689 homes. The number is the highest in half a year in the history of home sales to foreigners in Turkey.
Istanbul was ranked first among the Turkish states, the number of apartments sold to foreigners during the first half of the current year: 8,903 housing units.
According to the nationality of the buyers, the highest number of houses sold to Iraqi citizens, where the number of housing sold to Iraqi citizens during the month of June last 429 apartments, respectively Iranians with 415 unit, and in third place Russian citizens with 190 apartments. followed by German, British and Kuwaiti nationalities, respectively.
The number of homes sold to foreigners in all Turkish states during the first six months of this year was 19,952 units, i.e. an increase of 68.8% over the same period last year.

Effect of the Turkish citizenship Law:
The Turkish citizenship law and its subsequent amendments had the greatest effect on the increase in sales to foreigners. This law grants every foreigner who buys a property worth $ 250,000 or more the right to apply for Turkish citizenship. which reflected positively on the Turkish real estate sector, Only Istanbul achieved an increase of 22.6% during the first half of 2019 compared to the same period of 2018.

Mortgage sales drop:
The high interest rate of mortgages has led to a significant drop in mortgage sales, where the number of housing mortgages in June 2019 decreased by 84.6% compared to the same month last year.
In addition to the high interest rate, the citizenship law was instrumental in reducing the demand for mortgages, because the law requires payment of the full price of the property when applying for citizenship. In addition to the discounts provided by construction companies to investors who want to buy in cash.

Economy wins:
Particularly, large-scale branded housing projects direct foreign sales by seeking high added value and prestige, the new regulations that facilitate the investment in turkey is not only effect the real estate sector, But it gains the Turkish economy as a whole.
Foreigners who invest in real estate sector spend a certain period of the year in turkey, that creates new business fields in turkey.
The upward trend of foreign investment is expected to continue in the coming months.

source: emlakkulesi.com

 

Read Also : 

• 10 points you have to read well before singing a property sales contract in Turkey

• Can foreigners buy a property in Turkey ?

• How to buy a property in Turkey in 10 steps ? 

• Turkish citizenship by buying a property .. conditions and documents required 

• Property taxes in Turkey

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July 03, 2019
Properties rental rates rise in Turkey during July 2019

Inflation rates have been announced by the Turkey Statistical Institute. Thus, the rent increase rates for July 2019 were announced. Here are the rent growth rates in July 2019 ..

Tenants who wish to renew the annual lease will have to pay an increase in rents. This increase is calculated under the law of obligations. Under this law, the rate of increase of rents on tenants can not exceed the producer price index rates. 

In 2018, due to the negative effects of the rise in inflation rates on rents, the rent increase calculation method was changed.
The Medium Term Economy Program (2019-2021) prepared by the Ministry of Treasury and Finance and the Strategy Budget Department was announced last September. According to the New Economy Package, rent increase can no longer be calculated according to producer price index rates, the upper limit of the rent increase rate will be calculated according to consumer price index rates.

According to these changes, the provisions of the Turkish law of Obligations will be applied on the basis of the average annual rate of change of the consumer price index on new leases and on those that will be renewed.
Inflation rates are reported monthly by the Turkish Statistical Institute.

Rates of increase of rent for real estate for July 2019:

As of today, it has become clear how much increase will be applied on the tenants whose housing or business lease agreement is renewed this month.Consumer price index up 0.03 percent on this month and Domestic producer price index increased by 0.09 percent. 

for Consumer price index (Tüketici fiyat endeksi "TÜFE"): (2003=100) In June 2019, there has been an increase of 0.03 percent compared to the previous month, 5.01 percent compared to December of the previous year, 15.72% compared to the same month of the previous year and 19.88 percent on the averages of twelve months basis.

for Domestic producer price index (Yurt içi üretici fiyat endeksi "Yİ-ÜFE"): In June 2019, it has increased by 0,09 percent compared to the previous month, 8,09 percent compared to December of the previous year, 25,04 percent compared to the same month of the previous year and 32,81 percent compared to the averages of twelve months.

Accordingly, the properties owners will be allowed to raise the Rental allowance by 19.88 percent.

Example:
Current rental: 1000 TL
Rate of rise: 19.88 %
Rise value: 198 TL
Rent after rise: 1198 TL.

the source: emlakkulisi.com
 

 

Read Also : 

• 10 points you have to read well before singing a property sales contract in Turkey

• Can foreigners buy a property in Turkey ?

• How to buy a property in Turkey in 10 steps ? 

• Turkish citizenship by buying a property .. conditions and documents required 

• Property taxes in Turkey

Read more
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June 19, 2019
250 thousand new housing units by 2023

"We have created resources to finance our projects during the current year worth 16 billion Turkish liras, of which 5 billion were paid during the first five months of the year"

This statement was made by Mr. Ömer Bulut, head of Public Housing Development Administration at the Ministry of Environment and Urban Development of Turkey (TOKI) in an interview with the Anatolia Agency yesterday.
Mr. Bulut added that, through non-profit collective housing projects, we have been able to enable low-income families to own a home.
Commenting on the effective contribution of TOKI to the economy and job creation, Mr. Bulut said: "We have been able to provide resources to finance our projects worth 16 billion Turkish liras this year 2019, of which 5 billion have already been paid during the first five months of the year."
"Constructions is still underway within the scope of the "50 Thousand Social Housing Project", which we are seeking to achieve with the support of our ministry, We will add 140 new construction sites to our existing 287 construction sites, which will save about 120,000 new jobs" said TOKI President.

3.5 million citizens will become homeowners:
Mr. Bulut explained how TOKI was able, within 16 years, by reaching 843,546 new homes and by Providing the possibility of installment for 15-20 years to make 3.5 million citizens as homeowners. He added that the volume of TOKI investments during the last 16 years amounted to 160 billion Turkish lira, and that it will direct its efforts during the coming period to build Public housing.

With regard to the project (the 50 thousand social housing) Bulut explained that the project was put to the public subscription on 5 March last and closed the reception of applications on 19 April, Applicants will be selected by lot, where the draw will continue until the next 21 August.
As of today, we have completed drawing lots of 15 thousand 125 houses in 34 projects. The tender for 10 thousand 271 houses was completed in 18 projects and their construction is about to begin. In 8 projects, 1686 houses entered the tender process.

250 thousand housing units until 2023:
Stating that TOKİ will produce houses in horizontal architectural style in all of its projects as in recent years and that the neighborhood culture will be kept in the forefront, Mr.Bulut stated that "As TOKİ, in residential areas and general city plans, in line with the urbanism criteria of our President, we will produce houses with a horizontal architectural approach that will keep the neighborhood culture alive, bring our citizens together with nature, and keep the family and neighborhood relations alive."

As part of the objectives of the Ministry of administration by 2023 will implement 250 thousand social housing, Mr. bulut said.

Source:
emlakkulisi.com


 

Read Also : 

• 10 points you have to read well before singing a property sales contract in Turkey

• Can foreigners buy a property in Turkey ?

• How to buy a property in Turkey in 10 steps ? 

• Turkish citizenship by buying a property .. conditions and documents required 

• Property taxes in Turkey

Read more
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March 02, 2019
increasing of Turkey real estate sales for foreigners in 2018

Turkish statistics agency revealed new figures relating to the high rate of foreign ownership of real estate in Turkey and the number of properties sold in Turkey during the year 2018.
According to the new statistics released on 16 January 2019 by the Turkish Statistics Agency, the number of properties sold in Turkey during the year 2018: 1,375,398 apartments, with an increase of 2.4 % compared to the same sales in 2017 .

Distribution of Turkey's real estate sales between cities :
Istanbul topped the list of the best-selling Turkish states with 235,055 apartments which is 17 % of the total real estate sales in 2018.
Ankara came second with 131,161 apartments, which is 9.5 % of total sales across Turkey.
The state of Izmir ranked third in the list of best-selling residential apartments, with 75,672 apartments, which is 5.5 % .

The most purchased nationalities in Turkey :
The proportion of foreign ownership of real estate within the sector sales of apartments in the year 2018 increased by 78.4 % , compared with sales in 2017.
According to statistics, the number of apartments sold to foreigners in 2018 is   39,663 apartments.
Iraqis have topped a list of foreigners who bought homes from Turkey. The number of homes sold to Iraqis reached 8,205, followed by Iranians with 3,625 apartments, Saudi Arabia third with 2,718 apartments.
While the Russians dissolved fourth with 2,297 apartments , and the Kuwaiti fifth with 2,199 apartments .

The ranking of the Turkish cities in the ownership of foreigners to the property :
The city of Istanbul was the top Turkish state in the foreign ownership of the property, with 14,270 apartments, followed by Antalya in second place with 7,938 apartments, and the third is Bursa with 2,720, and the capital Ankara fourth with 2,133 apartments.

 

Read Also : 

• 10 points you have to read well before singing a property sales contract in Turkey

• Can foreigners buy a property in Turkey ?

• How to buy a property in Turkey in 10 steps ? 

• Turkish citizenship by buying a property .. conditions and documents required 

• Property taxes in Turkey

Read more
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March 02, 2019
The Turkish Nationality By investing in Real Estate 250.000 $ , instead of 1.000.000 $

The Turkish Official newspaper published , the text of the law amending the terms of granting Turkish nationality to foreigners in exchange for buying property, operation, investment and deposit in Turkish banks.
According to the new law, a foreigner can acquire Turkish nationality if he buys a property  or many properties worth more than $ 250,000, instead of the previous value of $ 1 million, provided that the property is not sold within 3 years.
In another amendment, the requirement to deposit a sum of money in Turkish banks in exchange for citizenship has been amended. The condition stipulates the deposit of $ 500,000 from $ 3 million in the previous law.
Another amendment provided for a reduction in the value of fixed investment in exchange for citizenship, as the capital required for this investment was reduced from $ 2 million to $ 500,000.
In addition, the entrepreneur, who provides employment opportunities for 50 Turkish citizens, has been able to obtain Turkish citizenship, having previously been required to employ 100 citizens.

In case you have any questions about investing in real estate in Turkey to get Turkish citizenship Please contact us.

 

Read Also : 

• 10 points you have to read well before singing a property sales contract in Turkey

• Can foreigners buy a property in Turkey ?

• How to buy a property in Turkey in 10 steps ? 

• Turkish citizenship by buying a property .. conditions and documents required 

• Property taxes in Turkey

Read more

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