Istanbul is the heart of the Turkish economy and the country’s largest metropolis. Most foreign investors are beginning to be interested in investing in Turkey from Istanbul. For this reason, the offices and representative offices of the largest Turkish and global corporations are concentrated here. At the same time, although the city is ancient, it is very lively, dynamic, it continues to develop rapidly, grow – both in area and in height. The place of old decrepit buildings is occupied by stylish skyscrapers and luxury housing.
All this promises the investor many new opportunities, but retains a number of risks that only a specialist who is well versed in local economic trends and trends and has many years of experience in Istanbul will help to circumvent. Today I will briefly talk about the districts of the city so that you understand where the greatest investment prospects are hidden.
Sharing Istanbul Together
Istanbul is divided in different ways. First, there is the province of Istanbul, which includes the city of the same name. There is an administrative division into 39 districts. The city is also divided into European and Asian parts, separated by the Bosphorus – in the European part there are 25 districts and another 19 in the Asian. Also, the quarters are divided into coastlines and according to the degree of remoteness from the city center.
There are many criteria, but I will specifically focus on the key ones when I talk about specific districts and neighborhoods. However, to begin with, I will note that my family and I have lived in the European side of Istanbul for more than 10 years. Not because it is better than Asian, but because it is more dynamic and active from a business point of view. In addition, in terms of comfort, it is approaching the EU countries, especially in new areas.
Despite the fact that in recent years my husband and I have moved to a more southern Antalya, we do not intend to break off our long-term connection with Istanbul. We continue to keep our finger on the pulse and track all changes. So, over the years of living in Istanbul, I not only saw, but felt the changes in the real estate market, watched how the social and business infrastructure developed, how housing prices rose and how, in parallel, quality standards in construction grew.
For example, I can tell you right away that the historic center of the city is at its peak – both in terms of demand and in terms of prices. Real estate there is unlikely to grow rapidly, but it will not become cheaper, unless there is some kind of global financial cataclysm that will bring down the entire Turkish economy (God forbid). Otherwise, the cost of housing here will remain stable. Moreover, it will be stable not only in the Turkish lira, but also in the dollar or euro, because the devaluation of the lira is also included in the prices of luxury housing.
But the most dynamic now are those areas that are adjacent to the center and are being reconstructed by the authorities, as well as on the outskirts of the city, where the authorities are building a new Istanbul Canal, designed to become an alternative to the Bosphorus and Dardanelles straits. The business activity of the city is gradually moving there, which promises good prospects for the growth of real estate prices. But first things first.
City Center: Stability and Elitism
Real estate in the city center will be interesting not for increasing your capital, but for stabilizing it. These are expensive, but the most stable assets, for which there will always be demand. They will be most interesting to a large investor who wants not so much to earn as to save capital.
Such an investor should pay attention to Sisli, Besiktas, Sarier, Beyoglu, Bakirkoy and others, which are adjacent to the historical center – Levent, Maslak districts. Housing located in the area between the two bridges over the Bosphorus, which connect Europe with Asia, is especially appreciated. The epicenter of all business activity in Turkey is concentrated there.
There, the price for 1 sq. m. of new housing costs from 12 thousand dollars. In the old fund – from 8 thousand dollars. The cost of housing is more influenced by the price of land, which is very high in the historic center of the city. These locations are already fully formed and will not grow rapidly. But they will not fall in price either. And if you invest in such luxury housing, you can be sure that your funds will be 100% saved. Unless, of course, no one deceived you and you did not overpay – to avoid this, you need to seek the advice of a specialist.
However, they are adjacent to the old districts, which are undergoing renovation under the renovation program. This means that old houses – entire neighborhoods, over 30 years old, are being demolished. A new housing stock is being built in their place. And just these new houses should be very interesting in terms of profitability. We expect that the profitability of some objects here may be at the level of 100% when resold. Rent here will also be high. For example, a one-room apartment with an area of 40-50 square meters can be rented for 4-5 thousand lira per month – this is a good price.
New districts of Istanbul: dynamics and profitability
New districts on the outskirts of the European part of Istanbul are developing most dynamically. These are Beylikdüzü (it is not the newest, but it is actively growing and there is still potential for growth for the next 5 years), Büyükçekmece, Küçükçekmece, Bahçeşehir, Basakşehir, Silivri (it is starting to grow slowly). But this is still the outskirts of the city, quite far from the center – this must be taken into account when buying.
The authorities are actively developing these areas, building new housing and reconstructing the old one under the renovation program, because a national project is being built nearby – the very Istanbul Canal, which will become an alternative to the Bosphorus and the Dardanelles. Traffic flows will be redirected to it, and the canal itself will pass just beyond the Beylikdüzü district. The new canal will significantly relieve the current transport corridors, and they intend to direct the profit received from this, among other things, to the arrangement of the adjacent part of the city, where new quarters with office buildings and comfortable housing are being built.
Why not Esenyurt or Esenler then? These areas have never been particularly appreciated in the domestic market, because In terms of housing, they are below average. In addition, they are not very actively developing in terms of urban infrastructure, and this is very important.
The fact is that the cost of housing, in addition to the area, is determined by three key factors: Geographic Location (climate, proximity to the sea and the city center, etc.), Quality of construction and aboutCommercial materials (ranging from economy to luxury), as well as the surrounding Urban infrastructure (roads, schools, clinics, shopping and entertainment centers, etc.). According to all these indicators, Esenyurt and Esenler are much inferior to the locations listed earlier.
When buying a home, it is very important to understand whether there is a plan for 3-5 years for the arrangement of this area from the municipality – if it is not, then it is better to choose another object. For this reason, I would choose Başikşehir and Beylikdüzü districts for myself. I see them as the most promising, because they border on the central regions, are relatively close to the sea, and have the best dynamics of development and ennobling. In addition, they are popular in the domestic market, which means that the demand for them will be stable and will not depend on the international situation.
Tips for investors
I will briefly tell you why I choseBasaksehir and Beylikdüzü. These indicators, I’m sure, will help you too.
The first and main indicator for an external investor is the mood in the domestic market. If an object is built specifically for foreign capital, then it may turn out to be a “bubble” that can “burst” in the event of any adverse global events, such as a financial crisis. My experience shows that if a project has more than 70% of foreign capital and it is not in demand in the domestic market, but grows solely through marketing and advertising, then it means that it is not recommended to invest in it.
The second factor is what I have already written about above – the plans of the mayor’s office for the development of the district. If there is such a plan, then housing will grow in price, and if there is no plan, or ennobling occurs very pointwise, then it will have little effect on the price of real estate. The infrastructure around the residential complex can add up to 50% to the original price.
The third is the condition of housing. Housing for renovation is considered the most promising from the point of view of investment. That is, an old house that is planned for demolition in order to build a new modern residential complex in its place. But there are many nuances that make such an investment risky – if you do not know the peculiarities of the local market. I know these features, so I advise you to invest in housing at the stage of excavation, when the old house has already been demolished and you will definitely be able to predict the fate of your investments.
If you follow these three tips, you can get a return on investment in real estate in the region of 60-90%, and with a return on investment in 1-1.5 years, and not in decades. The term of the transaction is an important factor that reduces the risks of devaluation of the Turkish currency. The nuance is that a yield of 60-90% can be obtained in Turkish lira, but it sags by an average of 10% per year. In the worst years – 20% each. This trend towards devaluation is observed in all countries without exception. The less time the transaction takes, the less you will lose on devaluation.
Thus, if you follow my advice, then in dollars or euros, the return on investment in real estate can be not 60-90%, but about 40-50%, which is also a lot. As you can see, I am as frank as possible with you – honesty and openness are the key to high ratings and a good reputation of the Expert Property agency, which we have been maintaining for 20 years on the market.
If you are interested in the topic, and you want to learn not just about the districts of Istanbul, but about specific most profitable objects, then immediately contact me! Because great deals are sorted out very quickly – hurry up to buy them before you get ahead of you!
Yours Tatiana Güneş