By. Justin Mays
Soaring rents makes it a very good time to own a rental property in Turkey right now. Since July 2020 the 38% rise in national asking rents is the highest on record driven by a multitude of factors.
According to the Middle East Eye, for now the Turkish government has declined to intervene with any new real estate legislation and foresees that the rental inflation rate will decrease towards the end of the year. A leading rental website calculated that over Istanbul’s 50 neighborhoods, rental prices have increased more that 50% in one year. Almost every city in Turkey is experiencing similar trends with an extreme increase in rental prices akin to Istanbul’s numbers. Daily Sabah wrote that “Rents for apartments throughout Turkey have soared an average of 55% over the last year, with increases reported to have reached 100% in some regions.”
Landlords with properties to let are experience increased competition amongst potential tenants due to a 90% decrease in supply of properties creating very favorable terms for owners. Part of the reason why is the rise in cost for construction materials, driving down supply, which have quadrupled due to inflation and decreasing value of the Turkish Lira. During the pandemic, many people moved to places outside of urban areas or students did not return for in person education but are now returning also driving down supply. Additionally last year's governmental low-interest-rate plan led to the sale of 1.5 million houses and now that interest rates have gone back up home sale prices remain high for local buyers.
Demand remains strong with the Turkish real estate market mirroring other global real estate trends and prices rising at the fastest pace since 2005. Prices are not expected to go down making buying an investment property in Istanbul a very good option.
