Turkey experienced unprecedented increases in housing costs in 2022. Making forecasts for 2024, some experts expected lower prices, because the increased demand could not hold out for so long.
However, Turkey continues to top the world’s real estate price growth ratings. Some developers have told us what to expect from the real estate market next year.
Turk.Estate has collected up-to-date analytics to show how and why the cost of real estate in Turkey will change in 2024.
The results of the outgoing year
Turkey continues to take the lead in rising property prices in various ratings. For example, a well-known real estate portal analyzed value increases in 62 popular countries around the world. In the second quarter of 2024, inflation-adjusted housing prices rose by 41.70%. Other countries lag far behind in this indicator.
North Macedonia ranks second with an increase of 18.32%. The third is Dubai, where housing prices rose by 14.56%. The next are Puerto Rico (+12.88%) and Georgia (+12.46%). In Spain, real estate costs rose by 5.63%, in Thailand – by 3.1%. Studies have shown that inflation-adjusted housing prices have increased in only 20 of 62 countries.
On the contrary, real estate has fallen in value in some European countries. Sweden (-20.17%), Latvia (-15.15%), Germany (-14.48%) and France (-4.42%) were among the outsiders.
Prices have risen the most in major cities, such as Ankara, Istanbul, and Izmir, over the past year. The average housing price in Turkey has exceeded the previous threshold significantly. This figure has increased to 3 million TL ($106,800) in large cities.
However, there is information that the Turkish authorities are going to increase the minimum cost of real estate to receive Turkish citizenship from $400,000 to $600,000 in 2024. Since October 16, the Turkish authorities have increased the minimum cost of real estate for those wishing to obtain a residence permit in the country to own it to $200,000 instead of the previous $50,000 in small towns and $75,000 in megacities. Stay tuned for further information.
The situation in the Turkish market
Real estate sales have been declining in recent months. It would seem that the price should also decrease following a drop in demand. However, everything is not all that simple, and only the developers can explain the situation.
The president of the Istanbul Association of Builders (INDER), Nazmi Durbakayim, said that the construction market in Turkey has entered an unprecedented period.
“There is not such a high demand in the construction sector. A lot of companies have left the market. If production was high and demand was declining, prices were falling. However, there is no production. I do not expect prices to decrease, because construction costs have not fallen, the growth keeps on going up. Companies used to manage the situation could lower the price a bit. Nowadays, companies have adjusted their positions based on costs, and they have started to rise,” Nazmi Durbakaiym told reporters.
Developers stress that housing costs will not fall without cheaper land.
Forecasts for 2024
Experts expect real estate prices in Turkey to continue rising. There are several reasons for this:
Construction costs rise
Construction production costs rose to 150% in 2021. This was due to the effects of the pandemic and currency appreciation. The military conflict in Ukraine caused a global commodity crisis in 2022, which led to an increase in construction costs by more than 170%. In 2024, rebar prices increased by 41%, concrete – by 134%, and cement – by 147%.
Labor costs have also increased. The Turkish president raised the minimum wage by 34% in June of this year. The minimum wage has risen by 169% over the past year and a half. Accordingly, the salaries of specialists have increased: from designers and engineers to workers and drivers.
The pace of construction has been decreasing since last year. The number of licenses issued in 2022 has roughly halved since 2021. This means that the number of new buildings will decrease significantly in 2024-2024.
At the same time, some developers have left the market, because the costs for building materials have risen and the exchange rate has increased this year. Some companies have become contractors on state-owned construction sites. They had to restore housing in southeastern Turkey, where an earthquake struck in February. Other developers have sent their forces abroad – to European countries where they can earn more.
Rising land prices
There are fewer and fewer free areas for development in large cities and popular resorts. According to the market laws, owners raise land prices.
Ankara became the province with the highest rise in land prices. Over the past year, the cost of land for construction in Ankara has grown by 92%. Ankara is followed by Antalya, where the annual change in land value has increased by 80%. The third place is shared by Bursa and Izmir, where the growth was 74%.
Residential property costs in Turkey will continue to rise in 2024. Investing in Turkish housing is still a beneficial tool.
General economic environment
The global economic crisis has affected all countries. However, real estate remains one of the world’s most reliable investment tools. If a person has their place, this is always a big plus. The money invested in it does not devalue, and the property can always be sold if necessary. This means that the value of housing is growing. Moreover, there are a lot of positive changes in the country like Turkey, which is steadily developing, despite everything.
These factors are the main ones – they make it clear that housing prices in the country keep on going up. But there is a silver lining. Buying a property in Turkey will be an excellent investment and a reliable guarantee of your future.
Buying the most lucrative housing option with an expert
Turk.Estate is the leading real estate aggregator in Turkey. You can check with its experts, who will pick up the most lucrative option in the country. Moreover, if you go to the official website, you will find a great variety of properties directly from local development companies and agencies. They are always open to every customer and invite you to take a real estate trip across the country to find the best one at the most competitive price.