The phenomenon of rising rents is particularly notable in Turkey's major cities. In Istanbul, rent soared by 91%, Izmir along the Aegean coast experienced a 131% increase, and the capital Ankara recorded an astounding 178% surge.
Specifically, in Istanbul, the average rent for a 100-square-meter residence has reached 17,111 Turkish lira (approximately $594). This means that an employee earning the minimum wage of 11,402 lira can only afford to pay 67% of their salary towards rent. In Ankara and Izmir, this ratio is 82% and 75%, respectively.
Despite a 8.7% decrease in home sales in October, Turkey's average property prices have grown by 103% over the past year.
Property prices in Istanbul surged by 89.6%, while prices in Ankara and Izmir increased by 121.1% and 98%, respectively. Similarly, the property prices in the southern tourist destination Antalya rose by 91%, in the southeastern province Adana by 74.7%, in the Aegean coastal city Mugla by 110%, and in the northern province Trabzon by 99.3%.
The fundamental reason for the surge in property prices in Turkey is the strong demand for real estate. With a population of approximately 84 million, primarily composed of young adults around the age of 33, property ownership is a necessity for this large demographic group.
Therefore, the domestic market in Turkey is highly active. Recent data shows that in May, Turkey's home sales reached nearly 113,000 units, representing a 32% month-on-month increase.
In addition to robust domestic demand, overseas investors also view Turkey favorably. They are attracted to Turkey's unique geographical location and robust economic development. Turkey ranks second in economic growth among OECD countries. Tourism is one of Turkey's pillar industries, and import-export trade is also crucial.
The chairman of the Real Estate Overseas Promotion Association stated that Turkey will bring in a demand for property purchases worth $1.5 billion. Istanbul, due to its higher property appreciation potential compared to cities like Paris, is highly favored by overseas investors.
However, due to strong demands from the opposition party during the election to halt Turkey's citizenship-by-investment program, it is currently uncertain whether the Erdogan government, even though the elections have concluded, will adjust the investment amount or increase the threshold for property purchases (rumored to increase from $400,000 to $600,000).
