Is it Profitable to Buy a House in Turkey?

  • 12 months ago
  • 1

When it comes to buying a house as an investment, the first obvious reason is its profitability. Our customers usually ask us whether it is profitable to buy a house in Turkey. Based on our experience, we can easily answer that question with a “Yes!”. However, let numbers do the talking instead! Firstly, we have to look at official OECD figures to confirm our case.

OECD Real Estate Data

Real estate investments in Turkey steadily provided high returns. This started in 2004 after property sales to foreigners in Turkey officially began. As of 2021 Q2, Turkish real estate market was by far the best market with highest returns per OECD data. Likewise, real estate prices have risen almost double by %104 since 2015 as you can see from the table below. Turkish real estate market was well ahead of Hungary and Iceland by big margins which ranked 2nd and 3rd. Similarly, OECD data proves that Turkish rent prices increased at the fastest pace in the world by 70% since 2015. Therefore, it is easy to conclude that Turkish housing sector is a clear world leader in profitability. However, nominal profitability only shows the difference between total buying costs and nominal market prices. Capital gains and rental revenues together make Turkish real estate market the most profitable per OECD data in nominal terms.

Take all factors into consideration

We must inform you at this point, however, that the capital gains are in nominal terms. And inflation will erode the net profit you may gain. You must also keep a close watch on currency rates to translate your net returns. Turkish currency TL has experienced steady devaluations over the last years. Therefore, real profits can only be calculated by the real change in currency exchange rates. We suggest you have the financial wisdom to follow not only housing prices but also fluctuating exchange rates. Thus, you truly have high chances to make good profits even in the short term.

IMF Data

IMF data below shows that annual the real house price increases in Turkey beats the rest of the world as of 2020-Q3. This means Turkish property investment returned 13% real profit in just one year. Apparently, IMF data confirms our suggestion that buying a house in Turkey is a profitable business. Below you can see the graph for comparison:

IMF House Prices
IMF House Prices in 2020

You can calculate your total profit by adding your rent revenue and capital gains. Consequently, return on property investment in Turkey is high enough to conclude that buying a house in Turkey is profitable. Turkish real estate market has been vibrant for decades. Hence, you can count on profitability over the long run.

You can easily come to Turkey, make some friends and ask them about property investment. They will genuinely tell you that nobody loses from real estate investment. The clear perception of Turkish people about real estate market is that it always beats other investments. Therefore, the most reliable form of investment for Turkish people is usually property investment to preserve wealth in Turkey.

Turkish Statistics Institute Data

Turkish real estate market is vibrant and it is usually easy to resell your house anytime you like. Vibrancy of Turkish estate market is confirmed by Turkish Statistics Institute data. Per Institute, only a third of the total property sales were newly constructed properties as of January 2021. On the other hand, approximately two thirds of every sale were older properties in second hand-market. This finding is also in line with long-term property sales trends. Therefore, official numbers confirm vibrant market dynamics and strong demand. As a result, you do not have to worry about reselling your house.

As mentioned before, Turkish Statistical Institute recently published the most recent official figures about this topic. We analyzed these figures for your convenience. After the analysis, we published an article about the increasing number of housing sales to foreigners. To find out more, you can read our article: Turkish Real Estate Sales To Foreigners Are At An All-Time High!

Below you can see OECD data on housing prices showing Turkish Real Estate market as the leader.

OECD Data on Housing Prices
OECD Data on Housing Prices

Capital Gains + Rent Revenue Together Can Make Your Investment Worthwhile

Lastly, we would like to bring up a research conducted by a Turkish newspaper as of April 2021. This research revealed that, among common investment options, 10-year investment in USD proved most profitable at %537 return. Real estate investment ranked second over a 10-year period. Accordingly, 10-year real estate investment profitability was calculated at %325+rent revenue in Turkey as of April 2021. Based on this finding, addition of rent revenue makes real estate market the most reliable and profitable long-term Turkish investment option.

We believe official data and all the other relevant data strongly indicate one simple fact. Real estate investment in Turkey is one of the best ways to protect your savings against time. Moreover, financial wisdom and professional help from your trusted realtor will help you make better investment decisions.

Would you like to discuss more about the best locations to invest in a Turkish real estate? Feel free to ask for an initial consulting session. We can arrange this session in person or online via WhatsAppe-mail or you can send us a message through our website.

For more information, feel free to contact Us!

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