Istanbul The Turkish economy is suffering from the spread of the novel corona virus. The lira has clearly lost value, the industry lacks orders and the hoteliers have no guests. However, one market is experiencing an unexpected upswing: the real estate market.
The demand for single-family homes has increased noticeably since the pandemic began, brokers and search engine operators report in unison. “When analyzing apartment types, it is very clear that interest in single-family houses is increasing,” said Görkem Ögüt, managing director of the property portal Endeksa.
Landlords in Turkey are also suffering from measures to contain the pandemic. Business owners cannot pay their rents, as can some apartment owners. But even in crisis-plagued Turkey, many people still have money on the edge – and are now considering exactly where they want to invest it.
According to the Turkish statistics office Tüik, the total sales rose in the first quarter by 33 percent to 341,038 units. For the Turkish economy as a whole, which is suffering from the Covid 19 pandemic, this is only a small ray of hope. In the long term, however, the behavior of Turkish home buyers shows a possible trend: property is valued more in times of crisis.
According to surveys conducted by the Endeksa portal, prices rise with demand. For detached houses with a garden, sales prices have climbed by 25 percent in recent weeks. A trend that could persist beyond the duration of the pandemic.
With demand, prices rise
This already shows in Turkey what the real estate industry in Germany has been divided about so far: Experts disagree as to whether the corona crisis is choking off the longstanding boom in the housing market or whether prices will continue to rise. The number of advertisements in Germany has recently decreased – with prices remaining stable.
Like the German government, the Turkish government had partly imposed severe exit restrictions on the pandemic. For example, since April people under the age of 20 or older than 65 have not been allowed to leave their homes. There have been curfews on past weekends, even over long weekends with public holidays. Relief is planned from June.
The idea of being trapped by a virus in your own four walls has apparently affected citizens’ awareness. For years the Turkish housing market had followed the motto: more high-rise buildings, smaller apartments. The worldwide spread of Covid-19 is causing an evolution of this development.
Real estate agent Evrim Kirmizitas explains that it is mainly those who lived in the center, in small apartments or large building complexes, who are now looking for property outside the centers. It too has seen a noticeable increase in demand for detached single-family homes since the end of March. People wanted to get some fresh air and stretch their legs at least a little, she suspects. “This is impossible for people who live in small apartments.”
Endeksa boss Ögüt explains that the prices for single-family houses have risen by an average of 18 percent since March 10, and even a quarter for detached houses. Purchase prices for real estate of all kinds, including condominiums, rose by 11 percent compared to significantly lower average values since the beginning of the year. The rents would have only increased by an average of six percent. According to the calculations, a square meter of land in Istanbul now costs up to 7,000 Turkish lira, currently the equivalent of over 900 euros. In the provinces, too, between Istanbul and Ankara, brokers report rising property prices of up to 20 percent.
Foreigners buy online
“We have observed that the demand for living space has shifted from the big cities to the other regions,” says Ögüt. Demand is increasing, especially in resorts on the coast. The market cannot meet this demand yet, which is why he suspects prices will continue to rise for the time being.
The past few years have been years of crisis for the Turkish economy. The lira slipped several times. Diplomatic disputes caused job losses and fewer holiday guests, at least from Europe. This has often affected the real estate sector. During a month-long phase of terrorist attacks and after an attempted coup in 2016, it was mainly foreigners who had given up their holiday homes and apartments. Prices, especially in coastal areas in the south of the country, had fallen by 50 percent in some cases.
This time, too, foreign interested parties are significantly involved in the development, but this time it is going up. Even contact blocks don’t seem to stop them. Foreigners bought 13.8 percent more real estate in the first quarter than in the same period last year. As a result, the Turkish housing market has become more popular with foreigners. Relief from the government in Ankara, which has made it possible to buy houses for non-Turkish citizens since 2011, has also contributed to this. In March alone, according to statistics, non-Turkish citizens bought 120 properties worth a total of 100 million lira, the equivalent of around 13 million euros, and that completely because of the contact blocks online.
Antalya Homes, a leading real estate broker in the south of Turkey, can confirm the trend. In April alone, the Teleproperty app sold twelve properties with a total value of over one million US dollars. The buyers came in particular from Germany, Great Britain and Sweden, explains CEO Bayram Tekce.
The visit took place via the app, otherwise everything remained the same. Questions were answered during the virtual tour, Tekce explains. When the interested parties decided, the house brokers negotiated with the sellers and then submitted a price offer by email. The purchase process is handled similarly. “We sent the necessary documents online and by letter to the buyers,” explains Tekce.
A harbinger of a trend
Faruk Akbal from the Turkish Association for the Marketing of Real Estate Abroad (Gigder) therefore believes that the Turkish real estate market can withstand the changing economic conditions in the country. With the spread of the pandemic, the brokers had quickly started offering tours online, for example using so-called virtual reality glasses, but also using special video programs such as Facetime, Zoom, WhatsApp or Skype.
Akbal sees the beginning of a new trend here: buying a house online. He therefore demands that the state remove the bureaucratic hurdles for buying a house, especially if the potential buyers live abroad and the property cannot be handed over personally at the office. In his opinion, the surge in demand during the heyday of the Covid 19 pandemic is merely the “harbinger of how the market will develop”.
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