Istanbul property prices taking off

Photo: Martin_Hartland

Turkey faced significant economic headwinds in the first 2 months of 2014, which caused property price growth to moderate, but values jumped more than 1 per cent in April, according to Gyoder, more than twice the rate recorded in April 2013.

Istanbul is the bright spot in Turkey's property market, notching up the highest annual increase in property prices at up to 18.59 per centin 2013 compared to Antalya at 5.85 per cent.

Adil Yaman, Investment Director of the agency, predicts the city's market will grow "faster than ever this year", as demand from foreign investors and locals remains strong in most areas.

"We would normally expect fluctuations in growth in the early part of the year," he adds, "which are traditionally times when the market takes a breather.”

Indeed, the firm says the buying season normally reaches a peak in August with strong growth also seen in June and July. In August 2013, Istanbul real estate values increased by more than 2 per cent in a month, the equivalent of £1,000 added to the worth of a £50,000 apartment.

"The health of the property market is important to Turkey's economy as it is in other countries because it provides jobs in construction and helps provide a platform for growth in other areas of the national economy," comments Monica Anca, Director of Universal 21.

"Istanbul is an engine for growth in Turkey, much as London is in the United Kingdom. The city has seen huge investment in its infrastructure, which hasn't always been popular with locals but the pace of Change in the city is rapid and the population is rising with it."

Indeed, work has just begun on a third airport in the city, which will provide a boost to suburban areas like Beylikduzu.

Istanbul's growing popularity in the Middle East together with its increasing status as a commercial hub has already seen a steep rise in new direct flights from the Gulf States in the past 18 months, notes property agency Spot Blue International Property.

“Rewind just five years and flights between Istanbul and the Gulf nations were minimal,” explains Julian Walker, director at Spot Blue International Property. “However, as Istanbul has become more attractive to foreign investors, businesses and tourists, air routes there have mushroomed, pioneered in large part by national carrier Turkish Airlines... The knock-on effects for Istanbul's real estate market can only be positive."

With infrastructure work continuing, though, pressure is being placed on existing housing stock, helping to drive up property values.

The price of new homes in Istanbul has risen by more than 1 per cent a month on average since 2013. Universal 21 forecasts that the city is on course to again reach double figures by the end of 2014.

Anca adds: "I think all the signs are positive for another year of strong growth."