Why Buying Property in Istanbul is a Good Idea

As real estate agents, we often meet international investors who want to know if buying property in Istanbul is a good idea. With average prices looking better than those of other global cities like Milan and New York, Istanbul is worthy for good returns on investment. The unique culture makes this Turkish city intriguing for potential buyers looking to spread their wings overseas.

However, the city can be overwhelming, from the transportation system to varying property prices, banks, prime locations for investment, and more. So, in this guide, we look at why real estate buyers choose Istanbul over other major cities and European countries, strategic locations that show promising returns for the future, and other common questions that every investor asks.

Why Buying Property in Istanbul is a Good Idea

Why Do Investors Choose Istanbul Over Other Cities in Turkey?

Putting aside the housing market for a moment, it is worth looking at Istanbul overall. One would easily assume that Turkey's capital city, Ankara, is the country's hub. Yet, this only appeals to the political scene. Istanbul is to Turkey, what London is to the UK. Whether foreign investors look at commercial property, houses to live in or enter the business world, they stand better chances, because everything and anything happens here.

Firstly, this attractive destination is an alpha city designated by the Globalization and World Cities research network. This think tank separates cities into alpha, beta, or gamma tiers based on their connections to the world of global business, law, and finance. Istanbul's status as an alpha city puts it in the same ranks as London, New York, Beijing, and Dubai.

Secondly, Istanbul is Turkey's most popular tourist destination. The Hagia Sophia and other iconic landmarks have a certain historical charm that attracts roughly 15 million tourists every year. Add to this the trendy cafes, art galleries, excellent public transport, food variety, fitness centres, shopping and nightlife, and the natural beauty of the Bosphorus, and international buyers have many leisure and lifestyle facilities to tap into.

Thirdly, international investors have more choices because of the mass of infrastructure developments. The wide range of new lifestyle projects on the outskirts gives them more options, both for budget and luxury real estate. The local municipalities' investment in roads, bridges, and transport networks boosts domestic and foreign ownership and connects these districts to the main city centre.

Turkish Citizenship by Investment Program

Another reason most foreign nationals choose to buy apartments in Istanbul, over European cities, is that the location has the highest concentration of government-approved properties for Turkish Citizenship by real estate investment scheme. This scheme, introduced to boost the housing market of Turkey, enables foreign property buyers to gain the right to live, work, and study like Turkish citizens.

The minimum entry-level real estate price of just $400,000 makes it one of the world's most affordable real estate schemes. The citizenship application is quick; all applicants must do is keep the home for at least three years. The bonus is that you don't have to reside in Turkey and can stay dual citizenship. Hence, it makes for wise property investment.

Changes to Rental Property Laws and Airbnb Investments

For foreign buyers who look at buy-to-let properties, it is essential to know about the new laws for short-term rent investments. Like other global cities, Istanbul was an Airbnb hub, thanks to many tourists booking three to four-night stays. The yield and occupancy rent are high, and real estate investors could net excellent rental prices. However, like other countries, it changed the laws at the beginning of the year.

Now, if you want to operate a holiday rental, you must always obtain a licence and display it. Get permission from all neighbours, and face a cap of 100 days a year. For this reason, another option for investors is branded residences like our Sense Reward scheme. In these, everything is managed and services include concierge and hotel facilities. It provides a much more profitable long-term investment with less stress.

What are the Average Prices Per Square Metre?

Using historical data of sold properties, the average price per metre is 1142 Euros, with an average gross yield of 7.9%. The price was roughly static at 600 euros until the beginning of 2022, when the world started to see the after-effects of COVID-19, and the performance of the USD resulted in increased construction costs across the globe. Rising to a peak of 1269 euros in June 2023, the real estate market has gradually steadied and levelled out. Remember, though, Istanbul is Turkey's largest city, with 39 official districts. So, it is worth drilling down to discover prices on a neighbourhood basis.

Most Expensive Place to Buy

This title would go to the Sariyer district, which comes in at roughly 3224 euros per metre. This isn't a surprise, though. Since the Ottoman days, Sariyer has been a stronghold for luxury investment property. Covering 177 square kilometres and a population of roughly 350,000, it flanks the black sea coast from the neighbourhood of Kilyos. Even though it sits on the outskirts, the transport route is via Büyükdere Avenue. There are also ferry services and the M2 Metro line.

The neighbourhood of Istiniye is famous for luxury apartments, while buyers head to Yenikoy or Tarabya for the vast array of luxury villas. Buyukdere neighbourhood has risen in fame with upmarket prospective buyers. Development in Zekeriyaköy puts that area on the property market for high-end living, and Sariyer includes a part of the Belgrad forest, a treasured green area.

Most Affordable Place to Find Properties for Sale

Meanwhile, if we go to the other end of the spectrum, Esenyurt comes in with excellent purchase prices of 546 euros per square metre. Residential properties here sit near the E5 and TEM highways, making them popular with commuters and families who want easy access to the city centre but to be away from the hustle and bustle.

Property types tend to focus on apartment living, and are near other significant amenities, like two of Istanbul's largest shopping malls. Mass development for property ownership hasn't turned the area into a concrete jungle, though, because the local council has built four parks, and the area sits between Kucukcekmece and Buyukcekmece Lake.

Where to Find Off-Plan Properties

When looking at real estate options, modern sold-off apartments are another excellent choice. The real estate sector is heavily guaranteed, with many constructions covered by insurance in the event of non-competition. Developers offer 0% interest-free long-term payment plans as well as discounts for cash payments. Established, central locations like Beyoglu, Besiktas, and Sisli have minimal land for building. Instead, look at Arnavutkoy near the new Istanbul airport, Beylikduzu, and Basaksehir.

Should You Buy in Asian or European Istanbul?

There is purely a personal choice. Over the years, public transportation networks have decreased the travelling time between the two, and spending one day on two continents is now the norm for Istanbul locals. Regarding historical sites for tourism and the vibrant culture, most people choose European Istanbul for a property purchase. However, the Asian side does offer affordable properties if you head away from lively districts like Kadikoy and Uskudar into developing neighbourhoods. The city centre is Beyoglu district, on the European side, but good ferry networks easily connect you.

Need to Know - The Yali Mansions of Istanbul

When you look at the range of properties, there are many historic buildings. These range from the art nouveau architecture in Beyoglu to the old Ottoman houses in many Bosphorus neighbourhoods. Their status immediately makes them prime real estate. However, the creme de la creme of the Turkish market is the old Yali mansions that line both sides of the Bosphorus shores.

Built by Ottoman elite circles, there is no minimum investment for these homes, which always appear on the market as POA or POD and, in some cases, only in elite social circles. To give you an idea of the type of buyer, think of Saudi princes. The property values of these homes are nothing less than six digits, and owners are restricted from renovation and upgrades due to their historical status.

What is the Potential for Capital Appreciation?

Naturally, every foreign investor wants to know the predicted capital appreciation. Using information from the central Turkish bank and the World Bank, Istanbul is expected to gain 67% over the next six years. The market is good for short-term investments, and buyers don't have to pay capital gains taxes if they keep the home for at least five years.

What are the Property Taxes and Extra Costs to Pay?

For every real estate sale, factor in roughly 6 to 10% of the purchase price. 4% will go to stamp duty. You will need to pay the lawyer, translator, notary, and land registry fees. Agency fees typically factor in at 3%, but some off-plan constructions carry a 0% fee. If you decide to buy a home through us, we give a comprehensive guide to the extra costs, taxes, and payment plan completion dates. There is an annual property tax to pay, but the amount varies depending on your home's square metre and the number of people on the title deeds.

How to Buy Property in Istanbul

Start your property search for commercial and residential projects for sale here. Each listing includes villas and apartments for sale in all major areas, such as the historic heart, outskirt districts, and business districts. Also, contact us to arrange viewing trips around the city. Perhaps you would like to invest in the financial district, learn more about the public transport connections and modern infrastructure, or see construction projects and learn more about building regulations.

Once you find a listing that sparks your interest, we step in as a buying agent to help with the transaction process. Some people employ lawyers for legal advice, and we can work with them to ensure they have all the relevant paperwork to do their due diligence. Otherwise, we sort out the application process for the title deeds, and help you open a Turkish bank account and obtain a tax number. Overall, you can expect your title deeds in as little as one week if everything is in place, and that is another reason why this is an excellent destination for investors.

Save Time and Money with Our Services

Our foreign investment services can save you time and money. We also offer professional advice as property agents to help you navigate the market of this foreign country and stay within legal requirements. Just use the contact details to find out more via email, arrange viewings or chat more with an agent about whether buying property in Istanbul is a good idea.