In the past years, Turkey witnessed an increase in the prices of building materials, accompanied with an increase in the interest rate in Turkey, which led to a semi-stagnation in the real estate market, followed by the Corona crisis that affected the global economy.
The Glovision Real Estate team monitored the changes in the real estate construction market, and many analysts have predicted the importance of the next stage that the real estate market in Turkey will take and witness, as the most important economic analysts stated that the next stage will witness an unprecedented movement in the Turkish real estate market, and real estate prices will increase significantly.
The official Turkish statistics website published data on construction materials costs in Turkey for the year 2021, and this report showed that construction costs in Turkey have increased by nearly 40 percent compared to the previous year of 2020, which was a qualitative leap that was largely expected by everyone.
The Turkish real estate market was witnessing a temporary pause in construction
The rise in the prices of construction materials, which resulted from the increase in the interest rate in 2018 and beyond, in addition to the change in the exchange rate of the Turkish lira at the same time, led to a reconsideration in starting new construction projects, especially for construction companies that owned currency and financing in Turkish lira, it was not appropriate for them to pay more Turkish currency for the same materials that will be needed for their projects.
Another reason that was a fundamental factor was the temporary reluctance of Turks to buy local real estate due to high interest rates, as it is known that most Turks buy real estate in long-term installments.
An increase in the population rate and an inevitable demand for real estate
With the natural growth of the population in Turkey, and with the increase in the proportion of foreigners and foreign investments in Turkey, all of this led to an increase in the demand for real estates to meet the increasing housing needs, and this led to the consumption of the largest amount of real estate stock, especially apartments in Turkey and Istanbul in particular.
The construction companies found an appropriate opportunity to start building new real estate projects, to meet the growing needs of housing.For those who seek housing now they are ready to pay more to get houses and apartments, and that was the main reason for increasing the costs of construction materials due to the sudden demand on these materials.
The decline of the Turkish lira against the dollar is another reason
The reduction in the exchange rate of the Turkish lira against the dollar, which almost touched the edge of 10 Turkish liras for every one dollar, led to an increase in the money spent in Turkish lira for the purchase of building materials, the bulk of which is obtained from abroad and in hard currency.
The construction companies found themselves facing a new reality, which is the increase in the prices of building materials, which means an inevitable increase in the prices of new Turkish real estates by a similar rate equivalent to approximately 40%.
What are the expectations for the next two years?
Glovision team believes through experience and direct contact with many experts in the Turkish real estate market, that construction costs in Turkey will continue to increase slightly until Turkey can achieve stability in the exchange rate of the Turkish lira against hard currencies.
We expect that Turkish real estate prices have increased and will continue to increase until the end of 2022 at least, which means an increase in earnings for everyone who currently owns a real estate in Turkey in general or in Istanbul in particular.
Did I miss the opportunity as an investor in Turkey real estate?
In fact, the Turkish real estate market was and still is desirable because of Turkey's components, location, culture and many other factors that give a unique lifestyle in it, which makes life in Turkey an investment in itself.
In terms of financial gain, our team believes that now is a golden time to start investing in Turkey’s real estate, and later with Turkey’s liberation from some economically troublesome economic agreements with Western countries, which date back to after World War II, in addition to the beginning of the emergence of the Turkish genie at the levels of Economic and commercial, all these factors will increase Turkey's position in the coming years, which will give a new impetus to everything related to investment in Turkey, and of course real estate prices will increase, achieving a real gain for everyone who started investing early.
Do not postpone your real estate investment in Turkey, and do not hesitate to contact the Glovision Real Estate team to learn about the most important opportunities for you.
