If you want a buzzing, cosmopolitan holiday home or even a permanent lifestyle, look no further than Istanbul. This is a city that has been dubbed a style capital with all of the fashion and lifestyle magazines. Its rich culture, heritage and low priced real estate market make it an excellent choice for any investor looking for long term gains or rental income. In 2010, the city will be the European Capital of Culture further increasing tourist numbers, which are already rising.
Growing Tourism
The Turkish government is committed attracting foreign investment right across the country and much has been invested in improving the infrastructure of the one time capital. Efforts have not been in vain and tourist numbers have risen by over 13% - a trend that the World Travel and Tourism Council claim will continue. Upgrades to roads and key airports and low crime rates have not only improved life for the Turkish population as a whole but also made the country more attractive to visitors and investors. The city’s Asian Side is to receive a facelift and by 2012 the Marmaray Project will be compete and will mean that this side of the city has a new metro line, which extends as far as Sabiha Gokcen Airport. This is bound to have a positive impact on the property market here. Naturally, Istanbul has always been a popular destination for tourists, but improvements and the raising of the city’s profile in the fields of business and trade have meant that more wealthy visitors are attracted to the city, some for business, some as part of a company relocation and some for pleasure.The Property Market
The Times listed Istanbul as an attractive investment haven for property buyers looking for relatively short term gains. There are plenty of affordable houses and the apartments in residential areas of the city and many of these areas are close to one or other historical sites. Over the last few years such properties have experienced increases of 20% a year. Most of the properties on offer are newly built or off plan apartments with modern amenities close to local facilities. Obviously, the global financial crisis has taken its toll on property prices worldwide and such increases can not be expected in the short term, however, it does mean that there are more bargains to be had as sellers are happier to negotiate on the price. Some developers are offering flexible payment schemes, longer payment terms and price reductions in the region of 30 to 40% in suburban areas and up to 15% in the centre. In fact city centre property is holding its own against the financial crisis and is still an excellent buy, whereas the suburbs have experienced been affected with districts like Çekmeköy – Ümraniye district has seen a slowing don in the number of purchases and consequently prices have been reduced by around 20% here. The effects of the credit crisis will of course recede and those who entered Istanbul’s lucrative property market now are set to make some attractive profits when buyers return in their droves – and they will. The Turkish government is also going to open up the property market to more foreign buyers- at the moment only those from countries with a reciprocal agreement can buy here. They are also likely to drop the regulations, which forbid any foreign buyers from buying near a site of historic significance. Property Prices and Rental Income
According to the Global Property Guide, high end apartments command average prices of 1,591 Euros a sq m. upon resale. Small apartments in the region of 75 sq m cost an average of around 81,000 Euros to buy and command monthly rents of around 442 Euros, which provides an annual return of 6.55%. Apartments of around 120 sq m cost in the region of 126,200 Euros and yield monthly rents of 550 Euros, whilst larger apartments of around 170 sq m will cost 177,500 Euros to buy and will give an annual return of around 6.33%. There are some very attractive apartment buys in Istanbul for as little as 32,000 Euros for a one bedroom off plan build with shared amenities including a swimming pool and there are quite a few of these off plan developments around in the city at the moment all commanding similar prices all on the European side and some developers are guaranteeing rental yields of 6%. As more people are attracted to life in this city the rental potential is growing particularly amongst young professionals. The Global Property Guide sets gross rental yields in the city at an average of 6.22% and names the districts of Bakırköy, Beyoğlu, Beşiktaş, Kadiköy, Sariyer, and Sisli as being worthy of such yields. Larger apartments of around 275 sq m yield around 6.52%.
