If you are thinking of buying an apartment in Turkey, welcome to one of the world’s hottest real estate markets. Since 2018, Turkey has welcomed thousands of foreigners eager to get their foot on the Turkish housing ladder. Investing in areas like Istanbul, Antalya, Bodrum, Bursa, Kusadasi and Fethiye, foreign property buyers are at an all-time high.
As with any property investment, buyers are keen to maximise their capital appreciation, but entering a market where you are unaware of the process and pitfalls is daunting. So, in this article, we will summarise the market, answer popular questions, highlight areas where foreigners are buying, outline the process and give some hints, and tips to making this property investment benefit you.
Buying an Apartment in Turkey: Guide to the Market
In 2018, foreigners purchased 40,000 apartments and villas in Turkey, marking an all-time record-breaking high which resulted in a 78.4% increase year-on-year in sales. Industry experts forecasted then that the trend would continue into 2019 with expected results of 50,000 homes sold, and so far, they are right. In the first half of 2019, foreign house sales jumped by 70% compared to 2018, and in the process generated a staggering 3 billion USD in sales.
Nationalities of Foreigners
The variety of nationalities is staggering, proving the international interest of Turkish property. Iraqis showed a high interest with just over 8000 homes sold, but other nationalities included Iranians, Saudis, Russians, Germans, Brits, and European citizens. So far, in 2019, Russians buying apartments and villas have increased threefold in the Antalya region, which has been a long-time favourite holiday destination for them.
Why Are Foreigners Buying Property in Turkey?
Reasons are plentiful, but a driving force is the lucrative exchange rate. Compared to three years ago, whether buying in USD, Euros, Pounds or other currencies, foreigners just holidaying in Turkey or buying property get more Turkish lira for their money than ever before.
The market also took a significant jump in 2018 when the Turkish government changed regulations and dropped the minimum entry level for citizenship by real estate investment. Thousands of more people suddenly earned the right to live and work in Turkey. Other reasons people buy include low cost of living, a culture over-brimming with hospitality, the lifestyle, an easy buying process, and that irresistible Turkish weather. (Is Turkish property a good investment?)
Residency and Citizenship when Buying a Home
With residency and citizenship being a driving force in the market, it is important to clarify the entry requirements. If your budget is below $400,000, you will apply for Turkish residency if you want to live in Turkey. This involves proving you can financially support yourself, and a separate application process, non-dependent to property purchase. Even if you get a Turkish residency, you will need a separate work visa to enter the workforce. If your budget is above $400,000, apply for citizenship, which grants the same working and living rights as a Turk. Certain developments are government approved and you must keep your real estate investment for at least three years. (Also read: Turkish Citizenship by Investment.)
What is the Buying Process?
The first step is to find an apartment, pay a deposit, and agree on the payment schedule. You will also need a tax number and to open a bank account of which we help our customers to do both. Turkish law doesn’t require using a solicitor but we recommend you do, to draw up a contract and perform certain legal checks and documentation to safeguard investments. We also advise about the required valuation report, introduced in March 2019.
Then upon approval of title deeds application, sign for them and move in. It is that easy, and the process takes 3 weeks. Overall, including solicitors, notary, translator, and taxes, account 5 to 8% for purchasing costs. See a complete breakdown of the process here, but customers of Spot Blue are never alone because we are with them each step of the way.
Advice About Apartment Complex Fees
In Turkey, if a building has less than six apartments, they need not have a management team. However talk to neighbours about the arrangements for cleaning of the communal hallways and payment of shared electricity.
If there are over six apartments, Turkish condominium law says the complex must have a management team to handle the upkeep and maintenance of all communal areas. These vary but include swimming pools, landscaped gardens, gyms, saunas, and security staff.
Once a year, the complex must have a general meeting to discuss current issues, but at any time you can ask to see the financial books or speak to the management team. Each apartment pays a fee towards these communal facilities, and in Turkish it is called apartment aidet. If you or your neighbours do not pay this fee, you can be taken to court. The fee varies from complex to complex and will increase with the yearly rise in cost of living. Remember to factor this cost into expenses.
How Much Do Apartments Cost?
This varies from region to region and the apartment you want to buy. Other factors also affect the price. For example, the higher in a building the apartment is, the more it costs because these are classed as duplexes and have a better view. Ground floor and basement apartments cost the least in a building.
The location within the resort is also important. The nearer a building is to the coastline or town centres, the higher prices per square meter kick in. Prices start at £40,000 in budget resorts like Altinkum and can go up to 1 million pounds for beachside hotel residences in places like Yalikavak, Bodrum. (Also read – How much is property in Turkey?)
What are Beachside Apart Hotel Residences?
In Turkey, beachside hotel residences appear in touristic towns like Bodrum, Antalya and Fethiye. They are apartments with all the social facilities that a hotel would have including reception, concierge, room service, restaurants, bars, shops, gyms, spa and wellness and sports facilities. Think of them as a mini-village that you never have to leave. This apartment markets itself towards the higher end, and if investing in buy-to-let real estate are ideal.
Renting Out Your Turkish Home
Given that Turkey is one of the world’s fastest-growing tourism market, it is no wonder that real estate investors look to it for buy-to-let incomes. If you are thinking about renting out your apartment in Turkey, there are two ways to do it.
The first is to appoint a management team who handle everything from the marketing, bookings, cleaning, welcome packs, and maintenance. The second is to do it yourself. For both methods, if you are looking at short term holiday rentals, which generate a higher income than long-term tenants, you need to adhere to Turkey’s Identification Declaration Law. This states all proprietors must declare who is staying in their property, when and for how long. You will need to enter this information into the official GIYKIMBIL system. The other important aspect to consider is tax payments, which are a legal obligation.
Off-Plan, Key Ready or Resale Homes
Given there are thousands of apartments for sale in Turkey, if the choice overwhelms you, a way to narrow down the search is deciding on whether to buy off-plan, key ready or sale homes. Each sector has its own advantages and disadvantages.
Off-plan homes are on the market at discounted prices but you can’t see them for yourself until completion. If choosing off-plan, ask to see floor plans which also list the space of each room. A big advantage though is that you can make minor alterations to the décor and design so it is like tailor-making your own home.
If choosing a key-ready property to move in straight away, remember to complete the snagging list. Resale apartments present good opportunities but likewise, inspect the home because small bits of damage and repair soon add up. If you choose a resale home, the current owner will need to ensure all debts including council tax are paid up to date before the title deeds will approve applications.
Where to Buy in Turkey
Turkey is the 37th largest country in the world, so there are hundreds of destinations to choose from when buying. Current trends for foreigners show they stay away from the east since these are landlocked areas and are less westernised. Most foreign house sales occur on the Aegean and Mediterranean coasts and Istanbul.
Istanbul: Leading the way as the most popular destination for foreign house buyers in Turkey, Istanbul’s real estate market is undergoing a transformation because of new developments in the outskirt European districts.
Antalya: As the second most popular destination, the Antalya region includes the city centre and smaller coastal resorts like golfing Belek, historical Side, bustling Alanya, and beachy Kemer. Antalya’s cosmopolitan atmosphere attracts buyers from all over the world.
Bodrum: Over on the Aegean coast, the Bodrum peninsula dominates the foreign real estate market, with European buyers. Popular places include Glitzy Yalikavak, upmarket Turkbuku, budget Gumbet and the town centre, a major Turkish Riviera hub.
Fethiye: This firm favourite of British buyers is also an expat stronghold with many foreigners living there all year round. Places within the region to buy an apartment include the city centre, Hisaronu, Ovacik and Calis Beach.
Bursa: This northern destination proves itself to be a favourite of Middle Eastern buyers thanks to the many similarities in culture. It is not as westernised as the Aegean and Mediterranean coasts. Places of interest include the city centre, smaller villages, and Mount Uludag, the country’s number one skiing destination.
Avoiding Pitfalls when Buying
1: Take your time. It is a buyers’ market.
2: Think of it as a long-term investment because the market has lots of properties for sale which are keeping prices down.
3: Always use an independent solicitor and follow their advice.
4: For an estate agent to guide you through buying an apartment in Turkey, contact us via email or telephone and speak to a consultant today. Also browse our listings of flats for sale. Each listing includes information like photos, location, key features or send us your budget and desired place for buying, to receive potential properties via email.
Also of Interest
Regions of Turkey: We look at the seven geographical regions and what makes each one stand out. We also look at which ones are popular for foreign house buyers and why.
Investing in Property Abroad: Tips, and advice on what to do, and look for when buying property overseas. Including legal paperwork and representation, managing finances, and maximising potential capital appreciation.