Istanbul: The Success Of Real Estate Investment
Why Istanbul for Real Estate?
Istanbul, with its 16 million population is almost its own country in the 80 million population of Turkey. Through the roots on two different continents, Istanbul is home to many districts that are not just historically and culturally, but naturally beautiful districts.
Dating back to the ancient world, Istanbul was the capital of the Roman Empire as well as the Byzantine Empire. Even though it was also the capital of the Ottoman Empire, after the Republic of Turkey was established, the capital moved to Ankara. Istanbul is a unique city known for being home to many historic landscapes and being located in both Europe and Asia continents.
Istanbul continues to rise in the real estate sector as the economy grows stronger day by day. The construction sector is the engine of the Turkish economy. The more projects are supported, the bigger the contribution to the economy of the country. This will allow more KDV to be reflected in the prices of the discounted materials last year, which means that the real estate prices will be going down. No one should miss this opportunity. Along with the incentives, the figures in the residential sales will be going upwards.
In fact, the Turkish Government has released the lowest interest rate on Federal Loans back in June, and it created a record high rush on property exchanges in the country. The mortgage loan packages introduced by the federal banks in Turkey at historically low-interest rates have brought along a record surge in housing loans, which saw an increase of around nearly $613 million. Brand-new homes will have up to 15 years of payment on mortgages, with interest rates as low as 0.64% and can have a no-payment period of 1 year. Meanwhile, the low equity-down payment rate starting at 10% will be applied for the use of financing. Turkey’s three largest federal lenders revealed four new credit packages in June to energize the transition to post-coronavirus normality and revive the economy.
New buildings are being constructed and old ones are being renovated or being modified for educational needs and purposes. While the construction is on the go, the buildings are being hired by Educational firms which also contributes to the real estate business. The firms that can show the contracts are granted for the financial support by banks or other leasing institutions.
The Real Estate Prices are Expected to Rise During Post-Coronavirus Normalizations
According to the Banking Regulation and Supervision Agency (BDDK) data, the banks' loan amount extended by 4 billion USD between May 29 and June 12, reaching over 291 Billion USD. To ensure that a large number of buyers can benefit from this opportunity, the amount of financing that can be provided per customer will be limited, and financing up to approximately $110,000 USD will be available for residences in three largest cities, Istanbul, Ankara and Izmir, while a maximum of 80 thousand USD will be put in place for other cities.
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The government supported Turkish banks, Ziraat Bank, Halkbank, and Vakif Bank's investments include mortgages for brand-new properties, loans for vehicle purchases, locally manufactured goods, and holiday expenses at annual interest rates running below inflation. An average increase of 125 million USD in housing loans was recorded in the week between June 5-12.
While housing loans increased by a record amount of 612.15 million USD in the first week of June, federal banks provided 539.27 million USD of this growth. In just the first two weeks of June, there was an increase of 714.23 million USD in housing loans. Public banks lead the payment with 597.62 million USD.
Mortgaged house sales recorded a 23.9% increase at 18,483 – a 36.3% share of all sales over the same period. By the end of the month, Home sales were covering 50% in Turkey after the new mortgage loan packages were introduced. The sales are expected to rise significantly beyond the month, thanks to these federal mortgage loan packages. In fact, the real estate sector will likely make as many sales by the next season as in a year if banks continue to offer low-interest mortgage loans.
Real Estate Market is a High Rolling Market
The process of buying a property is not easy and it comes with all sorts of problems. A mistake made in any of these steps could lead to much bigger problems in the long run. Another problem may occur due to the property itself. It may sound good and you may not see any problems with the property itself, however, there could be things the owner is hiding from you that you will only realize after buying the property.
Therefore, be careful with each step you take and always be suspicious of the offers that are too good to be true. It is better to stay on the safe side. Try not to go for a bad agency just because it is cheap, or do not go with a translator who is not a professional in the field due to the prices. Make sure to choose trustworthy agents and professional lawyers and translators who will make everything much easier for you. As Istanbul Investments, we have a portfolio of decades of helping foreigners on their process to buy real estate in Istanbul.
