Everything You Need to Know About Buying Real Estate in Istanbul
Istanbul is Turkey's most famous metropolis and serves as the country's political, social, and economic center. Real estate in Istanbul is in high demand among both local residents and foreigners. Over the last 13 years, more than 40,000 residential and commercial properties have been purchased by foreigners in this intercontinental city.
This fact alone speaks volumes: investing in Istanbul's real estate is advantageous. However, it's crucial to approach property purchase in this vast city wisely.
Restrictions on Foreigners Buying Real Estate
Foreigners cannot acquire real estate in strategically important zones. Land plots larger than 30 hectares cannot be purchased.
Taxes for Real Estate Purchase in Istanbul
1. One-time tax: 4% of the cadastral value of the property. This is paid once when the sales contract is signed.
2. Annual tax: 0.2% for residential property, 0.4% for commercial property, based on the cadastral value of the property. This tax can be paid all at once or in two installments every six months. The tax rates are the same for both local residents and foreigners.
Residence Permit
Foreigners who purchase property in Istanbul, as well as other Turkish cities, can apply for a residence permit. This permit can be obtained by property owners and their family members. The required documents typically include a copy of the passport, a copy of the property ownership document (TAPU), a medical certificate, a criminal record check, and an application from the applicant. The Turkish authorities usually process these applications within a few weeks, and if approved (which is the case in most instances), a residence permit will be granted for one year with the possibility of renewal.
It's worth noting that some areas of Istanbul are off-limits to foreigners for residence permit applications. This should be considered when choosing a property.
Best Areas to Buy Property in Istanbul
Istanbul is a vast metropolis with a rich cultural and historical heritage. It's also a significant commercial and tourist destination. If you're purchasing property for investment, consider areas with strategic locations, high rates of ongoing construction projects, and substantial potential for capital appreciation. Currently, these areas include Fatih, Kagithane, Kucukcekmece, and Buyukcekmece.
If you're buying property for rental purposes, areas like Beyoglu, Sisli, Kadikoy, and Uskudar are popular among tourists and businesspeople.
For those looking for permanent residence, areas with excellent access to transportation, business centers, shopping malls, schools, and hospitals like Sariyer, Beylikduzu, and Avcilar are among the most convenient.
Property Prices in Istanbul
Istanbul tops the global list for the highest property price growth. In the past year, property prices in the city increased by over 127%, according to the Global House Price Index. Prices can vary significantly between prestigious central areas and less known districts. While property in desirable areas can be more expensive, it usually guarantees capital growth and secure investment.
Industry experts predict an annual growth rate of 8% for the Turkish real estate market until 2027, offering a positive outlook for investors seeking profitability and a stable market.
It's important to emphasize that Istanbul's attractiveness as a property investment goes beyond financial considerations. Different groups of investors view the city as an excellent place for permanent residence, setting up businesses, or furthering their education. For some, purchasing property in Istanbul provides the opportunity to acquire Turkish citizenship.
Cost of Living in Istanbul
Of course, in all well-known and major cities, living costs are usually higher than in smaller towns. This holds true for any country. However, compared to many European cities, the United States, and the Persian Gulf, Istanbul is often considered more affordable. Here are some average costs for various expenses in Istanbul (note that these are average prices at the time of this publication):
- 1 kg of chicken breast: $4.65
- 1 kg (2 pounds) of tomatoes: $0.89
- A dozen eggs: $2
- Monthly local transportation pass: $32
- Taxi fare per 1 km: $0.36
- Gasoline (1 liter): $0.92
- Monthly fitness club fee: $21
- Utility bills for a one-bedroom apartment (1+1): $63
- Monthly internet fee: $10
Key Areas of Istanbul
The real estate market in Istanbul offers a wide range of properties, catering to various preferences and budgets. You can always find an option that suits your needs. Istanbul is currently undergoing active development, with remote areas being urbanized, modern infrastructure being established, and the city becoming increasingly comfortable for residents. Istanbul is divided into 39 districts, each with its own unique characteristics.
- Fatih: The historical and tourist heart of Istanbul, home to iconic landmarks such as Hagia Sophia, the Blue Mosque, and the Topkapi Palace.
- Beyoglu: A bustling district blending Ottoman and European architecture, it hosts popular tourist attractions like the Galata Tower, Istiklal Avenue, and Taksim Square.
- Sisli: A modern area with numerous high-rise buildings, luxury hotels, and shopping centers. It's where you'll find the Ataturk Museum, dedicated to the founder of the Turkish Republic.
- Besiktas: A lively district on the European side of the Bosphorus, home to the Dolmabahce Palace and Ortakoy Mosque.
- Kadikoy: A well-known district on the Asian side of the Bosphorus, featuring the Moda neighborhood, popular among progressive young people.
- Uskudar: This district boasts numerous historic mosques, palaces, and tombs. It's also a popular tourist destination known for its beautiful waterfront, bustling markets, and traditional Turkish restaurants.
- Beykoz: Located on the Anatolian side of the Bosphorus, known for its historic mansions, natural beauty, and proximity to the Black Sea.
- Sariyer: A district on the European side, also a popular tourist destination with forests, castles, and historical landmarks.
- Kucukcekmece: A popular shopping destination with several major shopping centers and markets. The area also offers many parks, making it an excellent place for leisure.
- Avjilar: A district with multiple universities, hospitals, and shopping centers. One of its significant historical landmarks is the second-century Roman baths, open to the public.
- Basaksehir, Bahcesehir, and Beylikduzu: Rapidly growing districts offering great living, working, and recreational opportunities. These areas have received substantial infrastructure and transport development from the Turkish government over the last 15 years, making them highly convenient for business activities.
- Bakirkoy: A symbol of luxury and affluence, this area is home to many renowned restaurants featuring unique Turkish cuisine, members of La Confrérie de la Chaîne des Rôtisseurs.
- Kartal: Located on the Asian side of Istanbul, it's a coastal area currently on the rise, ideal for property investment with many construction projects underway.
Where Do Millionaires Live in Istanbul?
All of Turkey's wealthy individuals undoubtedly own real estate in Istanbul. Additionally, many foreign affluent individuals choose this city for property investment. Turkish and foreign oligarchs typically invest in areas such as Bebek, Etiler, and Tarabya on the European side, and Beykoz and Anadoluhisari on the Asian side. These areas are renowned for their stunning Bosphorus views, luxury homes, and the highest standards of living.
It's important to note that Bosphorus views are a hallmark of exclusive real estate but not an absolute requirement. Areas like Pendik offer luxurious houses and villas with private beaches and views of the Prince Islands, which are also in high demand. Another hub for affluent individuals is the Kadikoy district, particularly the Moda neighborhood, known for its peaceful lifestyle and abundance of historical buildings, providing a unique Turkish atmosphere.
Where Do Most Expats Live in Istanbul?
Expatriates purchase real estate and reside in various parts of Istanbul, depending on personal preferences, work, financial status, and more. Currently, nearly 800,000 foreigners live in Istanbul, including those who work remotely.
Young people under 32 usually opt for central areas such as Beyoglu, Kadikoy, Sisli, and Nisantasi, where they can enjoy a thriving nightlife with clubs and entertainment venues. Those over 32 often invest in areas like Bahcesehir, Basaksehir, and Beylikduzu, as these neighborhoods are more family-friendly. They offer the convenience of proximity to the city center while providing a quieter and more relaxed living environment.
RestProperty, a prominent real estate company, maintains a large branch in Istanbul staffed with multilingual experts. In our company's portfolio, you'll find listings from leading Istanbul developers and properties on the secondary market. Feel free to reach out; we'll assist you in purchasing apartments and commercial properties in Turkey's most renowned city.
