Why is residential property in Turkey rising in price stably? 1997
News websites and periodicals report about real estate prices rise in Turkey on an incredibly regular basis. Currently, Turkey takes the first place in the world apartments and villas price rating made by a well-known consulting agency, Knight Frank. The price for real estate increased by 18% in Turkey last year. Many people wonder what the reasons of such price growth are. We decided to investigate.
The main reason is construction quality improvement
Advanced materials and technologies, modern construction companies are trying to use these ones to erect residential complexes now. And the biggest part of such materials can be often purchased only abroad. Such products are more expensive than the products of local origin but their quality is much higher. Usage of high quality materials during construction is a warranty of maximum comfort and safety for future homeowners.
It is also important for price formation that currently developers choose luxury materials for inner finishing. This is the case of wall paints, floor tile as well as built-in furniture and bathroom fitment. Modern houses are often equipped with expensive ventilation system, conditioners, floor heating. As they say, comfort cannot be cheap. And as long as prices to construction and finishing materials are constantly rising, the cost of real estate is also increasing.
The second reason is that Turkey shows stable economic growth
Prices to real estate directly depend on economic situation in the country. As we see, for the last years Turkey has been showing stable economic growth. For example, economic indicators increased by 4.8% just in the first quarter of the year 2016.
Correspondingly, Turkey is becoming more and more attractive for investors. Real estate prices rise is regularity.
Constant control by the state
Construction industry is under the state control in Turkey. And it means that all erected houses and complexes shall comply with particular standards. A development plan shall be coordinated, and builders shall follow it insistently during the complex erection. The state always controls it. If the building does not correspond to the plan, the developer cannot execute Iskan, a document which is issued upon the house commission. That is why nobody dares to cut corners and therefor cut costs in materials and labour power. This triggers increase in real estate cost.
Land cost rise
On the grounds that active construction is being in progress and demand to real estate is constantly growing in resort cities, few building lands, especially by the sea, remain. Their value and price is increasing, correspondingly. Along with land price growth, real estate cost is rising, too.
Prices grow faster in big cities
The most brisk growth in prices is observed in large cities in Turkey and in resorts. By the way, for the last 5 years prices increased by 95% in Istanbul, by 65-70% on Antalya coast. It is stipulated by high demand to real estate both among local population and foreigners. And, as they say, demand begets supply and according to the economic laws, the higher the demand is, the higher the price is.
It follows from what has been said that we should not expect decrease in real estate prices in Turkey. Apartments and villas will rise in price, and even exponentially.