What is the situation in the Turkish real estate market at the beginning of February 2023?

Overview of the real estate market situation in Turkey at the beginning of 2023

The situation in the Turkish real estate market at the beginning of February 2023 highlights interesting and complex processes occurring in this segment. Over the past two years, there has been a steady increase, with record levels of prices for both purchasing and renting properties. In particular, regions that are popular among foreign investors, such as Istanbul, Antalya, Alanya, and Mersin, are vivid examples of this trend.

The influence of foreign investors

Despite the fact thatshare of foreign buyersIn the overall volume of the Turkish real estate market, it does not exceed 4.5%; however, in the coastal areas of the Mediterranean, this figure significantly increases, reaching 25% in cities like Alanya. Local analysts identify foreign buyers as the main drivers of price growth, which, in turn, causes dissatisfaction among some local residents.

The opposition leader, Kemal Kılıçdaroğlu, emphasizes this issue, promising that if he succeeds in the presidential elections on May 14, 2023, he will impose strict restrictions on foreign investors in the real estate market.

Restrictions for foreign buyers

In response to public pressure, the authorities have begun to implement some restrictions for foreigners seeking to purchase real estate in the country. Specifically, primary registration is limited in more than a thousand areas across various cities.residency permits (RP).

Since the fall of 2022, immigration services have started to more frequently deny tourist residence permits that were previously available to those planning to rent or buy property. This has created serious problems for many potential emigrants who were planning a long-term stay in the country, forcing them to choose between leaving or the necessity of gathering a substantial amount for obtaining another type of residence permit, which amounts to over $75,000.

Foreign buyers in the real estate market

It is noted that since April of last year, Russians have ranked first among foreign buyers of real estate in Turkey, while Ukrainians and citizens of Kazakhstan are also actively participating in this process. January and February 2023 were no exception — many Russians and Ukrainians are considering Turkey as a potential place for emigration, which in turn is changing the structure of purchases.

• It's interesting that the share of transactions for the purchase of exclusively resort properties has significantly decreased.

Economic and political instability

By February 2023, against the backdrop of political and economic instability, including an inflation rate of 64% over the year and a decline in the value of the lira, certain changes are observed in the real estate market. Nevertheless, these challenges have not significantly impacted the overall dynamics, and sales volume continues to grow, although the pace of this growth has slowed considerably in the last six months of 2022.

The impact of an earthquake on the market

Taking into account the impact of the recent earthquake, we are holding discussions with representatives of Russian-speaking real estate agencies in Turkey to assess how this event has affected interest in purchasing property and the overall market atmosphere. We anticipate interesting conclusions and observations regarding the development of the sector and its future prospects.

We continue to closely monitor the changes occurring in the real estate sector, taking into account both internal and external factors. With hope that the market will maintain its activity and remain attractive to various categories of investors, we are confident that this will confirm its potential for both purchases and rentals.

Introduction

Questions regarding real estate safety in Turkey are becoming increasingly sought after, especially among Russian-speaking buyers. When choosing property in popular regions such as Antalya, Alanya, and Mersin, it is important to consider the level of seismic activity in these areas. How safe is it to live and stay in these resorts?

Seismic zone of Antalya

Ksenia Balzhi, who holds the position of acting director of Liga Real Estate, explains that Antalya is located in what is known as“pink zone”which is considered to be the second highest in seismic hazard. This is due to the presence of an active fault line in the neighboring provinces. Thus, in the event of an earthquake, the city may feel its effects. However, it is worth noting that there is strict enforcement of building codes here. Over the past 15 years, most buildings have been constructed as low-rise apartment buildings, not exceeding five stories.

The situation in Alanya and Mersin

As for Alanya and Mersin, they are located inyellow zonewhich is considered the second to last in terms of seismic safety. The white zone, covering the central parts of Turkey, is considered safer. This zone starts from the Black Sea regions, passing through cities such as:

• Synop
• Giresun
• Trabzon
• Ankara
• Conju
• Karaman

In the yellow zone, minor sensations from large-scale earthquakes are possible, but they are not always noticeable. For example, here you can:

• Feel a gentle rocking.
• To see the chandelier gently swaying

If you are outside or in a car, you are unlikely to notice an earthquake. Usually, such events are felt during the winter, especially when they occur in the Mediterranean Sea. However, as practice shows, some people may feel the phenomenon while others do not.

Safety in construction in resort areas

It is important to note that no serious damage has been recorded in the resort areas. This is due to the fact that construction is carried out in compliance with all necessary seismic standards. These standards were introduced after the devastating earthquake in Izmit in 1999, near Istanbul.

Later, in 2008 and 2018, the regulations regarding construction were updated, including such critically important aspects as:

• Laying the foundation
• Control over the amount of iron and concrete used per square meter

As a result, houses built after 2018 meet the most modern standards even in the most seismically hazardous areas.

Monitoring compliance with regulations

Compliance with all standards is ensured by independent commissions. To assess the quality of concrete, samples are taken by three different organizations. This eliminates the possibility of corruption schemes or personal agreements. One sample remains at the plant, another is sent to a state laboratory, and the third is checked by an independent organization. All three samples must meet the established quality parameters for concrete.

Such serious control includes sampling at every stage of construction:

• During the foundation laying
• Construction of floors

In addition, the quality of the iron used is checked: the thickness of the rebar is measured and compliance with the technology of its installation is monitored. Everything must precisely match the project documentation. Thus, by investing in real estate in Turkey, one can be confident in a high level of safety and adherence to all construction standards.

Checking new buildings

Recent inspections of new buildings are conducted at the final stage of their construction, when they are almost ready for commissioning. At this last stage, independent experts inspect the entire facility to ensure that the completed work meets the specified design requirements. It is important to emphasize thatneighborhood safetyThe location where construction is planned is a fundamental factor.

Construction of a nuclear power plant

It’s no surprise that the Akkuyu Nuclear Power Plant was built in the area between Mersin and Alanya. This plant is located almost equidistantly between the two cities, but it formally belongs to Mersin Province. It is clear that the safest sites are chosen for the construction of such large and potentially dangerous facilities.

In addition, the construction of a second nuclear power plant is planned in the Black Sea city of Sinop, which is also located inin a seismically active zoneThis is confirmed by the risk maps. The contract for the implementation of this project was signed between Russia and Turkey.

Updates on seismic hazard zones

Sergey Volchenkov, who is involved in the development of Tolerance-Homes, shared the latest news about regional seismic activity. According to the current information:

• Antalya is in the second zone of minimal risk.
• Mersin - in third place;
• Alanya is in fourth place.

It is worth noting that, since Alanya is a vast region, some of its settlements may be in the third zone, but the city as a whole is classified as a fourth risk zone.

Safety of resort areas

It can be confidently stated that there have been no significant seismic events recorded in well-known resort areas in recent years. This also justifies the choice of location for the nuclear power plant. Notably, life in this area is considered safe, especially if your home is built in accordance with modern safety standards.

Marketing observations

Anastasia Kezik, the marketing director of Alanya Property Sales, draws attention to the current seismic risk maps in Turkey, which show:

• Both Alanya and Mersin are in a safe white zone, indicating a low level of threat.
• Despite the presence of slight underground tremors, no damage has been observed so far;
• The areas from Alanya to Gazipaşa and from Mersin to Anamur are located in safe white and green zones, where the likelihood of earthquakes is extremely low.

The difficulties of the situation in Antalya

The situation in Antalya looks more complicated: on the way from Alanya towards Antalya, there is an orange zone, indicating some level of risk. However, it is worth noting that strong earthquakes in the region most often occur in the open ocean, and local residents mostly only feel minor tremors. In the history of the Antalya region, there have never been recorded destructive consequences.

Russian-speaking diaspora in Turkey

In Turkey, there is a significant Russian-speaking diaspora, most of whom moved to the country in 2022. Consequently, the question arises: how have the pandemic and seismic events affected the lives of these people? Did they participate in providing assistance to those affected, and are there any among them who decided to return to their homeland?

Based on the words of Sergey Volchenkov, it can be noted that many foreigners began moving to Turkey as early as 2022 and even earlier, highlighting their desire to live in this country.

The situation in Eastern Turkey

In the eastern part of Turkey, where the destruction occurred, there is a relatively small population. Many citizens in calmer areas are actively helping those in distress – they are collecting food, clothing, and other items for those who have been left homeless. In doing so, they are showing their support and solidarity with the people of the country during this difficult time.

From my experience, I can say that I don't know a single person who would dare to move abroad. Ksenia Baldzha noted that she was amazed at how actively foreigners responded. The support from Russians, Ukrainians, and other residents of the CIS countries was simply incredible, without any exaggeration!

• People were gathering the most essential things.
• Many have expressed a desire to become volunteers, helping in the affected areas.

Since my husband is from Hatay, he was close to the site of the events from the very first day. Our team was involved in collecting humanitarian aid and sending vehicles with food and essential supplies for those in urgent need. Foreigners also did not stand aside – some helped with finances, some transported items, and others sorted the collected goods to facilitate the distribution of aid.

Support for foreign citizens

Anastasia Kezik also noted the important support that foreigners provide with a genuine desire to help, and many of them reached out with questions about how to send items or transfer money, even while being far from Turkey.

In the village of Avsallar, located near Alanya, there are many volunteers who help in the hotels where disaster victims are brought. Those who have lived in Alanya for a long time know well that this region is generally peaceful.

• If earthquakes do occur, they are usually not strong and do not cause serious damage.
• Basically, after the New Year, only those tenants who faced difficulties in processing their residence documents actually left.

Apartment owners and long-term clients living in Turkey have remained in place. Recent migrants often called and asked whether they should be concerned about the current situation or if they could continue living peacefully. We tried to reassure them, although there was indeed a sense of panic in Russian-speaking groups on social media.

Causes of destruction

As for the reasons for the significant destruction of buildings in the affected areas, Sergey Volchenkov highlighted several key factors:

• Age of the buildingsMost of the destroyed buildings were constructed many years ago and did not meet modern standards.
• CorruptionAn important factor has been the corruption schemes and the lack of necessary oversight from regulatory authorities.
• Quality of constructionDevelopers often resorted to administrative pressure to legalize substandard properties.

The problem was that in the rush for quick implementation, residential buildings were constructed that did not meet the requirements of foreign investors. In cities like Antalya and Alanya, the situation is completely different, as construction here is carried out with the interests of foreign buyers in mind, who closely monitor the quality of the buildings.

Amnesty for unauthorized constructions

It is also worth mentioning another important aspect: a few years ago, an amnesty took place in Turkey that allowed for the legalization of many unauthorized constructions, which meant that buildings that had not undergone the necessary inspections received legal status. This, in turn, negatively affected the overall safety of the housing stock.

Thus, one of the most serious consequences of such decisions has been that recent disasters have exposed all the weaknesses in the regulatory system for construction activities in the country.

Demolition of old buildings

Ksenia Baldzhi reported that according to the latest statistical data, almost all the destroyed buildings are old structures built before 1999, which account for about 98.5% of the total. These buildings do not meet modern seismic safety standards that came into effect much later.

The remaining 1.5% of buildings collapsed for various reasons. Currently, law enforcement agencies are conducting investigations, and more than 200 people, including developers and tenants of commercial properties on the ground floors, are under investigation. Often, tenants, in an effort to increase their space, dismantled load-bearing columns, which led to the collapses.

Factors of the scale of the tragedy

Anastasia Kezik noted that the scale of this tragedy can be explained by two main aspects:

• The first is the extensive destruction associated with old residential buildings constructed before the year 2000.
• The second is the buildings that violated construction standards and were unable to withstand the loads placed on them.

The law passed in 2000 establishes that new buildings must be constructed exclusively fromreinforced concreteHowever, this building construction technology creates boxy shapes that are difficult to aesthetically design. An example is the Toki̇ houses, which are intended for low-income individuals and are built using this technology. According to reports, not a single building constructed with this technology has been damaged.

Seismic safety check

How can one ensure that an apartment building is constructed in compliance with seismic safety standards? Ksenia Balzhi suggested several solutions to this issue:

• One option is to contact the local authorities for an assessment, or to order an independent study from specialized companies.
• Moreover, if the developer has obtained a construction permit — the so-calledbuilding permit— this confirms the existence of a foundation and building structure project that complies with all modern standards in effect since 2018.
• This data can also be verified by making a request to the city hall.
• There is also the option of direct communication with the developer to obtain information about the foundations and the construction materials used.

Importance of building technical passport

Sergey Volchenkov also emphasized the importance of having asearchwhich is a technical passport of a building issued after the completion of construction works. Nowadays, all building standards are strictly controlled by the local authorities supervising the projects. Thus, the presence of such a document confirms that the building was constructed in compliance with all norms and rules. The claim provides full information on the technical characteristics of the object.

Expert report for buyers

Equally important isexpert report. Foreign buyers of real estate in Turkey are required to obtain this document before concluding the transaction, in accordance with the legislation of the country. This report contains information about the zone assigned to the area, as well as information about when and how the construction activity took place, when the building permit was obtained and the date of its commissioning.

An expert report allows a potential owner to assess how well the construction work has been carried out and whether it complies with all the developer's standards. Careful study of these important documents can save money and avoid many problems in the future. It is important to keep in mind that high-quality architecture and a serious approach to construction are the basis of comfort and safety for future residents.

Visual assessment of the quality of construction works

Of course, professionals with a background in civil engineering have the skills to compare the quality of a building by eye. They also have the ability to request additional expert assessments, as well as obtain photo documentation, if available, from the builder to analyze the construction phases of your home.

According to Anastasia Kezik, it is difficult for an ordinary buyer to independently determine the level of construction work performed, relying only on the appearance. More often than not, large construction companies follow established norms and standards, which they inform their clients about.

Verification of the compliance of the built housing

In the case of verifying the compliance of the built housing, especially secondary housing, with the current norms, it will require some effort. You can turn to a real estateagency, where professionals will obtain information from the municipal authorities about the projects carried out, and will also be able to find out which inspection organizations have monitored the quality of construction.

Requests for such information can only be made for properties built after 2000.

Property insurance in Turkey

Let's move on to the issue of real estate insurance in the Republic of Turkey in case of destruction as a result of an earthquake. Who can take out such insurance and how?

Real estate costs and insurance

A lot of people deliberately indicate a lower value for their property in order to reduce insurance payments. However, if you indicate the full value of your home, the insurance organization will reimburse you the full amount in the event of an unforeseen event.

You should also consider taking out earthquake insurance with private insurance companies for any amount.

Changes in the real estate market

As far as the real estate market is concerned, one of the interesting questions is how foreign buyers' interest in residential real estate in places like Antalya, Alanya and Mersin has changed over the last month. What is the current situation with local buyers? These changes are having an impact on price categories too.

Decline in interest according to experts

Anastasia Kezik notes that there is a decline in interest in real estate transactions. In her opinion, this is due to the panic moods that have engulfed not only Turkey, but also other countries.

Although I have not noticed a sharp increase in the number of properties for sale, the interest of potential buyers has become more selective - if earlier the emphasis was placed on apartments with high floors and panoramic views, now there is a significant increase in interest in villas.

Real estate prices

As for price indicators, they have changed insignificantly. In closed complexes the cost of real estate is gradually decreasing, while in open areas, on the contrary, price growth is recorded.

The rental market is more dynamic. On the one hand, the rates started to fall slightly due to the outflow of foreign tenants, but then they increased again as a result of the influx of people from the eastern regions. People who are able to do so invite their relatives and pay their rent. There are also those who can support several families.

Clan structure and assistance to the region

It should be noted that there is a clan structure in Turkey and connections between people play an important role; that is why aid to the affected regions started to arrive the day after the tragic events.

Current demand for real estate

Ksenia Balji states that now there is virtually no interest in real estate. This is quite a natural phenomenon. Despite the discussions on seismic safety and the necessary standards, people need time to realize and accept the changes.

There is generally no panic, and no one has left the country, but those abroad have begun to reflect on the situation. Similar events were observed in Thailand after the devastating 2004 tsunami, when tourists initially refrained from traveling.

Tourism and real estate purchase

Nevertheless, tour operators in Turkey confirm that all planned trips remain valid and people continue to come on vacation. But when it comes to buying real estate, many people have decided to put their plans on hold.

Buyer information

For our part, we strive to inform those who have already purchased a home or are planning to purchase one, so that they can remain calm, especially if they have already invested their finances. As far as real estate prices are concerned, they are stable - neither rising nor falling. Stagnation is recorded in the market segment.

Investors and owners looking to sell their properties have also temporarily put their sales and decision-making on hold.

Current situation on the real estate market

In the current realities, there is a clear indecision among real estate market players who refuse to lower prices due to existing fears and uncertainty. If we refer to the events that took place at the end of 2015, when relations between Russia and Turkey deteriorated, we can recall the panic mood that gripped the market then. At the current moment, there is no such fear and panic. All necessary elements of the market, including investors, owners and potential buyers, are on standby.

Adaptation of sellers to lower demand

It is important to note that when there is a drop in consumer interest, real estate sellers are often willing to offer more favorable terms for deals. This is not very publicized; there are usually no announcements of sales and sales promotions. Nevertheless, if you decide to buy during this period, it can be a very cost-effective move.

The impact of elections on external demand

In addition, attention should be paid to the decline in external demand. This phenomenon is explained by the fact that elections are looming on the horizon. The opposition forces have voiced their intentions to abolish the right of foreigners to buyreal estate in case of their victory. This is certainly affecting the perception of potential investors. While many realize that it would be extremely unwise to turn away from outside investment, still negative projections can be misleading.

Despite the fact that the opposition has nominated an unpopular candidate, it is impossible to predict the outcome of the election. As long as there is a risk that such an election program may be implemented, many people choose to postpone their investments, especially in the case of new buildings that are in the very early stages of construction.

The tapu document and its meaning

It should be mentioned thattap- is the most important document that confirms ownership. It is only issued when the property is almost ready for use. This document is necessary so that you can be sure of your legal title to the property, as it first certifies your right to the land and then to the property itself.

Changes in the interests of investors

Sergey Volchenkov noted that foreign interest in the market has sharply decreased at the moment, which is quite understandable. News about the earthquake spread widely and undoubtedly caused negative emotions among citizens. People need time to cope with the consequences and assess the situation. However, in parallel to this, there has been an increase in interest from the locals. Many Turks are starting to move to safer regions such as Alanya or Mersin, which are less prone to natural disasters.

Outflow of foreigners and possible risks

As for the possible outflow of foreigners from the market, such a trend does not appear. People are in no hurry to sell their apartments, which is understandable - the resort areas were not affected by the devastating earthquake.

When asked whether the risk of introducing a ban on foreigners buying homes in Turkey has increased after the recent disasters, Xenia Balci says that there are no such concerns. On the contrary, the country is now experiencing a special need for foreign investment to rebuild destroyed buildings and houses. Investors, in turn, understand the urgency of their investments at a time when the country urgently needs funds to rebuild its infrastructure.

Introduction of visa regime for tourists

Several experts openly discuss the potential introduction of a visa regime for foreign tourists, but at the moment all these rumors remain unconfirmed. There is also an opinion that possible restrictions on access to certain “closed” areas may be lifted, but no concrete news on this matter has been received yet.

Support for earthquake victims

Sergei Volchenkov emphasizes that at this stage the main goal is to support the victims, and all resources are focused on solving this problem.

Economic situation and housing

On the one hand, there has been a huge reduction in the number of available housing units, with Turkish citizens themselves being the primary beneficiaries. On the other hand, the effects of the recent earthquake have complicated the economic situation in the country, which increases the need to attract foreign investment. In this context, the government will strive to find optimal solutions, taking into account all possible nuances, and it seems that there will be no hasty conclusions in this matter.

TOKİ State Program

Anastasia Kezik emphasizes that the real estate market situation requires careful attention. For those affected by the natural disaster and unable to purchase housing, there is a state program TOKİ, which offers benefits including:

• installments for up to 20 years;
• fixed prices in lira;
• affordable down payment.

Usually access to such projects is through a lottery, but for earthquake victims, such construction projects start off the line and with special conditions.

Recommendations for real estate buyers

For those who intend to buyreal estate in Turkey, Anastasia advises you to first familiarize yourself with the map of seismic active zones to choose areas with a lower risk. For example, if you want to buy an apartment in Istanbul, you should pay attention to such areas as:

• Arnavutköy;
• Etirlerie;
• Besiktas;
• Machka;
• Nishantashi;
• Shishley;
• Taksim;
• Kagythane;
• Gazizosmanpasha;
• Levent;
• Maslak;
• Istinye;
• Tarabya;
• Saryer;
• Karaköy;
• Gultepe;
• Emirgan;
• Bagjilar;
• Haracci;
• Tashokagi.

Choice of new buildings

Ksenia Balji emphasizes the importance of paying attention to new buildings, as quality control of construction works will be strengthened in the future. It is necessary to choose earthquake-safe zones and invest in projects of occupants who have established themselves in the market and value their reputation.

Recommended housing selection parameters

Sergey Volchenkov also draws attention to the advisability of choosing neighborhoods with safe construction. The optimal choice would be to choose a new building no higher than five storeys, preferably with a good foundation and built by a reputable company. It is advisable to contact professionals who are well-informed about local contractors.

Safe resort locations

When it comes to resort areas on the Mediterranean, cities like Alanya and Mersin are located away from seismically active zones and, according to various sources, can be classified as safe zones or yellow zones with low risk. This makes them the most attractive for real estate purchases.

It's important to choose boldly and consciously., taking into account all possible risks and characteristics of the region.

General information about real estate in Turkey

Antalya is located near a tectonic plate fault, which makes it part of the orange or pink zone. However, despite this circumstance, strict building regulations are followed in this popular international resort, and most residential complexes have low-rise features.

Istanbul, on the other hand, presents a completely different situation. It is extremely important to consider the location: the farther away from the Anatolian fault, the safer it is. It is also necessary to pay attention to the age and quality of the building itself when choosing a place to live.

Recommendations for buying real estate

If you intend to buy property in Turkey, it's important to ensure you have an extra sense of confidence. It is advisable to familiarize yourself with several aspects:

• Contact the developer with a request to provide photographs of the foundation installation process.
• Get information from the city administration through a real estateagency about the company that built your house.
• Learn about construction quality control (yapı denetim) from multifunctional organizations.
• To use the services of independent experts to assess the condition of the property at your request.

Tips for choosing apartments in new buildings

If your goal is to purchase an apartment in Turkey, you should pay attention to new buildings constructed after 2018. Such properties meet modern standards and are created by developers with a positive reputation. Nowadays, developers understand the importance of strict control over their projects from both the authorities and the public, which ensures the reliability of the purchase. However, it is important to remember that the title deed will only be available upon completion of the construction.

Alternative regions and seismic activity

If you are interested in alternative countries for choosing real estate besides Turkey, it is crucial to analyze the level of seismic activity in the target regions. An example is the Balkan Peninsula, which is considered an area of increased seismic risk. Despite the absence of significant tremors in recent decades, this does not mean that serious earthquakes have not occurred in the past.

Analysis of the real estate market after earthquakes

After the recent earthquakes, there has been a decline in interest in real estate in Turkey from foreign buyers. Notably, the demand for housing in cities like Alanya and Mersin has sharply increased, as residents from unsafe areas are eager to move to calmer places. Although apartment prices seem to have stopped rising, there is also no clear decrease. In this situation, the market tends to favor buyers, providing an opportunity to secure favorable conditions.

Emotional perception and future prospects

One of the reasons for the decline in demand from foreign citizens is the impact of recent earthquakes on public perception of the situation. Over time, emotions will settle, and people will return to a more rational approach. Additionally, investors are on alert, considering the possibility of an opposition candidate winning, who may impose restrictions on property purchases by foreign citizens in Turkey.

Conclusion

In conclusion, it is worth noting that the situation in the Turkish real estate market at the beginning of February 2023 is quite contradictory. On one hand, there is a noticeable increase in prices and interest from foreign investors, making Turkey an attractive place for purchasing property. This is evidenced by data showing significant shares of foreign buyers in popular coastal cities such as Antalya and Alanya.

However, on the other hand, the political situation and new restrictions imposed by the government create certain risks for foreign investors. Controversial security issues related to the seismic hazards of the region also raise uncertainty, especially after the recent earthquakes. Nevertheless, as our conversations with experts have shown,Building codes and standards in Turkey have significantly improved in recent years.which allows us to confidently speak about the high level of protection in modern buildings.

Recommendations for investors

Therefore, for those looking to invest in real estate in Turkey, it is important to stay informed about current trends and potential risks. Here are a few recommendations:

• Be thorough in your choice of real estate.
• Consider the political situation and the characteristics of the region.
• Study information about seismic safety.
• Contact reliable real estate agencies.

Despite the challenges, the Turkish real estate market still attracts foreign investors, and its future development will depend on a variety of factors, both domestic and international. If you are planning to relocate or invest, it is advisable to consult reliable real estate agencies that can help you make an informed choice and avoid potential difficulties.