The growth in profitability of investments in Turkish real estate reaches100% in two years.

The Turkish real estate market has proven to be a profitable field for capital growth, and over the past two years, real estate investors have doubled their investments. Smart investors who entered the market in March2021 by purchasing residential properties have seen their holdings doubled in value. This meteoric rise in real estate value is particularly noticeable in2022, when the average price of homes in Turkey increased by an impressive75% when measured in US dollars.

The Turkish central bank's distinctive characteristic of unorthodox monetary policy was a key factor in this paradigm shift. Instead of resorting to traditional measures, such as raising interest rates to curb demand in the face of rising inflation, the central bank chose an alternative path by cutting interest rates sharply. This maneuver led to a concomitant explosion of hyperinflation, with the annual consumer price index approaching triple digits. The bank's next policy changes under a newly appointed governor led to a slowdown in inflation to 48%, according to Turkstat data.

The depreciation of the Turkish lira was a key catalyst, making Turkey an attractive hub for people transitioning to remote work in the wake of the global pandemic. With remuneration denominated in stable currencies such as the US dollar, euro or British pound and living expenses denominated in lira, international migrants in Turkey have found themselves in an advantageous position. An analysis by online real estate platform Housearch.com estimated the cost of living in Antalya, with its picturesque beaches and attractive coastline, to range from as little as $1,000 for thrifty individuals to $2,000 monthly for those seeking a premium lifestyle. Renting a studio apartment near the sea in the Aksu neighborhood costs only about $300 per month, while renting in the upscale neighborhoods of Konyalta or Muratpaşa can reach $950.

Official statistics highlight a significant increase in foreignreal estate acquisitions in the separate year 2022. While a significant portion of these transactions involved Russian buyers seeking alternatives to European real estate investments, market analysts agree that the upward trajectory of real estate prices is set to continue. While major cities such as Istanbul, Izmir and Bodrum may experience a slowdown in growth as indicated by rental rate indicators, several coasts retain significant potential for value growth. A notable trend is that buyers are increasingly seeking coastal locations, including places such as Kusadasi, Kalkan and Antalya. Demand for coastal properties has seen a marked increase since the start of the pandemic, and even seismic events in some parts of Turkey have not been able to hinder the growth of real estate transactions.

The re-election of President Recep Tayyip Erdogan has removed uncertainty and further boosted the confidence of foreign investors. Buoyed by these developments, real estate developers are feeling optimistic and international investment firms are refocusing their attention on the Turkish real estate market. With housing prices exceeding construction costs, mainly due to external demand, the market is ready for new projects that can attract international investors.