Despite strict containment measures amid lockdown, interest in Turkey’s residential real estate market did not come to a complete halt. Whilst transaction trends have certainly slowed, the contraction depth has been relatively limited.
According to the recent statistics of Knight Frank’s Global Residential Cities Index, several cities around the world have witnessed increased annual residential sales. The indices seem to recover after the coronavirus infections, considered to be the lowest point for global residential activities.
In the first quarter of 2020, two Turkish cities- Izmir and Ankara took the third and fourth spot in the global residential cities list. The index tracks housing rates in 150 cities using central bank data and official government statistics. Of all the locations in the indices, nearly 85% saw elevated prices year-on-year in the first quarter.
Source: Knight Frank
Izmir, Turkey and Budapest, Hungary were tied for second place in the ranking after each recorded similar annual change of 16.3%.
The two cities were closely followed by Ankara, Turkey which logged a growth rate of 14.8%, according to the report. Moreover, Istanbul also jumped on the bandwagon and was the third Turkish city securing the 12th place with the overall price gains of 11.6%.
The average global residential growth across 150 cities was recorded at 4.3%, which is still a significant figure amidst worst-hit pandemic situations around the world. A total of 85% of cities tracked static or positive price trends over a period of 12 months.
As the overall performance of the index did not drop significantly, it is being expected that the city rankings will look very different in the next six to 12 months’ time. Turkish capital economists are predicting revised GDP growth for 2020 as housing sales have rebounded faster than they were anticipated earlier.
Knight Frank’s head of international residential research, Kate Everett-Allen, has stated that “the data still offers a glimpse into the impact of Covid-19 with the number of countries and territories seeing a decline in prices on the rise again.”
What does it mean for Turkish Real Estate?
According to the report, gains were mainly determined by the “state of the housing market prior to the pandemic, the length and severity of the lockdown and each country or territory’s reliance on international demand, which has dried up in recent months due to travel restrictions.”
In Turkey, the total number of home sales rose by 8.9% to 383,821 units in the first four months of 2020 from the same timeframe last year as per the latest reports by Turkish Statistical Institute (TurkStat). However, this year is unusual due to the pandemic with global travel and tourism industries taking a backseat. In 2019, foreign home purchases rose by almost 15%, following strong growth of 78.5% in 2018 and 22% in 2017.
Turkey’s most prominent cities recorded following residential prices and sales gains:
- In Turkey’s largest city Istanbul, nominal house price rates soared by 11.71% during Q1 2020. However, when adjusted for inflation, house prices were slightly down by 0.14% year-on-year.
- In the country’s capital, Ankara, after the inflation rate adjusted by 2.67%, housing prices rose by 14.85% year-on-year in Q1 2020.
- Turkey’s third-largest city, Izmir, house rates went up by 16.36% after 4.02% inflation-adjusted percentage.
In a time of volatility, such as the ongoing COVID-19 pandemic, Turkey is exuding remarkable housing sales results according to Knight Frank’s research. For foreign real estate investors, Turkey has simplified the citizenship approval process, enabling them to buy properties with maximum ease.
Sources:
- Knight Frank
- Turkish Statistical Institute (TurkStat)
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