Endeksa, a predictive real estate data analytics, and insights platform shared its “predictions” regarding the dynamics of the value of residential real estate towards the end of 2022. Endeksa regularly evaluates the state of the housing market in Turkey and expresses the most likely future predictions.
The experts examined the first half of the year's data as well as any “corrections” needed to these forecasts based on the results of two summer months that weren't included in the first half of the year (July and August). Even though not all the statistical data for the months of July and August has been processed, the “influence” of the summer season is still quite revealing.
CONTENT:
A decline in home prices is not anticipated, according to Gorkem Ogut, Founding Partner and CEO of Endeksa. He based this on the present status of the housing market, the balance between supply and demand, and the current makeup of the Turkish economy. The growth rate value, however, has either slowed down or, in some areas, gone in the opposite direction, in both the segment sales of residential real estate and the rental market (a down-trending graph).
Quote: “When analyzing the dynamics of price growth for residential real estate in 2022, we noticed that the peak was reached in May with a 14.7% increase. This dynamic also displays a negative tendency, i.e.. that although house prices still rise, they do so at a slower rate. It’s anticipated that things will continue this way through to the end of the year.”
The expert added that the top indicator for the rental market was also observed in the spring and occurred in April with +18.2% in dynamics. After April, the pace of rental rate growth began to decline, dropping to 6%. In the rental market, prices are still growing, but at a noticeably slower rate than in the homes for sale sector.
“On the other hand, we have been receiving more and more information that rental housing battles to find tenants due to the inflated tariffs. This should motivate landlords to offer more affordable rates so as to attract tenants and successfully collect rent.” Mr. Ogut emphasized. He added that this will help to calm the stressful situation in the rental real estate market.
Remember that the so-called rental bubble has already "burst" in Alanya and this is most likely only the beginning of many examples. However, predicting a future severe decline in residential real estate rental rates is difficult.
The expert continued, “the second half of the year is the most volatile period in the market. Since schools open and universities start the academic year in September, the alleged process of displacement and replacement occurs at this time (also, government employees, police, military, etc., are often transferred from one place to another in the autumn – editor’s note). As a result, there is an increase in the high demand for rental homes. Therefore, we expect that from September to October, the slowdown of the growth rate will be replaced once more by a slight acceleration: a form of “seasonal effect”, as we understand it”. Sharp ups and downs, however, are not anticipated because he thinks that in the dynamics, monthly growth rates won’t exceed 2-3%.
The co-founder of Endeksa concluded by predicting that the average price per square meter of housing, which was set at a level of 10,683 Turkish liras (TL) as of the end of July 2022, would rise to 12,779 TL in December, or approx. 20%. According to Endeksa expectations, the average cost of a residential property in Turkey, which was 1.41 million TL at the beginning of August, will rise to approx.1.674 million TL.
The average price of a residential property unit in Istanbul is predicted to rise from 2,238,360 TL in July to 2,680,448 TL.
Below are Endeksa’s more precise residential real estate predictions for the last quarter of 2022, including for-sale and for-rent properties.
Calculations are made for the five major provinces of Turkey – Istanbul, Ankara, Izmir, Antalya, and Bursa. The so-called national average is also mentioned.
HOUSING SALES
| Property transactions in July 2022 | Sale price, July 2022 (TL/1, m²) | Price for a housing unit on sale, July 2022 (TL) | Annual price change (%) | Predicted sale price, December 2022 (TL/1, m²) | Predicted price for a housing unit on sale, July 2022 (TL) | Predicted price change in December (%) | Predicted annual price change (%) | |
|---|---|---|---|---|---|---|---|---|
| Turkey | 93,902 | 10,683 | 1,410,156 | 195.44 | 12,779 | 1,674,049 | 19.62 | 52.25 |
| Istanbul | 14,350 | 18,658 | 2,238,360 | 244.02 | 22,716 | 2,680,488 | 21.75 | 63.58 |
| Ankara | 7,417 | 7,879 | 1,040,028 | 187.55 | 9,172 | 1,201,532 | 16.41 | 44.66 |
| Izmir | 4,868 | 13,379 | 1,725,891 | 178.67 | 15,656 | 2,035,280 | 17.02 | 63.29 |
| Antalya | 4,643 | 15,845 | 1,980,625 | 239.8 | 18,928 | 2,384,928 | 19.46 | 64.42 |
| Bursa | 3,538 | 614 | 1,297,890 | 192.13 | 11,238 | 1,483,416 | 16.89 | 49.05 |
RENTAL PROPERTIES
(This indicator also demonstrates the demand for real estate).
| Real estate transactions in July 2022 | The average price for rent in July 2022 (TL/1, m²) | The average price of the rented home in July 2022 (TL) | Annual price change (%) | Predicted price for rent in December 2022 (TL/1, m²) | The predicted price of the rented home in December 2022 (TL) | Predicted price change in December (%) | Predicted price change (%) | |
|---|---|---|---|---|---|---|---|---|
| Turkey | 93,902 | 49.05 | 5,396 | 152.84 | 54.48 | 6,211 | 11.07 | 60.33 |
| Istanbul | 14,350 | 83.17 | 8,567 | 164.54 | 96.42 | 10,221 | 15.93 | 57.04 |
| Ankara | 7,417 | 39.21 | 4,705 | 168.01 | 43.41 | 5,339 | 10.71 | 46.09 |
| Izmir | 4,868 | 59.16 | 6,508 | 166.85 | 65.93 | 7,252 | 11.44 | 73.53 |
| Antalya | 4,643 | 85.78 | 9,436 | 241.21 | 91.69 | 10,361 | 6.89 | 81.23 |
| Bursa | 3,538 | 31.53 | 3,626 | 116.26 | 37.83 | 4,464 | 19.98 | 53.82 |
By comparing the price dynamics from previous years, it’s possible to determine how accurate this forecast is in theory.
So, even though prices rose from January 2018 to July 2021, they did so less quickly than they did before and sometimes even sagged. For example, let's look at the price of a home for sale in the same months as in the tables above, i.e., from the results of July and January:
- January 2018 – 2,210 TL \ 1 m², the country's average;
- July 2018 – 2,297 TL \ 1 m²;
- January 2019 – 2,233 TL \ 1 m²;
- July 2019 – 2,115 TL \ 1 m²;
- January 2020 – 2,402 TL \ 1 m²;
- July 2020 – 2,704 TL \ 1 m²;
- January 2021 – 3,118 TL \ 1 m²;
- July 2021 – 3,616 TL \ 1 m².
The dynamics have changed drastically during the past 12 months and have been progressively rising. The “run-up” is also impressive:
- August 2021 – 3,777 TL \ 1 m²;
- September 2021 – 3,963 TL \ 1 m²;
- October 2021 – 4,191 TL \ 1 m²;
- November 2021 – 4,618 TL \ 1 m²;
- December 2021 – 5,270 TL \ 1 m²;
- January 2022 – 5,837 TL \ 1 m²;
- February 2022 – 6,321 TL \ 1 m²;
- March 2022 – 6,890 TL \ 1 m²;
- April 2022 – 7,845 TL \ 1 m²;
- May 2022 – 8,764 TL \ 1 m²;
- June 2022 – 9,432 TL \ 1 m²;
- July 2022 – 10,234 TL \ 1 m²;
- August 2022 – 11,450 TL \ 1 m².
In other words, prices “added” 300 TL per “square” every month during the past year, then 500 TL, and finally almost 1,000 TL in the most recent months (starting in March 2022).
Price hikes for the year were 203.15%, for the past two years, 302.74%, and for the previous four years, 387.86%.
With this remarkable increase, readers of istanbul real estate can make their own decision regarding the profitability of investments in the Turkish housing market, even though currently it is not the most attractive from an economic viewpoint.
