“If one had but a single glance to give the world, one should gaze on Istanbul”. — Alphonse de Lamartine, 19th-century French writer
Istanbul is one of the largest and fastest-growing metropolitan cities in the world. 30 new streets emerge there each year, the suburbs have integrated well with the metropolitan agglomeration, the population of Greater Istanbul — which has already reached 14 million — has been increasing by 3% per year on average and the middle class (about 40% of the population) is growing. The burgeoning city needs up to 250,000 extra residential units annually. Most buyers in the market are foreign nationals. Due to their high activity, the residential property price growth rate in Istanbul is in the double digits: according to Reidin, in May 2016, the city’s property became 28% more expensive year-on-year.
Istanbul is promising in terms of property buying, but not all 39 districts (ilçeleri) are good for investment. Those who consider investing in Istanbul should choose the district carefully, as the transport accessibility, the quality of infrastructure and the seismic risks can have a significant impact on the potential of their investments.
According to Alyona Malcheva, property sales consultant at İnanlar İnşaat, the most upscale residential districts of the city are Beşiktaş and Sarıyer. They are located on the European side of Istanbul. “The bustling, busy and touristy neighborhoods are good for business”. These are Ortaköy, Taksim, Sultanahmet, and Laleli, for example”, she says.
My Bricks Real Estate presents its ranking of the most promising investment districts in Istanbul:
Beşiktaş is a green, safe and modern district on the shore of the Bosphorus: it is the commercial and cultural centre of the city and home to famous palaces and luxurious hotels.
The transportation system is excellent in the district: buses and dolmuş taxis run to almost every district of Istanbul. The district also has a sea port. The only disadvantage related to the system of transportation in Beşiktaş is the absence of a metro system.
The majority of the most upscale Istanbul neighbourhoods are located in Beşiktaş. They include Bebek, Levent and Etiler. Ortaköy and Ulus are also considered favourable for life and property investment.
Levent is a famous business district with a lot of office buildings, including the highest Turkey´s Istanbul Sapphire skyscraper (54 floors above ground level and several underground floors) and Bankası Tower 1 (52 floors). Foreign companies have been "conquering" Levent in recent years. There is a shortage of office space, therefore, the old-fashioned villas are often converted into offices. The Etiler neighbourhood has shopping centres, sports clubs and modern apartment buildings. Often, those who work in Levent reside there.
There are many antique villas facing the Bosphorus in Beşiktaş. This is one of the most densely built-up districts of Istanbul and the very place where the most expensive property is located: the prices for spacious apartments exceed €5,000 per sq m. A rental flat of 120 sq m yields about 4.4% per annum.
Another upscale district of Istanbul, Beyoğlu is located near Beşiktaş. The Galata Bridge connects it to the old European side of the city. The Tünel metro line runs from the bridge to the Galata Tower.
The most famous landmark in Beyoğlu is the Pera Palace Hotel, constructed in 1892 for the passengers of the Orient Express. In one of its rooms, Agatha Christie wrote her novel "Murder on the Orient Express". Over the years, such celebrities as Greta Garbo, Mata Hari, Sarah Bernhardt and Kemal Atatürk stayed at the hotel.
Beyoğlu is designed and built-up in the European style. The art nouveau and eclectic buildings, constructed in the early twentieth century, form shopping streets and boulevards with supermarkets and expensive boutiques there. A tram line runs through these neighborhoods. In the central street of Beyoğlu — İstiklal Caddesi — there are shops, restaurants, cafés and bazaars. There are art museums, as well as the consulates of the UK, Germany, the Netherlands, Russia and Sweden in the district. Many immigrants from Asian and European countries settle down in Beyoğlu. Generally, these immigrants are artistic intellectuals and young professionals.
The top neighbourhoods of Beyoğlu are Gümüşsuyu and Cihangir, a bohemian neighborhood with narrow streets, cafés and bars, where primarily artists, writers and actors choose to live.
Beyoğlu is one of the most expensive places to buy property in Istanbul. A flat of 75 sq m costs about €170,000. The rental rate runs at about €840 per month, meaning that the owner will get an yield of about 6% per annum.
"Flats of all types rent out well there. You can rent two and three-bedroom flats out to families, and one-bedroom flats to singles. The closer the residential property is to the centre of Istanbul, the quicker you find the tenants. If the residential complex has extra amenities, for example, a gym, a swimming pool, etc., the yield rate will be higher, but the tenants will need to pay aidat, which is a monthly fee for the swimming pool, garden, cleaning and security", Alyona Malcheva says.
Sarıyer is a picturesque district near the Bosphorus Strait on the European side of Istanbul. It borders Beşiktaş in the south and the districts of Kâğıthane and Eyüp in the southwest and west respectively.
There are numerous cafés and restaurants in Sarıyer. The local beaches are a popular holiday destination. However, only sunbathing — as opposed to swimming — is advisable, as the water there and in other areas of Istanbul is extremely polluted.
In 2008, Bahçeköy became part of Sarıyer; in 2012, the latter absorbed the commercial district of Şişli and the business district of Maslak. One of the most upscale Sarıyer quarters is Nişantaşı. It is known for having been the famous Turkish writer and Nobel Prize winner Orhan Pamuk's place of residence. The Zekeriyaköy neighbourhood is also considered safe and livable.
Sarıyer is traditionally popular with the high-income individuals from Turkey and abroad. Affluent politicians, businessmen, actors and musicians live there. In Sarıyer, there are many prime villas used as summer residences. The local property is expensive. For example, a flat of 75 sq m costs €117,000 on average. Letting such a property brings about €700 per month. The average yield rate is 7.15% per annum. The price per sq m in Sarıyer sometimes exceeds €3,000.
Fatih is located near Istanbul Atatürk Airport, Istanbul Sirkeci Terminal and Beyoğlu. The majority of Istanbul´s main historical and cultural landmarks, including the Hagia Sophia Museum, Topkapi Palace, Süleymaniye and Sultanahmet (the Blue) Mosques, the Church of the Holy Saviour in Chora (the Chora Museum) and the Istanbul Archaeology Museums are all located in the district.
Fatih includes the neighbourhoods of Laleli, Sultanahmet and Eminönü. Laleli is the most "Russian" neighbourhood of Istanbul, as it focuses on tourism from the CIS countries. It is also quite an important commercial centre of the city. In Laleli, there are many Russian traders who come to buy goods, and the shops are speckled with Russian lettering. The crime rates in the neighbourhood are higher than in the better-situated Bebek and Nişantaşı. The adjacent Sultanahmet neighbourhood is a historical centre, with plenteous landmarks of the past. You can see exemplary pieces of the ancient Turkish architecture, the traditional timber houses, in that area.
"The prices in Fatih start from €135,000, [and] the rental flats yield about 5% per annum", says Maria Zharaya, Tranio director for Turkey.
Kadıköy is the most ancient district of Istanbul on the Asian side of the city: the earliest evidence of human settlement there dates back to 680 BCE. This is a large commercial district with a lot of cafés, restaurants, shops, bazaars, parks and playgrounds, but it is also cosy and safe.
Kadıköy is situated near Sabiha Gökçen International Airport. The Haydarpaşa Terminus that connects Istanbul to Anatolia, the Asian part of Turkey, is located in the district. A ferry goes to the European side of the city every 30 minutes.
Kadıköy includes Caddebostan, the business Kozyatağı area, the quiet Moda neighborhood
and Fenerbahçe, home to the local football club stadium.
In Kadıköy, there are mostly residential complexes for middle-class buyers. The residential properties facing the Bosphorus are expensive, although the investment amount to buy commercial residential property is €147,000, slightly lower than in Beyoğlu. Buying a flat of 75 sq m will bring the owner about 4.5% in annual yield.
Kartal is situated on the Asian side of Istanbul, between the districts of Maltepe and Pendik. Despite being far from the centre, the location of Kartal is convenient: Sabiha Gökçen International Airport is just 15 minutes away, and there is a train connection to the other districts. For this reason, Kartal is densely populated, even in spite of the relative remoteness.
Kartal is a rapidly growing economy-class residential district, the equivalent of Beylikdüzü on the European side of the city. The residential property prices start from €70,000 there", Maria Zharaya says.
There are a lot of luxurious villas and prime apartment complexes — largely oriented towards affluent buyers — on the coast already, but the Istanbul authorities have plans for the further development. Kartal is expected to become a new cultural and industrial centre of Anatolia by 2020. The numerous projects for the construction of residential buildings, concert halls, cinemas, museums, office blocks, parks, restaurants and a dock, as well as the Kartall Mesa complex with 304 apartments and the Pega Kartal complex with 200 apartments, have been initiated recently. Apartments cost from €100,000 to 400,000 there.
Bakırköy is one of the most ancient residential districts in Istanbul. Middle-class representatives reside there. The district is located at a distance from Beyoğlu and other popular places of Istanbul, but has a good transport connection to them. For instance, Taksim is 40 minutes away by bus, or 25 minutes away by taxi, Kadıköy and Sultanahmet are 25 minutes away by train, and Atatürk Airport is only a 15-minute drive away.
Bakırköy is one of the main commercial and residential districts on the European side of Istanbul. There are countless inexpensive clothing shops, cafés and restaurants, some of them facing the Marmara Sea. The residents of the surrounding districts come to shop there, which is why Bakırköy is always bustling, especially on the weekends. The largest shopping mall is Capacity.
In previous centuries, this part of the city was primarily inhabited by Greeks and Armenians, who built spacious houses. In the twentieth century, Bakırköy was reconstructed significantly, and not much was left of its historic part.
The foreign population of Bakırköy is small, but the district offers good employment opportunities to immigrants and has 50 Turkish language schools. The top Bakırköy neighbourhoods are Ataköy and Florya.
"Bakırköy is one of the most upscale Istanbul districts. Florya is where the local elite, celebrities and the upper class of Istanbul reside. The prices range from €2,700 to €13,500 per sq m", asserts Maria Zharaya.
Beylikdüzü is a district popular among the middle class. Most locals are industrial or service workers. There is a regular transport connection to the centre, for example, Atatürk Airport is only a 10-minute drive away.
The district has well-developed infrastructure: restaurants, shops, playgrounds, schools, parks, hospitals, sports facilities and three universities. Among the residential properties, newly built apartment blocks predominate. The new projects in Beylikdüzü include the Tac Mahal apartment complex that has a swimming pool, a parking area, a nursery, a fitness centre, restaurants, cafés, cinemas, sports facilities and playgrounds.
Nearly all the territory of Istanbul is seismically active, and Beylikdüzü is considered to be one of the most earthquake-prone districts, along with Avcılar and Maltepe, which were significantly affected by the 1999 İzmit earthquake. However, the investors do not need to worry about that: modern buildings are constructed using new technologies which enable them to resist strong quakes. The authorities of Istanbul assign a part of the budget specifically to the reconstruction of rundown buildings.
"It’s better to buy a newly-built one. This guarantees greater safety. The Turkish nationals themselves increasingly sell their homes and move to the newly-built residential complexes. The modernisation of buildings in Istanbul is in full swing: the old structures are demolished, and the new ones are constructed instead", states Alyona Malcheva.
The residential property prices in Beylikdüzü range between €600 and €900 per sqm.
Ataşehir is a business district near Kadıköy, located on the Asian side of Istanbul. It is designed for car owners, and, as a result, the use of public transport is not very common there. The developers of Ataşehir made provisions for a large parking zone, and there is a plethora of convenient surface and underground parking areas in the district.
Many companies have their offices in Ataşehir: new business buildings are being constructed, and there are many opportunities for recreation and sports. The district also has five schools and two shopping centres. Ataşehir is considered to be well-situated, and families with children often choose to live there.
Another feature of Ataşehir is the development of multi-storey housing. There are no detached houses, and the authorities do not plan to construct any. Instead, 18,000 residential units for 80,000 middle-class residents will be built in the near future. According to Maria Zharaya, the residential property prices in Ataşehir start from €160,000.
The Küçükçekmeсe district is located near Bakırköy. The main advantage of this part of Istanbul is the opportunities for growth and the abundance of space for development. There are many newly built high-rises in Küçükçekmeсe, but not enough parks and shops yet: the local infrastructure is yet to be developed. People with every level of income live in this district.
Mass housing construction began in the 1980s in this area, and for this reason Küçükçekmece has almost no ancient buildings. Apartment complexes are being actively built in the district now. One of the new projects is Tema İstanbul, with over three thousand residential units, three hotels, a shopping mall, an exhibition centre, a parking area, and a theme park with amusement rides, cinemas and museums. The prices for flats in the complex range from €120,000 to €370,000.