Keith’s weekly property news January 8 2023
It always seems like there is a lull in the market around New Year’s, both in terms of rentals and sales, with this year being no exception. Hopefully, things will kick into gear this week. Also, I had a lot of admin and property management duties, so that usually slows things down on the hunt. So, I spent the day trying to sweep all that away so I could focus on the job in hand; finding some new opportunities in the New Year.
All the talk on the local real estate market lately has been about the mortgage support program being rolled out by the government. As sales figures have certainly dipped in the past 3-4 months, it is hard to estimate how this will affect prices. The government is certainly in favor of prices cooling off, as it has become quite a social issue. However, the program may prevent prices from falling. It is a bit hard to work through the numbers and know exactly how much stimulus it will provide to the market. Certainly, some consumers will take advantage of the basically assisted payments for mortgages. However, there are a number of requirements and still many would be buyers would still not be able to afford purchases at current pricing.
We are still seeing a lot of aspirational pricing on the market. Gradually, we expect those will be weeded out as no one will show an interest. As we also filter out tenanted properties, our stack of viewable properties seems to grow ever shorter. Yet, as I recently quipped, we are like law enforcement; we only need to get it right once. Well, maybe more than once, but we do urge clients to be patient. If you want a reasonable deal, it is pretty hard to walk in and just pick up 2 or 3 right away. But they do exist. Our system is proof of that. Yet, I also share client frustrations. Even though you have the funds ready to deploy, sometimes there is just not something actionable on the horizon. I pretty much know what everyone wants and I make a mental note of it, so rest assured on that end. But if it is not there, I’m not going to just shovel something your way and hope it sticks.
There is also a bit of a disconnect with some client expectations. Everybody wants a Bosphorus view. We indeed are aware of that. But for a decent property with a decent Bosphorus view, the entry price is not less than 400K USD. That is the entry price, I emphasize. Make that a luxury development and the price will be double. I would be happy to be proven wrong. Consider that Bosphorus views have become an iconic symbol almost world wide. Expect pricing to be in line with that reality. Also, areas such as Tesvikiye and Nisantasi have an almost global appeal. The jet-setting crowd that swirls around Dubai, Istanbul, Moscow and London probably all name drop these neighborhoods now, with many owning property or seeking to own property in such locations. Certainly ask any globally oriented person from the Middle East and there is a pretty good chance they have been shopping on Abdi Ipekci in recent times.
We are constantly re-assessing different neighborhoods, re-evaluating, and questioning our own assumptions. It is a very dynamic process, particularly over the past few years where the market has been prone to gyrations of all sorts, whether it be for rentals, Airbnb, currency depreciations and more. It really requires pretty much constant attention to get the pulse of the trends. Not to mention all the white noise from so and so developers pumping new areas (many largely untested and at fairly elevated price levels).
Still, the best way is to keep in touch with me and keep up a calibration process. If you send me a property and I do not like it, I will be pretty quick to point out why. Also, I do note when we send something it doesn’t grab you. Again, it is a process, but it often produces good results. I am not really sure what the alternative is.
I also encourage clients who are interested in the CBI and are primarily interested in acquiring a passport while also making a sound investment, to also have a look at commercial. I literally pull my hair out when I reflect on how under-represented commercial has been with my clients. I realize commercial received lots of bad press during all that Covid mania, but it is alive and well in Istanbul. It can be an excellent alternative if you are not finding what you want on the residential market. Personally, I find it a little easier to step out of my own shoes with commercial. As I have said many times before, and to an extent I understand it, it is often hard to buy a residential property you cannot envisage yourself living in. This will be a limiting factor in your search. Commercial is much less likely to stimulate those judgements. Also, I should point out that I lived for years in a rental in Cihangir. The reason was that the rent wasn’t bad and it had a great sea view. To buy that kind of property was, I felt, not a great investment, but renting it made sense. I guess the point of my digression is that if you are looking for a perfect Bosphorus view at a bargain price, you can pretty much assume you are competing with a Mongolian-sized horde of multi-millionaires.
BTW, I eventually did buy the little sea view place in Cihangir where I had been renting, but only after the owner passed away. That is probably not a strategy we can employ very often, and probably not one CBI clients have the patience for;
There is some low-hanging fruit in commercial, where the numbers add up. If you are buying a basket of properties, why not diversify and pick up a cheap office somewhere?
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