Keith’s Weekly Property News July 31-2022
Normally in Istanbul there is a bit of a breather for about a month in the property market over the summer as people go away on holiday and hot temperatures fizzle the enthusiasm of would-be buyers. Around mid-August that all changes and usually things start to hop on both rental and property sales. I predict this year will be a bit different. For the moment it seems there is nowhere left for the market to go. Prices have reached their peak and I believe we are starting to see evidence of them coming down. The limited supply of real and actionable properties is what is keeping prices up. Rentals? Nowhere to be found. Therefore, we predict upward pressure on prices will continue. The days of affordable rents are probably over in Istanbul. It is all over the news and is becoming a massive social issue. There is no doubt that it is pushing people to buy. The first six months saw records broken for purchases. I do not see that trend continuing. There is a feeling that alanlar aldi – “those who were going to buy have already bought” and even though many people desperately want to get out of the rental trap, high prices are making that difficult.
To sum it up, there are many imbalances, but I feel a period of select opportunities is on the doorstep. There will be sellers in need of unloading properties. Prices will not drop very much, but I see there being a sprinkling of some very good opportunities.
I was talking to a guy the other day who works in sales for Volkswagen. He told me that second hand cars almost cost the same as new. A car 5 years old is only 15, max 20% cheaper than a new one. The interesting thing is the gap between the new build projects and secondary has only grown bigger in the past 6 months due to the huge increase in construction costs. It seems like a good strategy not to go for the new build projects at the moments or at least not for ones that are starting construction now, or have done so in the past 6 months. There must be much wringing of hands on the boards of those projects as their budgets get out of sync with the reality of build costs. Only so much can be passed on to the consumer. A good play is to go for buildings that are maybe 10 or 15 years old. These will surely be much better value than the ones coming out in 2023 or 2024. But that gap is likely to narrow significantly in the coming months, much as we saw in the car market.
As with constructions, so with renovation. I had been hearing stories of wild swings in prices for literally everything, labour, materials, etc. I went into one of the neighborhood ceramics stores and was shocked to see the price of tiles had gone up threefold since last September. And these are Turkish products. Apparently, producing tiles is an energy intensive affair, so we throw in the currency issue, energy costs and more, voila…unrecognizable. As I have said before, the prices are much, much cheaper than the West, but they are certainly going up. Maybe we are headed towards 500USD per sqm for an A to Z. I suppose, overall, that does not represent a massive increase when the overall value of the asset is considered. Nonetheless, it is disconcerting for us. I wish that there was something that could be done, but there is not. I wonder, do prices ever go back down after going up? Naïve question, I suppose. Again, when you see new build, luxury projects pricing going up by thousands of dollars per sqm, maybe these increased costs in renovations do not appear as pernicious. Darn inflation. It is mentally exhausting stuff. I find myself in a constant state of re-calculating things. Anyway, enough of pessimism. Istanbul – and indeed all of Turkey- is an immense, diverse and complex market. If you read the future in the coffee grinds, you can always find a good investment. Some of the properties below no doubt fit the bill.
Links to be distributed during zoom session
TEKIR EMLAKTAN MERKEZDE SATILIK DUKKAN 118729-146 | hepsiemlak
Very small but good commercial potential.
KOMPLE B HYPERLINK “https://www.hepsiemlak.com/istanbul-sisli-halaskargazi-satilik/isyeri-bina/123490-14″İNA REZİDANS DAİRELER OLMAYA UYGUN 123490-14 | hepsiemlak
How about a building just steps away from prime Nisantasi? Great store of value in troubled times.
Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.
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