Keith’s Weekly Property News March-19-2023
Still more of the “wait and see” on most fronts of the real estate market. February was one of the slowest months on record in the past several years, with sales numbers in all categories showing significant softening. I believe this is likely to be the calm before the store. However, the calm could last for a while yet. Many Turks go into a shell prior to elections, and with this one being the most important one in memory, likely this will exacerbate that trend. The market will likely remain quite inactive until June, so it could represent an interesting time to be seeking properties. I think interest in newer properties is very high, but affordability is an issue and no doubt Turks are also waiting to see what happens in terms of much anticipated government stimulus of one variety or another. Until that is all much more clear than it is now, numbers of sales can be expected to remain low.
Strength testing for buildings throughout Istanbul:
The municipalities are making the rounds and performing earthquake safety checks on thousands and tens of thousands of buildings. Ones that are deemed to be “high risk” will be slated for almost immediate demolition (within 3 months). This is something we are also keeping a close eye on and will update throughout the process, as more information is gathered.
After a blazing run for 18 months to the past two years, Airbnb has seen a pronounced slowdown in the January to March period. That is not unusual for the winter months, but I believe March number were certainly impacted by the February 6 earthquakes. April will be critical in determining how the market will play out in the coming months. It is unlikely that the earthquake will have a long term impact on tourism, but there may be short term effect. Also, an increase in supply may bring down the numbers a bit. I will be following closely and updating all concerned parties on a regular basis. This is the one disadvantage of Airbnb, namely that it is subject to the news cycle, and of course to ebbs and flows in supply, as well as legislative policies. In any event, we are watching over this carefully. The properties that have done well will likely continue to do well, but those that have been struggling may face increased pressure. In the Airbnb model, the cream rises to the top. Finally, pricing is crucial, especially in a competitive environment. Reviews and overall ratings are also critical. I have noted a strange phenomenon in the past. Turkish guests seem to give much lower points and often are quicker to write more critical reviews. This might be something to keep in mind when accepting guests. I am not really sure why this is, but it does seem to be the case. Another tip…If you have middle eastern or Iranian guests, be very clear about it if there is no elevator in the building.
Rise in materials and construction costs:
As we are undoubtedly about to witness a construction boom the likes of which we have never seen, it stands to reason that all forms of construction costs and materials are set to rise. It has already been a dizzying experience try to keep on top of renovation costs for the past 1.5 years, so hopefully at some point we will see some stability there so there is greater visibility when planning projects. The overall costs are still quite low vis a vis Western world prices, but the gap has narrowed.
Trend towards prefabricated houses and land:
As I noted in the whatsapp group, there has been a discernible interest in land, particularly within driving distance of Istanbul. There are government incentives for people who want to buy prefabricated homes and many are on offer for as low as 20K USD for small, 40 meter units. This industry is bound to grow exponentially in the coming years, as it combines many current trends and is, rather conveniently, affordable.
CBI outlook and the elections:
It has been no secret that the opposition party is against the CBI program. If they win the election, we could see meaningful changes to the program or see it eliminated entirely. That should hardly come as a surprise, yet I emphasize this is speculation. If the CBI were important for me, I would not delay.
Ikamet (residency) issues:
It came to my attention, that the government has stopped issuing residencies on the basis of rental contracts alone. I have heard many stories of applications being rejected. The path to residency through investment is still open, but that may see some changes as well, based on the same logic of CBI.
Property links will be shared in the zoom session, which will be short and snappy tonight. I have put in a sprinkling of offers in secondary cities such as Izmir, Bursa, Kocaeli, and Mersin.
I believe some of these cities are excellent value propositions and are a great way to diversify if you want to have multiple, small investment properties in Turkey.
Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.
We invite you to join us for:
#IstanbulInsights with Keith
On Sundays at 20:00* Istanbul time
20.00TRT/ 02.00SGT (Monday)
Password for logging in: 1234
‘Just Click’ the above link and be part of the Istanbul Insights with Keith’s property market updates.
Every Sunday we will share more info about the best property deals of the week, market developments, followed by Q+A time.