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Keith’s weekly property news November 28-2021

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Keith’s weekly property news November 28-2021

As had been anticipated, this was a very choppy week on the market again, with the Lira continuing on its chaotic journey into unknown lands. In the battle between, fight, flight and freeze, it seems that ‘freeze’ won out and the progress seemed sclerotic. Of course, that should come as no surprise.

Nonetheless, towards the end of the week, we started to get a few bites and managed to get a few deposits in through perseverance and flexibility on closing terms (offering to backstop in USD, etc).

I still feel it will take some weeks for things to return to any kind of norm, and that is also assuming a period of relative calm. After much wrangling with the numbers, particularly with the projected yields, I have decided for the time being to focus on the USD-based sqm prices. If those still look good, we may consider those properties actionable and defer on yield calculation reports ( : for another day. That is mainly due to the fact that it will take time for me to assess the latest numbers in the context of the rental market. Also, we will be leaning a bit more towards expat tenants during this time and USD-backed contracts, where possible. 

We are also trying to put together a plan for renting short to mid-term tenancies, where there is strong demand. This seems like an ideal approach during the turbulence; not getting locked into contracts that a few short months later look less attractive. This should work for a certain percentage of our properties, though not all. It also will require a strong marketing drive, though ultimately this can be a very productive direction for our clients. I have already received some offers of help in this regard (most notably, Ingrid and Andreas)


We are also going to experiment with a CBI package: 2-3 properties that are all CBI compliant and are investment grade. It is not as easy as it seems due to the many moving parts, but if we can come up with 1 or 2 a week, it can be interesting for clients who want to proceed a bit more quickly with the CBI process. Also, with the new CBI amount at closer to 3 million (in many ways a good thing for buyers), we may have to accept that getting just 1 property is becoming more challenging. Why is that? Many properties in the above 3 million lira range feel frothy, er, spicy. These fit more into the lifestyle category and are not as attractive investment-wise, though often function rather as safe havens.

As I mentioned in past week’s notes, we are encouraging clients to look at the 1 plus 1 model (one in new build market and one in secondary). I had been hoping to present new build alternatives by this week, but that plan was upset by the market tumult. Several developers that I had been in discussion with rather arbitrarily raised their prices 20-30%. So the search on that end continues, inshallah, the results will come this week. As I have mentioned in past weeks, it is a case of finding GoldiLocks environment where price/availability of good units/location/anticipated yields and appreciation and delivery time all come together. This is a real task.


I am also very keen to exploit the potential arbitrage opportunities of Kagithane. I really feel clients need to be looking there to free up the log-jam. I have had a few individuals who have expressed interest, but I expected more. It makes for a safe investment at the low entry point it offers and seems to present strong upside as well. It is well beyond speculative in nature now; big things are happening there. How it will look in 10 years is unimaginable. I said the same thing about Bomonti about 8 years ago in a blog.

 I think we need to park ourselves there for a few days this week and see what shakes loose. Perhaps I will let the Tiger loose on some of those nasty hills!


President Erdogan has gone ‘all in’ against high interest rates. While always a well-known fact, his dislike of high rates, it seems that we are at a point of no return in this war. I feel it has gone much beyond rhetoric and it is unlikely that he will back down now. The market is trying to break knuckles, as is the won’t of markets. What does this mean for the Lira? I think the volatility will be a constant feature for the short to mid-term. This will take some time to play out.

Putting all of this to the side for the moment, what about the property market? With reduced borrowing costs, the Turkish consumer’s return to the scene is imminent. I think, on a small scale, we have seen it already. We made a lot of calls in the past week and got answers that deposits have already been taken. I am pretty sure those went to Turkish buyers. Some of them were properties we really wanted to size up. This trend will likely only accelerate, with bricks and mortar seen as a reliable investment during asset tempest. The stock market is at record highs, so likely people will be nervous about putting money into that. Gold and USD, the same. I think any Turk who can buy real estate will buy it these days. I wish I had numbers on searches in Sahibinden and Hepsiemlak. I am sure they are way up (side note; I think sites such as Zingat are less up to date and PropStar should be avoided at all costs).

On a broader note, I suppose this evening we can discuss the imbalances, opportunities, distortions, and asymmetry that the past few week’s events have thrust into our ken.


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