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Keith’s Zoom Session 17-March-2024

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Keith’s Zoom Session 17-March-2024

As we lumber towards spring, the real estate market shows no signs of taking a clear direction, with some data seeming to suggest a recovery of sorts, pointing to 17% increase in sales from same period of February last year. Alas, as with much data, you have to handle with care. At the beginning of last February were two of the worst earthquakes in Turkish history, and within hours of one another. The country more or less came to a standstill as coping with the immensity of the disaster was foremost on the minds of the citizenry. Therefore, noting an increase in sales activity from this period last year does not seem very convincing, given the very low bar. It did, however, interrupt the pattern of 6 months or more of downward trending sales figures. Nonetheless, it would be a stretch to say there is any exuberance in the market. With local elections coming up, no doubt March will post tepid figures as well. There could be many reasons why this is more likely to be another case of the dreaded “dead cat bounce”, where demand or prices fleetingly seem to point upward to just as sharply take a move back downwards. From a purely mathematical point of view, there is no way prices across the board can increase while borrowing rates remain so prohibitively high. This is incontrovertible, so to claim that a bottom to the market is being formed is very premature. Until you see the rates go down in significant measure, one must seek other answers to these transitory spikes in activity.
A few obvious reasons could be:
Pent up demand starts to seep through and those who have been on the sidelines for quite a long time see prices in decline and maybe consider cashing out some USD/Gold savings. Keep in mind, mortgage backed sales are down drastically, so it is very much a cash-driven market. Therefore, a small percent of buyers might fit into this category. Of course, this number would be too small to sustain a full-fledged recovery. Let’s see it for what it is, a respite in the declines, partially propped up by opportunistic buying. Bargain hunters hitting the streets, sensing it is a good time to fish for a deal.
As always, people in the rent-trap are looking for ways to gain entry to the real estate market. After a sustained absenteeism, perhaps this category of buyers is making the determination that now is as good a time as any to enter. Of course, a much larger number, although perhaps sharing this sentiment, nonetheless, are still left sidelined by borrowing rates.
As always, particularly in areas deemed to be a great risk in terms of seismology, there is a lot of trading up to housing stock that is newer. That trend will be ongoing for many years to come and will provide a strong catalyst in the future…but again, not in a meaningful way til rates make it a more affordable goal.
So, to sum up, there might be some factors that suggest the property market is trending upwards after what is turning out to be a pretty sustained slump stretching back almost a year now. The data, though, is thin and uncompelling at this stage, and for the near future, the buyer’s market looks set to continue.
On a side note, sales to foreigners continue to be well down off their highs. That is a bit of a convoluted and long story and not necessarily of great interest. These kinds of numbers ebb and flow for a great many reasons and are much more fickle than overall housing trends, so I’m not convinced its worth the effort on short zoom notes to get into the minutiae of that, at least at this time. Suffice it to say that foreign interest in Turkish real estate never really goes away for long. The value proposition, its mass appeal to so many nationalities, and the wide array of locations lifestyle options are a good bulwark against all-out cratering in demand.
The rental market:
After a pretty inactive winter stretch, signs are the rental market is starting to return to normal. Properties priced under 1K USD are the most in demand, and especially anything, say, under 750USD monthly, in downtown.
I have set up a kind of focus group to monitor the applications for Airbnb licensing of 4 buildings that have multiple – and I mean a large number- of individual owners who all agreed to sign the building management book to apply for licensing. These initial applications are ongoing, with none yet being completed. I give updates on the focus group and will give a full update once at least 1 application has been completed. As it is all brand new, and there is likely an avalanche of applications, speedy results cannot be expected. It looks like a minimum of a few months to complete the process. Costs do not seem prohibitive at all, so that is a plus.
For the next zoom session, we will examine why we often opt for “investment” properties over “lifestyle” for CBI or CBI packages. I welcome 1 or 2 past clients to co-host that session with me.
We will share the prospective property viewing links in the zoom session itself.

Properties will be distributed in meeting…
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My Bricks Istanbul is solely involved in the business of international real estate. My Bricks have over 13 years experience in negotiation, purchase, renovation, development of Istanbul property. My Bricks’s investment approach is opportunity-led as opposed to investment- led. When the property is fully researched and well sourced, only then will we suggest to clients.

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