An Istanbul property buying opportunity.

Many medium to large size investors use their invested amounts to leverage better Istanbul real estate deals for themselves. If they are investing in larger developments, they can also negotiate much better prices than those just coming off the street and looking to purchase single properties. They can further secure further discounts by getting in very early in the construction phase. Developers have been known to give up to 30 percent discounts in the first phase of a project as compared to the delivery stage. Therefore, wealthy investors, rather than developing their own project and assuming all the risk, sometimes piggy back on the developers and purchase large numbers of properties in Istanbul at steeply discounted prices, which they sell on delivery of the project, often at lower prices than what the developer is offering at that time.

Currently, one of Lilimont’s clients has 5 units in the very popular ‘My Home’ project in the booming Maslak area. The area, about ten minutes from the city center and immediately adjacent to Levent 4 metro stop. As the area has really become a focal point for high rise tower development, a surge in prices is evident.

My Home in the country

My Home in the country

This price growth has enabled our client to offer these units at a discounted price compared to what is on offer by others. Furthermore, as he has identified an attractive investment requiring a good deal of capital, he has made the rational choice to let these properties go at a great price. His stated desire is to sell them to one investor, rather than one by one, which would be too time consuming, albeit more profitable.
The properties are large 2 bedrooms, with starting prices as low as 775,000 TL and would make for a good bulk purchase, with possible further price slashing by a hard-nosed negotiator. One of the units has already been tastefully furnished and you can see it here  - http://www.lilimont-istanbul-realestate.com/for-sell/residential-apartments-maslak/

The developer is the Turkish legend, Ali Agaoglu, a regular on TV screens and the printed press and known for his ability to offer quality projects aimed at the burgeoning middle class and their demands for green space, quality design and high quality finishes.

Ali with his disceet family runabout

Ali with his discreet runabout

A Kuwaiti investment fund alone bought hundreds of units in one of his projects, predicting strong demand in their home country.
As Maslak has become a new business and residential district, the rents have also soared and the demand is being driven by the upwardly mobile Turks who favour Istanbul property on high floors with sweeping views over the city and the nearby forest.
Rental yields are estimated at a solid six percent, with plenty of room to grow further, as can be seen in nearby Levent.

As the summer season draws closer, an influx of foreign holiday makers will be looking for such opportunities. Particularly, Middle Eastern investors are often looking for such a chance, allowing them to house a large number of family members in the same location.

www.lilimont-istanbul-realestate.com

Keeping Property in Istanbul in Perspective

It has just been announced that housing prices in Istanbul notched a record rise this year.

Great news, but not without need of caveat.

In my decade plus here in Istanbul I have lived through the following:

  • -Istanbul property prices were originally billions of Turkish Lira.
  • -Or you could buy a piece if istanbul real estate for 100,000 Turkish Lira.
  • -The Turkish Lira was almost on par with the dollar some years back and now it is worth virtually 3 Turkish Lira.


Of course, there is a bit of leger de main at play here, as I am comparing the old Turkish Lira and the new Turkish Lira.

The Mightly green back

The Mightly green back

However, the relationship between the mighty dollar and the Turkish Lira has been a case of decline of the lira over the past 5-7 years. This means that Istanbul house prices have had a harder time keeping pace with the blazing dollar, and has also meant that those holding USD now find the prices very attractive in Istanbul. The record price rises should be viewed within this context, as well as the opportunity that currently is taking shape in Istanbul. In the city center, as opposed to the far-flung suburbs, the Istanbul housing market is robustly marching along in terms of lira prices. The outer areas, however, are about to feel the pinch. As istanbul developers try to pass on their increased costs due to dollar strength, they will likely find that their TL earning consumers will have reached the max in terms of affordability.

In downtown Istanbul, the market is readily propped up by dollar-wealthy foreign investors who have an appetite for anything they deem reasonable value. In a sense, this is not so different from how London operates, though on a less grand scale. During the interminable crisis that has come to shape the perspective of many investors, London became what they term a ‘buy and leave’ destination for investors, who often parked cash in properties that they neither rented out nor lived in. This simply does not happen in the TL dominated World of suburban Istanbul and is why I strongly favour sensible investment in the center. Commentators wryly referred to the London phenomena as being akin to a safe deposit box. Many Middle Eastern (GCC, MENA and countries to the near east of Turkey) now view Istanbul in this light.

Just buy and leave... simple as long as you have a million quid

London, Just buy and leave… simple as long as you have a million quid

Central Istanbul property shares some similarity with this investment trend. Investors often see the bustling downtown, with a vibrant economy, despite the bumps along the way, as a good position to hold, often taking a long-term view. Be it the ’flight to quality’ or ’safe haven’ or the less prosaic, more humorous ‘buy to leave’, there is the common thread that sees the big money investors in istanbul are staying away from what are viewed as the riskier non-downtown areas of large metropolitan areas. Legendary Irish poet Yeats may have exclaimed that ‘the center cannot hold’ but he certainly was not referring to real estate in the new millenium, but, then again, he lived in a castle.

Another oft-neglected aspect of this flight back to the center is the inevitable rise in transportation, of which the cost of public transportation is the most sensitive. In Istanbul, sudden price rises of 30% or more for single-line transport have been known to happen. Once a bargain, the costs of daily commutes are starting to add up, with consumers constantly making calculations taking into account lost time travelling and the monthly AKBİL total (like an Oyster card). In addition, as metro lines expand, so do the number of people using them, often making it more crowded and less comfortable (I can attest to the fact that after the Levent line was expanded to Yenikapi, I now always have to stand, regardless of the time of day).

In spite of all the possible outcomes over the next half-year or so, it seems that the most likely is that central ıstanbul will retain its primacy and will be less adversely affected by the spasms of an EM currency.

www.lilimont-istanbul-realestate.com