Istanbul Property Market Real Estate

 Istanbul Property Market Options

Why choose to buy a property in Istanbul? In short: Locations, locations, and more locations.

Buying Property In Istanbul

Choosing a property to buy in Istanbul can be seen as a daunting task. The city is sprawling and each corner speaks to its own uniqueness. It takes a long time to even comprehend the city in its fullness, usually years. But most people come with a set of preferences and these can be used to quickly rule out or rule in some locations where people may consider buying property.

For more information email info@lilimont-istanbul-realestate.com

Real Estate Budget

Budget can also be a determining factor. If the budget is under 500,000 TL probably the best option would be one of the suburbs. There is also probably not much point looking on the Bosphorous unless the budget is in excess of 5 mil TL, given the fact that there is limited supply of these properties on the market and always in high demand from locals and foreigners, alike.

Downtown Istanbul Real Estate

Some buyers just want downtown. Well, they are in luck. You could even argue that there are at least a half dozen downtowns, all having their particular claim to the title.

Downtown on the Asian Side? Well, that would probably have to be Kadikoy or Bagdad Cad. But for those who live on the European Side, there is an equal argument for areas such as Beyoglu, Sisli, and the CBD area of Levent.

Others would argue that the sea side gem of Bebek is the only true downtown (if you drive a Ferrari). It is hard to argue one over another, as it merely is a matter of taste or perhaps where people work, or even where their family has lived for generations, as can often be seen in the likes of such neighbourhoods as Kadikoy. All represent dynamic and vibrant downtown neighbourhoods with ample restaurants, bars and entertainment venues of all sorts. They are also all more or less transportation hubs, so when seeking to buy a downtown property, beginning a search in one of these areas would be an appropriate start.

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Beyoglu Downtown Istanbul

Others would argue that the old quarter in Beyoglu is the true downtown, dating back hundreds of years to the mercantile operations around the famed Galata Tower. It calls itself home to the largest concentration of expats, and is also the undisputed cultural and entertainment centre of Istanbul, though Kadikoy has made impressive inroads in the past 5 years. It is also hands down the tourism centre of the city. If people only know one street name in the whole of the city it is sure to be Istiklal. It goes through its ups and downs, but surely still has a strong claim to be the true downtown, both past and present.

Prices can range anywhere from 7000TL/ sqm. Expect to pay much more for a property with a view. Finding tenants is pretty easy if the property is kept in good order and the fee is appropriate. For more information Contact Us.

Sultanahmet in Istanbul City

A lot of foreigners end up in Sultanahmet during their stays in the city. Although it has a lot of character and history, this is truly a tourist destination and offers little value in the way of property to buy. Not to mention the fact, much of the quaintness would wear off after a while and you would be stuck with tourist prices for restaurants and line ups, etc. Finally, there is very little residential in the area.

Bosporus Real Estate

Bosporus properties are really an entity unto their own. The market is quite opaque and not many estate agents have a good price history for the area, as so few properties change hands.

Owners of property in this area will often not put their property on the market unless they are in financial trouble, thinking that it is irreplaceable.

In many respects, this is true, but it does lead to uneven asking prices and expectations. This market is probably best left for Qatari sheikhs and local business moguls. Prices (with a view) start from 30.000 TL/ sqm and go much higher for a villa with some historical charm and a good position along the water front. It is in many senses, by far, the most impenetrable real estate market in the whole of Turkey.

Buyers often purchase property here as conspicuous consumption, or as ‘trophy’ assets, rather than along strictly applied principles of investment, so often the selling process is guided by such indiscernible subtleties. However, if you want bling with a capital B, the Bosphorous is up there with some of the world’s finest and most naturally beautiful straits of water. If you are just looking to impress a few friends, we suggest some more modest options. Read more

Hot Property: Istanbul’s iconic waterfront mansions

Once the preserve of the Ottoman elite and affluent foreigners working in what was Constantinople, the mansions, known as yalis, were made famous in novels and more recently through modern Turkey’s hugely successful TV soap operas.

If you are looking for what constitutes pure suburbia in Istanbul when buying property, there are luckily many options, and also affordable ones. These areas are home to a lot of the construction of huge high rise building complexes, new universities, hospitals and shopping malls. There is usually quite a time-consuming commute to the city center, but with the increase in the Metro system infrastructure, as well as the addition of the 3rd bridge, the super-cool underwater tunnel, and the pragmatic Metrobus, many before inconceivable locations have opened up for living as well as for investment.

Beylikduzu is one of these shining stars, with many choices in new buildings with all the facilities (swimming pools, concierge, playgrounds, fitness studios, etc). Though not technically luxurious, they are quite utilitarian and time-saving. Prices in such complexes can start as low as 5000TL/ sqm, but are starting to go up. Developers are also offering more attractive payment plans than in years past.

If Beylikduzu is not your cup of tea, you could do a targeted investment near the 3rd bridge or the colossal 3rd airport. Both areas are booming with new construction. Proximity to airports can often be interesting in that the profile of tenants is quite good: they often spend less time at the property (hence, less wear and tear), they usually command greater than average local salaries, and are usually well-educated.

If none of these options suits you, then you could always try something along the Black Sea, or the Islands in the Marmara Sea. Saying that there are many options for purchasing a property in Istanbul is really no exaggeration.

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Tin Pan Alley

Istanbul Real Estate Property For Sale

Buy Property in Istanbul – Essential Information

Andrew Henderson is the founder of Nomad Capitalist, the world’s most-visited resource on issues of legal tax reduction, investment immigration, and global citizenship. He works exclusively with six- and seven-figure entrepreneurs to help them and their money “go where you’re treated best.

Real Estate to Citizenship in Turkey

In general, could you explain the essence of the real estate to citizenship program in Turkey, both currently and in the past?

“In early 2017, Turkey introduced its own citizenship by investment program. Like any such program, you make an invest and almost immediately get citizenship in a commoditized way; everyone except Armenian citizens qualifies.

Real estate in Istanbul was one of four options, but is by far the easiest and made the most financial sense. Originally, the required real estate investment was US$1 million, based on the value on the day of purchase. However, the government’s high hopes for renewed foreign investment never materialized, and after months of rumors, the minimum investment was finally reduced to US$250,000. The large declines in the lira make valuations a bit tricky, but working with a professional should smooth things out.”

Second Citizenship Explained

What countries do you think will benefit most or make use of the program most, and why?

“Most of my clients seeking a second citizenship are Americans looking for a “Plan B”, including the ability to renounce US citizenship and avoid the huge tax consequences of being a US citizen. Going from being a US citizen only to being a Turkish citizen only isn’t very appealing, but it may be appealing as part of a “passport portfolio” wherein you hold a western-friendly passport along with a Turkish passport. However, I imagine the largest clientele will be Chinese and Arab investors who see the low level of investment needed to get not only a “Plan B”, but visa-free travel to such hard-to-get countries as Thailand, South Africa, Morocco, and Middle Eastern frontiers like Iraq.”

Property in Istanbul – Benefits to Europeans and Western Buyers

What benefits do you feel it would offer for European/Western buyers of property in Istanbul? I can think of one example: Many Europeans live year-round in Turkey, especially in the coastal areas. Some have residence permits, but they are temporary. Others, have to navigate the tourist visa route, which poses challenges.

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“I have a residence permit in Montenegro on the basis of owning property. It will never entitle me to citizenship, and I can renew it every year. I don’t see that as a huge burden, providing they don’t enter the European Union and increase the standards to qualify for renewal. The same feelings are likely held by the Brits, Germans, and others living in Turkey; I don’t hear from many Europeans about the need for a second passport in a “Tier C” country.

If anything, some Europeans would likely prefer to NOT be Turkish if they’re living there. I think holding citizenship may actually be better if you DON’T live there, since residence permits can generally be renewed as long as you own property. I can see some Americans buying property to get another passport, but many Europeans will be cautious, I think. If you’re Danish and aren’t paying tax there, your perceived need for a “Plan B” is probably low especially since citizenship puts you “on the radar”.”

How does Turkey benefit from this program?

“This program was designed for and by developers with excess inventory. Their goal is to bring back the European and, primarily, Middle Eastern investors who fled in recent years over concerns with security and the lira.”

Clearing out that glut in the construction market could help developers sell their inventory and keep hiring for new projects. It’s worked in countries like Portugal, where a “Golden Visa” residence permit helped turn the real estate market around from the doldrums of 2009. We will see how valuable a Turkish passport is perceived as.

Could you compare it to a few other countries programs, some good, some not so good?

 “Turkey is unique in that it is the only substantial country offering citizenship by investment, but whose passport does not afford visa-free travel to Europe’s Schengen Area or the United Kingdom. As such, it’s hard to compare it as an actual passport. How is compares about as a citizenship is interesting. On the plus side, you have a substantial country with a lot of bargaining power. On the minus side, you have a substantial country that has more power to do stuff to you than a tiny Caribbean island you can buy citizenship in. What I like about Turkey, however, is that you can buy any real estate, which means you can actually make a good investment. In most other programs, real estate is “approved”, which means it’s generally overpriced and more for living in than for investment. Turkish citizenship could turn into a profitable endeavour for those working with professionals.”

How did you start your business, NomadCapitalist?

“I have spent years looking to “go where I’m treated best”. After selling my businesses in the United States, I spent time in nearly 90 countries seeking opportunities for banking, tax reduction, immigration, and investments. I was doing this stuff by myself and blogging about it, and then people started asking for my help I’ve always been fascinated by Turkey ever since visiting for the first time in 2011, and I find this new opportunity very interesting.”

Expats Investors and Citizenship Programs in Istanbul

I watched several of your YouTube videos and was very impressed, and also noticed you have a good viewership. You do not just offer valuable insights on citizenship programs. There is also a lot of other great information for expats and investors alike. What are some of the more popular subjects you have covered?

“Most people come to me to save money on taxes. We live in such an interconnected world that an entire new generation of online business owners and consultants no longer need to pay taxes where they’re from. I reduced my tax rates from about 43% to below 1% by following the very advice I offer to others. Stuff like passports and bank accounts are just part of what’s required to reduce taxes in a legal way, and people get a lot of diversification benefits from like holding other currencies and asset protection. Once you have your tax and lifestyle plan in place, you can take the money you save and invest it in high-yielding properties. Some of my clients will easily save $250,000 in taxes this year (or even in a few months) and will look at how to earn 10% returns in Istanbul and get a passport for free. It becomes a compounding benefit.”

Turkish Real Estate Market in 2018 – 2019

Do you think it is a good time to buy property in Turkey? And why?

“I think there is always the potential for good deals… and bad deals. Too many people who have come to Turkey have paid the “foreigner premium” for properties in dubious suburbs. The Turkish real estate market has so many players that it’s easy to get confused. If you have a focused plan and stick to it, I think that Turkey has a lot of benefits: a young, growing population, and a greater position in the world in terms of exports. Of course, there are a lot of questions about the economy right now, but I like to buy uncertainty and hold for the long-term. I think Istanbul offers a very unique offer; not many cities have a growing population of 20 million people and haven’t lost value in decades. Now that some prices are hovering near $1,000-per-meter, I think it’s becoming attractive for a long-term hold.”

Do you think buying property in Turkey can be a good hedge in a carry trade?

 “[I'll sit on the sidelines on this one.]”

What do you envisage for the future of Turkey’s program? More changes or a loosening?

“While there has been a Caribbean citizenship price war in the last year, I think most countries – especially a larger one like Turkey – isn’t going to constantly tweak. Honestly, you can debate about WHETHER you want a Turkish passport, but I think that if you decide that you do, this offer is rather attractive.

I wouldn’t foresee any further reductions, particularly as the $250,000 minimum is less than the originally proposed $300,000. That shows to me that the government is being aggressive to court investment, and if anything changes, I would suggest it would be some consulting firm convincing them to tack on a hefty application fee.”

Istanbul Property For Sale 2019 Real Estate Passport Travel Documents

Istanbul Property For Sale

Buy Property in Istanbul

The State of the Market: Pre-Season Report

Something very strange is happening in Turkey these days, though I have probably been the last to point it out (Well, in fairness, I have also been saying it for a while!).

Everywhere you turn in Istanbul, viewers are transfixed to TV screens that are at bulging and blaring with economists, pundits of one variety or another, politicians new and old, as well as stock market graphs and USD vs TL quotes that seem to fluctuate faster than the moving eye.

Wild stuff. And a far cry from the heady days of circa 2005, when barely a storm cloud on the grand Turkish Empire was visible, from Istanbul to Aleppo, and from Ankara to Tehran.

New finance ministers and the old, new Eu ministers and others left out to pasture, vie for air time to get their shot to expound, often ex cathedra, on the profound sense of crisis that charges through the concern-laden summer air that canopies the Bosphorus, a channel very much inured to talk of crisis; diplomatic, political, economic or whatever you care to mention.

But this one has gripped the imagination of one and all; the Turkish population itself, the government, the opposition, the so-called ‘West’ and the EU – all left just a little more than dumbfounded. How could this country – just a few short years ago – the darling of the Middle East and a favourite of those inside Washington and Brussel’s power corridors, and a country achieving blisteringly high growth rates into the bargain, arrive at such a state where the TCMB (Central Bank) had to make an emergency 6.25 % increase in the interest rates? Strange beyond strange.

There have been many scapegoats put forward and many attempts to make sense of the situation. To some, it is all about a US pastor held on terrorism charges, that Turkey refuses to release, to others, Turkey’s leaning towards Iran and Russia, and its planned purchase of military hardware from Russia, supposedly non-Nato compliant. Or finally, a result of the many gaping and open wounds festering in the Syrian catastrophe. The Turkish diplomatic assault has variously attributed the shaky economy to economic warfare – posed by – we are not sure, exactly – Interest rate lobby groups, foreign powers and so forth. Luckily, many of these are mostly political in nature and could expect to be resolved through diplomacy. Perhaps, also, the eroding effects of time will wash away some of these issues and a new normal will emerge. Ample fodder for upcoming PhD students to labour over, for sure.

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Istanbul Property For Sale 2019
Ah, but let there be light!!! Istanbul property has often been viewed as a safe haven, at least by those in the region, many of whom are used to some very un-safe alternatives.

Bankable stuff. Bricks and mortar and all that, a kind of Turkish gold. Above the din of panicked markets and currencies, and no-name analysts from this or that Capital Group, the shiny towers of Istanbul’s skyline boast an impressive array of both new and old architecture, with minarets hearkening back to a glorious Ottoman past while the silhouette of some of the finer examples of modern buildings nod to a Dubai-like future, if not even greater. Well, at least that is the narrative preferred.

But on this balmy late summer day on the Bosphorous, I am getting more calls daily from developers’ sales forces trying to enlist me to sell their property than ever before. Actually, multiply the average by 10. I have actually gotten into the habit of telling them our office has closed when I realise it is another sales pit-bull on the other end of the line.

Bosphorous Property For Sale Instanbul Buy Properties Real Estate

They used to say with proud contumely, ‘Our project has a sales office. Potential clients can come directly to us and early find us by themselves.’

I have not heard any of the same bravado for several years at least. Most are inexperienced junior sales staff put in a tough spot, cold calling on agencies they know do not have many real buyers. But the lure of hitting jackpot is there : you are a foreign real estate agency and may hold the magical – though somewhat fictitious key – to vast sovereign wealth funds of Arabian extract, private equity dying for a final resting place, and perhaps even more improbable wonders. Of course, some are just hard-working sales staff going through their rolodexes and doing good detective work.

Levity aside, Istanbul is still a great real estate market and one of the world’s truly great and dynamic cities. Therefore, a well-researched property acquisition rarely will go astray. The key is to look a little deeper than the initial glossy brochures you will inevitably be met with and to unlock the hidden value through your research and persistence.


So, in the face of all this turmoil and uncertainty, indeed even crisis, what can be done?

Well, successful businesses look inward and try to plug up holes and cost-cut in times of difficulty. The Turkish real estate market is no different. Some bad habits formed during peak years and now is a great opportunity to address those ‘inefficiencies’ or ‘drags’ on the market.

This list, by no means exhaustive, points out many areas in the Istanbul real estate market where improvement could be made by various parties from; the developers to estate agents to the foreign buyers, and even to the government level by introducing policies that promote and facilitate the sale of property to foreigners. There are of course many things that could be done for domestic purposes as well, yet for our purposes here, narrowing the focus to the segment that relates to foreign purchases, is sufficient.

Istanbul Real Eastate Inefficiencies or Drags

  • The irregularities in the declaration of property dimensions in square meters by private sellers, as well as by developers (my pet peeve). For a full discussion on this subject, please read this article
  • Developers’ boasting of high rental income on projects. You must research the rental incomes of comparable properties in the area and also consult with an independent real estate professional who would be able to tell you in seconds how much a prospective property will generate in income. You may also use that agent later on in the process of searching for new tenants, so starting off a relationship early is not a bad idea.
  • The access to mortgages for foreign buyers is limited and many find the high rates in Turkey unattractive. This is a tricky one in the sense that if you borrow in TL and the TL slides, your debt can actually be much lower in currency (a kind of reverse carry trade). Still, it seems the best way to purchase property in Turkey for foreigners is to pay cash (possibly even reverse mortgaging an already-owned property). Why property owners in London are not arriving on the shores of Istanbul to snap up property is beyond me. Of course, many do, but I would expect some areas of Istanbul to be Notting Hill. Paying cash also increases your bargaining power, no doubt about it.If viable mortgage products are made available to foreign buyers and some loosening of paper work requirements are made – especially for buyers putting in 50% cash on purchases – there could be a veritable explosion of new waves of interest from just about every corner of the globe. Turkish property affordability and ease of purchase would become legendary, as the door would be well and truly open. Why banks will not give 50% LTV has always been an impenetrable mystery.
  • Unrealistic expectations. Can anyone really believe that they can generate 10% annual income on a luxury property? Yields in Monaco are about 1%, London 2.5% at best, Paris about the same, and Pyongyang, well, er, a published 18% (according to Dennis Rodman, perhaps!). Yields in Istanbul run from about 4% for luxury properties to 7-8% for standard investment properties. If you get 10%, pat yourself on the back for a job very well done.
  • Lack of research/understanding of market by buyers. Many foreign buyers come spectacularly unprepared for purchasing property in Turkey. Telling an agent the size of the property desired as well as a specific location are a minimum. Just saying I want something in ‘central Istanbul’ is not really helpful. Think of Istanbul as a country in itself. You would not walk into a realtor in Toronto saying you are looking for a property in Central Canada, though it might be a useful ice-breaker and create some mirth.
  • Lack of communication on all sides; agents, buyers, sellers. This seems like a non-starter, but it is vital. Many times deals break down from things as simple as one side not receiving key information in their native tongue. If you do not speak Turkish, at minimum, you should have a Turkish speaker who is also fluent in your native tongue, whatever that may be. Buying a property is a big deal and there are many small, but essential details that can get lost in translation, so to speak. If you are using a lawyer, use one whose language skills are impeccable. The lawyer acts as an impartial player in these transactions and it is his/her job to relay information impartially and also to defend your interests exclusively. They will be able to advise you on all technical aspects of a transaction, but may not offer insight on the value of a property, etc, as that is really not their expertise.
  • If the agent or developer point of contact only speaks Turkish, you may be in for a rough road. In a city with millions of highly educated, young and entrepreneurial people, finding proper assistance is not very hard and you should insist on it.

Buying A Property For Sale in Istanbul – Positives

  • There is now an attractive real estate to citizenship program on offer by the Turkish government. It is quite enlightened and could benefit many in the region looking for a bolthole from unrest in their home countries. For more information click here.

NOTE: This will also be the subject of next blog, with some key analysis by a foremost figure in the field for such programs. and founder of NomadCapitalist.

  • Your currency goes a far way in today’s market, but this trend may not last forever. This graph represents the TL vs. USD over the past 5 years. It looks like now is truly the right time to buy, as many analysts are now saying the Turkish Lira is actually undervalued, largely due to what is hoped are temporary political reasons (discord with U.S.). The much-vaunted Big Mac index, for what it is worth, also confirms this.
  • Government. There is stability at least for the next few years. One has to believe that this will eventually have a soothing effect on markets.
  • Increase of property sales to foreigners. For more information Click Here

Finally, Turkish property will do away with USD and Euro pricing, as decreed by the president. This should have a net positive effect for foreign buyers looking to seriously buy property in Istanbul as reported by the BBC here.


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Carrefour on my street – Guest blog

I have been coming to Istanbul regularly since 2008 and even in that short period the changes are amazing. I recall being really pleased when the Belediye replaced the paving on our street, but that is nothing compared to some of the major changes that have happened. In less than ten years a metro has been built that can take me from Taksim to the airport and over to the Asian side, with a trip over the Halic on the way.

Metro on the Golden Horn

Metro on the Golden Horn

The infrastructure programmes have been amazing, and when compared with how slowly Crossrail has been built in London it makes me realise just how much has changed in a short period of time. The new crossing to the Asian side came in particularly useful to me when I accidentally booked a ferry ticket to Bursa from Kadikoy instead of Kabatas. The twenty minute journey to Kadikoy wasn’t anywhere near long enough however, for me to come up with a reason why this was my other half’s fault and not mine.

Regeneration comes in many forms, some good and some bad. Where I live in London has had extensive regeneration and I recognise a similar process in Istanbul. It makes buying a property here a slightly daunting prospect, as rapid change can make it difficult to know what will happen in an area, and one must just hope that the changes will be positive. Istanbul is a wonderfully comfortable city to visit, a good friend I love to see again and again. But like a friend who buys too many clothes, you can never be sure what you will see next and if you will like the most recent trend.

One of the biggest changes I have observed is the growth of what could be described as alternative lifestyles, more often than not described derisorily as ‘hipsterism’. Often seen cycling along the streets of Hackney in London, I see similar styles more and more in Istanbul. Turks make particularly fine hipsters as dark hair and high cheekbones really help to carry off the look and Turks are one of the few people who can get away with an ostentatious Ottoman style moustache.

Hairy guy

Hairy guy

At first hipsterism was confined to Cihangar, but soon the abundance of top nots and beards became too much for that small area and it began to spread it’s tentacles across Beyoglu. For a long time however, it seemed unable to get past the natural barrier that is Taralabasi boulevard. Not surprising, as that traffic can be a bit of a nightmare to cross at the best of times, never mind on a fixie. Eventually though the hipster tide broke down even that wall and I started to see hipster cafes everywhere. Well, I think they were cafes, but they might just have been really trendy people sat outside their house having a coffee.

Of course, there is nothing wrong with being a hipster, local organic vegetables and artisanal cheese is great and my male friends love being free of the tyranny of shaving. Istanbul is big enough to contain a wide cross section of people, including hipsters and hijab I teyzes in baggy trousers, this is part of what makes it an amazing city and why many of us want to own a property here.

And then one day, walking down Omer Hayyam, I smelt change in the air. Was it the Belediye fixing the street? Some hope there, Omer Hayyam is still a slippy slope in the slightest bit of wet weather. Maybe it’s those slightly uneven steps and nasty bins under the bridge. Perhaps it was a Starbucks, we all know there is no cap on the number of Starbucks that can exist in any one area. And then I saw it, like a beacon in the night. A Carrefour mini supermarket.

Carrefour on my street

Carrefour on my street

On Omer Hayyam. Just around the corner from my flat. My heart beat faster, could it be true? I peered in the window and there they were, hipsters shopping. And I knew that whatever happened to the area, we would be safe, as there was somewhere locally to buy milk. So thank you hipsters, your top nots might be daft but you’re brought Carrefour a bit closer to me.

Istanbul & Its Street Art Culture

Mural 3The attraction of living in a foreign city for most, is the opportunity to experience a new culture and way of life. Istanbul offers this in abundance, due for the large part, to its straddling of two continents and its historic, strategic importance for the Romans, Byzantine and Ottoman Empires.

 

But culture comes in many shapes and forms and isn’t necessarily confined to food, religion or nationality. Art has long been a strong influence within culture whether it be music, poetry or painting, but as times change, culture changes with it and this artistic expression manifests itself in different ways.

Wall paintings date back some 40,000 years in both Europe and Asia, but the modern day graffiti artist is often thought of as a blight on society. Without the consent of the owner, as is often the case, graffiti is a criminal offence and punishable by law. However it provides the less privileged in particular, with a vehicle to express underlying social and political angst.

Particularly in recent years, street artists such as Banksy, have seen graffiti and street paintings become a legitimate form of art, with his work now fetching a high price. Major cities around the world have become a blank canvass and Istanbul is one of those leading an artistic revolution.

Mural 2

Since 2012 Istanbul has held the Mural-Ist Festival, organised by the Kadıköy Municipality in the Anatolian side of the city, it celebrates street art through the creation of enormous wall paintings.

 

 

The aim is to brighten up some of the city’s more subdued areas, filling blank walls with vast amounts of colour, each narrating their own story. Once again the festival will bring as many as 10 mural artists from around the world, keen to make Istanbul their blank canvass, with each artists taking around 10 days to complete each masterpiece.

One such mural painted by Polish artist M-City at last year’s festival, was considered one of the best of its kind worldwide.

Not only are these works of art becoming a thread in the fabric of Istanbul, but it demonstrates the city’s open minded approach and acceptance of new forms of expression. This makes it a desirable location of many, not just the artistically inclined and should serve Istanbul well in the future.

If you want a first-hand experience of Istanbul’s street art, Lilimont have a number of properties within the vicinity of some of these artworks and the expertise to help you secure one.

Take Galata for example.

We’re listing this spectacular penthouse flat with panoramic views of the Golden Horn. This fifth floor, two bedroom apartment is one of a kind and packed with historical character.

We’re also listing this sleek penthouse flat, again in Galata, for 350,000 Euro. Offering a mix of regal, historic architecture with a sleek, contemporary design.

Both properties aren’t to be missed and both lie a stone’s throw away from one of our favourite Istanbul street murals!

Panda mural

Elections and a good Istanbul Property deal.

First of all, it would be hard not to mention the elections just past, which seemed to have fixed the attention of the entire country.

looking serious

looking serious

_83471165_e76a1016-7576-4c83-a0b2-1c5c912447b2

looks pleased with himself

The big surprise was that the AK party lost its majority and may need to form a coalition, something that has not happened in more than a decade.

The next 45 days look as if there will be a fair amount of uncertainty. Nonetheless, if the bickering that was so present during campaigning can be put aside, then there may be a resumption to a new kind of normal. Distant memories of weak and ineffective coalitions haunt the minds of many Turks, yet there is no reason to be sure that history will always repeat itself. Pessimism at this point is premature. As Abullah Gul wisely said, now is the time to focus on making things work. Indeed.

The first reaction of the markets seemed to indicate some panic and fear, but it has been far from free fall, suggesting that the sentiment is not as dire as it could have been. And voter turnout? Turkey must have one of the highest voting rates in the world, coming in at over a whopping 80%. That suggests that some parts of the democratic system are working just fine. Now if only the politicians could start being a little more collegial to one another!

As you may have noticed, from time to time we feature a property in the blog. Usually, we select this property in Istanbul carefully. Our criteria are essentially that it be an attractive property in some fashion and also makes for a good Istanbul investment vehicle.

This week, we are putting forth a one bedroom apartment just off Omer Hayam in The Aynali Cesme neighborhood.

pretty istanbul property

pretty istanbul property

This property in Istanbul was renovated from A to Z three years ago and remains in top condition. It is 65 square meters with an open kitchen plan and windows facing lively, colorful and vibrant Tarlabasi. In the evening sun, the view of dilapidated old Istanbul buildings in Tarlabasi is suffused with other-worldly hues. It really is a fantastic and nostalgic view for those appreciating this side of Istanbul life. feature-540x359

The asking price is 115,000 euro and it rents out strongly at 1500-1700 TL. It is also being offered with all furnishings. At a roughly 6-6.5 percent yield, this makes for an investment that provides immediate and steady returns. Being in a historical Istanbul building, the flat has high exposed vaulted ceilings and original wood flooring.

Galatasaray, at the midpoint on Istiklal, is a mere 5 minute walk.

This school has been around since the 15th century

Galatasaray school has been around since the 15th century

The price represents the entry level for properties in the area, so it is ideal for those seeking to take that first step on the Istanbul property ladder.

An optimistic view would look past the immediate political instability as a long term view points to democracy working in Turkey as opposed to a good amount of other countries. The political middle ground will most likely be found relatively soon followed by economic stability and in a relatively short time investments such as the property above could well look like shining stars against a backdrop of over leveraged Western property investments. Warren Buffets quote springs to mind – ‘Be fearful when others are greedy. Be greedy when others are fearful’.

www.lilimont-istanbul-realestate.com

 

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

Istanbul Property Assessment and Valuations

Lately, I have been getting quite a few requests to give valuations on Istanbul properties from foreigners who have bought property in Istanbul over past years and who are considering cashing in. In all cases, the goal is to give as clear a picture as possible on the current fair market value on the property in Istanbul. This is often easier said than done.

take time collating the info

take time collating the info

We must consider that the fluctuations in the TL can add additional complexity for the owner. What was worth 200 thousand dollars six months ago may not equal that today, given the currency has depreciated over ten percent. Naturally, foriegn owners looking to sell up their real estate in istanbul are interested in what they will take away in terms of dollars, euros, and so on. However, when doing a valuation, it is crucial to do it in TL terms, as it is in the end an asset in Turkey, and issues such as affordability and rental incomes on properties are gauged in TL. Once we have a TL valuation we can then convert to the owners desired currency but this should not influence the valuation.

What is the thought process and what are the main points when giving a valuation?

1-The first step must be to identify comparable properties which have been sold in the same area in the past six months. Finding a perfect comparable is not always possible, as the property types are so variable, as well as street by street differences. Additionally it is exceptional difficult to assess concrete property sales data in Turkey, cadastral records (land registry) can also be consulted, but are not usually so accurate.. However, if we can find properties that can be said to be reasonably equal, this is a strong basis for getting a working figure for a valuation.

2-Once property comparables have been found, then a differentiation process can begin. Which property has a better view, more light, is in better condition generally, has a higher rental income, is located on a street where the nearby properties are maintained better? For example, if property A was sold at 500,000 TL six months ago, but it has a better view, though not in such good nick internally, what is the value relation of these multiple factors. It is not an exact science, for sure, but having intimate knowledge of neighborhoods, street by street, is essentail in coming up with an as accurate as possible assessment and dealing with what are sometimes fuzzy distinctions.  Of course, this does not apply with large compounds where you have maybe hundreds of almost identical properties. These types of valuations are simpler, as the variation decreases and the comparative data is usually much greater.

prevailing price trend

prevailing price trend

3- General market trends. This often can also be a good starting point, particularly if the owner divulges the price they purchased the property for. For example, if the owner says they bought for 200,000 TL three years ago, and the data signifies that the particular neighborhood has been appreciating at 10% yearly during that period,   İt will be up to the assessor to disprove a similar trajectory for the property in question, and to provide rationale for the exception.

4- Always involve the owner. Home owners often are keenly aware of neighborhood developments and often know quite well the price that Mr. Jones, the neighbor, sold their property for last year. It is important to ask the owner what their expectations are for the price and also why they feel that way. They may be reluctant to tell you, but if there is trust, they should and often will. If it is unrealistic, reasons must be given.

5- Allow for ten percent error either way. It is best to give the valuation with the caveat that there is an error factor of ten percent either way, which can largely be attributed to market factors that change rapidly. Also, without feedback from live, breathing clients, it is impossible to get ultimate precision.

On the lighter side. After one particulary vehement objection to a property assessment I once gave years back on a 140 square meter apartment in the depths of Tarlabasi, I was bold enough to ask the owner the grounds for so vigorously disagreeing with my assessment. After brushing aside the methodology I explained I had used, he waved his arms in frustration and exclaimed that he had to buy new apartments in Umraniye (a new suburb on the Asian Side) for his three brothers who all jointly held a share in the current property, as that was the condition for agreeing to sell this apartment. Now, thats’s the job for an alchemist, I thought.

Six months later, he called me back and agreed that I had, indeed, given an accurate valuation.

www.lilimont-istanbul-realestate.com

Ferikoy: bargain hunter’s kill zone

Ferikoy is surely a neighborhood that will experience very good capital growth. It is very central in Sisli, and only about a 10-15 minute walk to Osmanbey, the nearest metro stop. In many ways, Ferikoy has not had its day in the sun due to the impressive surge in popularity of adjacent Bomonti, which is truly booming and has the crown jewel of the sparkling new Hilton.

Once quite ethnically mixed neighborhood composed of Armenians, Greeks and a Jewish community, it now is home to working class Turks. However, a change is discernible, with many local business owners becoming wealthier, their appetites for more appealing housing has become evident with the many new constructions sprouting up.

Pretty smart

Pretty smart

Furthermore, many Turkish people, revolted by the commutes to outlying suburbs are scouring these once forgotten neighborhoods, undoubtedly seeing that the calculations tips into Ferikoy’s favour when travel costs and ever-important time is taken into account. Add to the fact that Ferikoy actually has a neighborhood feel and a sense of vibrancy, it is no surprise that it is starting to get much-deserved attention.

An exceptional Antiques market

An exceptional Antiques market

As prices in nearby Bomonti seeme destined to break the 3000 USD/ square meter mark and Nisantasi, a brisk ten minute walk, considerably well beyond that mark already, it makes sense that prices in Ferikoy, which start at 1500 USD/sqm, are at attractive levels for investors as well as those locals desperately trying to avoid coughing up a large portion of their monthly income to generally rising rents.

The only thing that stops nearly every single property in this area from getting snapped up is the stringency of the banks and their common approach of rarely exceeding loaning more than sixty percent of the true market value of these properties, thus making it difficult for budget (i.e. Low-mid income buyers) to come up with what still amounts to a sizable downpayment. Further keeping a lid on matters are the high loan rates that drive up monthly payments to the point where the loan terms are mostly not much more than five years, with borrowers eagerly closing them before the full term, if at all possible. Here’s a great deal  - Lilimont Ferikoy

Rental properties in the area start from 600 USD for a one bedroom and up to 1000 USD for a two bedroom, with rental contracts usually agreed in TL.

If nearby neighborhoods provide any example, it seems likely that these will steadily increase in the next few years, possibly as much as 40-50%, making the future yield look very strong.

With Bomonti starting to look more and more like one of Istanbul’s most successful urban regeneration zones, it does not tax the imagination to feel that where Bomonti goes, so will Ferikoy.

Flats in need of tasteful renovation abound and are ready for the enterprising investor who, mind you, should look for a realistic return, perhaps 20 percent for a project.

www.lilimont-istanbul-realestate.com