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.

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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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Buy to let Istanbul Property

Naturally, many if not most Istanbul real estate investors are seeking to gain rental income from properties that they purchase. for_rentApart from those who are buying to live in a property, the vast majority are quite keen to know how much a prospective Istanbul property would fetch on the rental market and often base decisions on whether or not to purchase based on such projections.
Unless you are intimately familiar with the rental market, you will probably just be guessing and your figures will be well off. Below are some tips to provide more precision for your calculations:

  • -ask the realtor directly what the income is. Obtain proof by way of a rental contract or monthly bank deposits, if possible.
  • -scan the internet for properties with similar character, size and location. Try to get five, and then average them, finally subtracting ten percent for assumed negotiated final prices.
  • -use common sense. If the figure being given just seems too high, it probably is. Better to err on the side of caution.
  • -find an online index giving rental values in particular neighborhoods, try this or this. Look a few years back to add some historical perspective, as well as give you insight if rents are trending higher.

A few points to be aware of:

  • -if you are considering a property in Istanbul with an in-situ tenant, find out how long the tenant is staying. Sometimes, they may be on a shorter contract (3-6 months) and hence will likely be paying a higher rent than those who have been living in a property for years. This may artifically inflate the yield.
  • -again for in-situ tenants, understand the current contract. Some tenants prefer to get a contract with utilities included, as often their companies pay a lump sum monthly. In this case, they are often overpaying for the convenience of not having to worry about utilities. That can be fine, but just be aware that the yield may decrease when you get a new tenant in and they just want to pay the basic rent.
  • -be aware of any tenant that has a close connection to the owner, be it a relative or close friend. Understanding the nature of their agreement is not always easy and you cannot be sure what you are getting into. Better to start fresh with your own tenant in this case, unless you feel good about the tenant.

What are some other points to consider when aiming to maximize your investment and minimize fuss?
Sometimes in our efforts to sign on with tenants, owners can be too kean and overlook diligence in properly screening the tenant.

This guy?

This guy?

In my experience, avoid tenants in Istanbul who do not have steady work, as the temptation is too great for them not to pay when the going gets tough, and favorable tenancy laws make this easier. It is better to review the tenant properly before signing, as this will save headaches later on.
Another good idea is to immediately set aside ten percent of the rental income for repairs.

or this guy?

or this guy?

In my experience, this is usually more than enough, and it can be viewed as an acceptable amount for painting, etc. However, if you have not set the funds aside systematically, it can lead you to negative thoughts on your rental, where there should be none.
Istanbul is a good city to be a property owner. The rents are high and demand or to in most areas is pretty brisk. Small apartments in Aynali Cesme or Talabasi should always have good income potential, take a look at the potentials – Aynalicesme and Tarlabasi.

Time is money!

Time is money!

If your property is remaining empty for several months, you should be honest with yourself and ask if it is really properly priced and if it is in acceptable rentable standard, these being the two roadblocks in successfully renting out your property.
Finally, it should be noted that some properties outperform others on the rental market, but may not achieve the same capital growth. This should be considered prior to any purchase. There are often good reasons for this, yet they may not be obvious on first glance (for example, a student rental property may get higher yields as many people may share the space. Yet it may nor appreciate so well if the property gets more wear and tear).

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How’s Istanbul property faring with the new year?

With balmy spring-like weather for most of January, the Istanbul real estate scene for 2015 is off to a zippy start. Lilimont has been keeping busy with a handful of transactions, as well as a few renovation projects and our proffessional services for foreigners (these will both be discussed in future blogs).

As global currencies seem to be flying all over the place, often unpredictably due to strong intervention by central banks, it often means great buying opportunities for investors, with property in Istanbul coming at discount prices.

Perhaps another driver has been the absence of bad news. It is a curious thing that often this is enough to float markets higher. You often do not always need really good news to push real estate in Istanbul forward and bring life to the market.

So, in short, it has been a good start to the year, but we will continue to keep the pulse and offer regular updates to followers. Of course activity also means that new sellers often enter the market, sensing that it is the right time to sell.

We have several new properties, but I would like to focus on two in particular, owned by the same couple, who are moving on to what is often termed Istanbul’s sister city, Berlin. Anyone familiar with the art scene here will know that there are deep and growing connections between the artistic communities in both cities and it has become de rigeur for young local artists to do a stint in Berlin, and many are opting for longer stays due to the lower cost of living.

The first property is located just 50 meters from the Osmanbey Metro, making it incredibly convenient and central. It is on a quiet side street in a very well- maintained building.

Great pad in Osmanbey

Great pad in Osmanbey

A two bedroom, 120 square meter in immaculate condition, ideal as a rental property. The list price is 300,000 euro, and with the dip in the currency, the price has really come into its own. The renovation style is universally appealing, a perfect blend of the contemporary and the classic.

 

Cool investment in Aynali cesme

Cool investment in Aynali cesme

The second property is located on a quiet side street in flourishing Aynali Cesme. This first floor flat has all of the classic features; high ceilings, wood floors, exposed brick, and hand made Turkish tiles, all at the tempting price of 200,000 euro. It is also in a building that is well taken care of and organized, and in an increasingly prime location.

Perhaps the enterprising individual could obtain both of these properties, providing an excellent foothold in the Istanbul market. Contact Lilimont for viewings!

Outstanding Istanbul Property Investment

From time to time, being realtor in Istanbul, a truly remarkable piece of Istanbul real estate falls into your lap. Being bottom-line minded, to achieve this status a property in Istanbul must not only possess beautiful characteristics, but also must be profitable for any prospective buyer.

Ottoman Perfection

Ottoman Perfection

This is quite a challenging prospect, as the owners of such outstanding properties are usually wealthy and reluctant to sell prized assets at below market value, mostly prefering not to sell them at all. And when it is a listed first degree historical property that was inhabited by the chamberlain to Sultan Abdulhamit the Second and attached to the greater grounds of his palace? A rarity indeed.

Sumptuous

Sumptuous

At time of writing we have the Mabeyn Kosk on sale for 2.25 million USD, a bargain by any measure, with a likely rental yield of over 7%, possibly even 8.5%! The 450 sqm net property, spread over five floors, with a gorgeous 140 square meter garden has been restored to pristine condition by the same architects who worked on the famed Egyptian Embassy property on the Bosphorous.

In its recent history, it was a high end gallery bringing together the elite in Istanbul. http://www.mabeyngallery.com/EN/exhibitions/upcoming

From the Gallery website:

Located in Besiktas, The Chamberlain House is one of the most remarkable examples of civil architecture at the beginning of the 20th century. The house was the former home of the Chamberlain of Sultan Abdulhamit II, Haci Ali Riza Pasha. 

The entrance floor and the master room of the house is decorated with murals as well as magnificent wooden ceilings covered with paintings in oil. Designed to display the Chamberlain’s taste in art, the interior evokes a compelling vision of Sultan Abdulhamit II’s initial commissioning of Western Artists. 

The building houses Mabeyn Art Gallery since October 2011. All the hanging systems and panels are designed to protect the lavishly decorated interior. Now, Turkish and International contemporary art works are exhibited in a century old historical setting.

Superb detail throughout

Superb detail throughout

Naturally, with such a past, the property has been the subject of many publications, articles and dissertations, a few of which are below (sorry, Turkish language only); -http://www.mabeyngallery.com/uploads/pressclips/9150_Milliyet-Sanat-Mart-2012.pdf

http://www.mabeyngallery.com/EN/press/

http://www.hurriyet.com.tr/pazar/18881450.asp

Do not let this center piece asset pass by, as it seems destined to return great yields and immediate capital growth! We would approximate that with a fair economic wind a combined rental plus capital growth a return of 15% per annum could be achieved over the next 5 years. The price is somewhat negotiable due to a need to sell.

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The Good Life in Verdant Sapanca

In my last blog piece I touched on the rising popularity of the Sapanca Lake region, becoming increasingly in favour with Istanbul property owners due to its proximity to Istanbul and its affordability.

Lake Sapanca

Lake Sapanca

Many Istanbulites, particularly the wealthy, are fond of second homes in addition to their property in Istanbul, but the coastal regions are not so accessible, particularly if it is for a short weekend sojourn.

Also, living in Istanbul can make you itch for some quiet and tranquility in green environs. For these reasons, Sapanca has come into focus very recently, particularly with the rise of several boutique villa projects, some being backed by money from the Middle East.

So, how far does your money go in Sapanca? Quite a way, to be sure.

We’ve been monitoring Sapanca for a few years now and found very attractive and spacious villas ranging in size from 150 sqm to 220 sqm imternally, with ample garden area.

great lake view property

great lake view property

The prices range for mid range from 150,000 USD to 275,000 USD, leaving lots of room for upward growth. There is likely to be many opportunities to short term let to group tourists. Of course, there are palatial villas as well, but we can say on average that the mid-range properties are in the 1250 – 1500 usd/ sqm range.

wonderful views

wonderful views

 

Luxury properties, in compounds (or clusters), with full security, tennis courts, swimming pools and all facilities imaginable can be double.

Some of the activities in the area are skiing in winter, nature walks, mountain biking, off-road 4×4 driving, picnic spots, horse riding, swimming and much more. One imagines it will not be long before a first class gold facility is launched. Local cuisine abounds in many of the large kebap houses and fish restaurants.

Blissful

Blissful

 

 

If you would like some information on properties in the area, please feel free to contact me.

 

Ok… so what’s the score now with Istanbul real estate?

Lately, I have been receiving many requests for information on the political and economic situation in Turkey, and perhaps more specifically how that is affecting the Istanbul real estate market. As there is seasonal slowness regarding Istanbul property in the winter, this becomes a little more challenging to answer at this point.
However, a few educated guesses can be made based on observation, as well as plenty of anecdotal tales from other realtors and key real estate players.

As protests grip many parts of the world, Turkey has not been immune. The rather intense protests that occurred over the summer have mostly cooled off, with periodic eruptions of smaller events surfacing from time to time. Turkey seems to be experiencing economic convulsions similar to those being experienced in most emerging market economies. The one strong point to date has been tourism. Apart from a slowdown in the early summer months of last year, growth in the sector has continued to be robust and there have not been any signs of this slowing down. Hotels are doing brisk business and there does not seem to be any sign of panic in this sector. It seems that this year will see an increase in tourist numbers, which is a trend that has been going on for a solid ten years. As there is little doubt a correlation between tourism numbers and the number of foreigners who purchase property, overall we could anticipate a continued rise in the Turkish property market by foreigners, particularly given the positive currency factor for foreigners, which I have mentioned in prior blogs.

Of course, the local property market is huge in comparison to the foreign driven market, so it would be wise to include that in the analysis. In mid-December, political and economic upheaval became the order of the day and Turkey raised interest rates in dramatic fashion shortly after. This somewhat stabilized the situation, as the markets were clearly looking for such a decisive step. According to several of the larger developers, the prospect of future higher mortgage rates unleashed a flurry of buying by locals who probably felt the need to purchase before rates became punitive. In essence, these would have been buyers who were buying property to live in and not primarily for investment. This trend can be expected to continue for a while. Eventually, if mortgage rates rise too much, this would lead to decreased demand, though it hasn’t yet shown up in the statistics. It must be remembered that Turks often squirrel away a fair bit of cash before purchasing a property, often using mortgages to supplement their buying power, and not as the majority source as in a large proportion of Western countries. Turks buying a property often will put down 50% in cash, their resistance against foreclosure is therefore relatively strong and consequently if interest rates spiral we don’t usually see the property price crash regularly seen in the Western world. So, as you can see, the property market is a complicated place and it is hard to make sweeping generalizations, as there are some quite country-specific factors that come into play. Add to this that real estate in Turkey has also been a safe haven favorite and why we predict further price rises, may not come as so much of a shock.

The long term prognosis is good, Turkey in general has fundamental reasons backing it’s ability to grow compared with Western economies and the infrastructure has and is being installed to facilitate that, Turkey should well continue to dominate the politics and economics of the region and so long as Turkey finds internal political stability it will have a reserved place at the top table with the big boys.
The short term problem that Turkey faces now is a wave of elections; municipal, presidential and general. All over the next year or so. This is unfortunate. It also happens that many other EM countries are in this election cycle and it is making the crystal ball holders a little less confident than they otherwise might be. The consensus on the street is that the AK party will prevail, though perhaps not without some loss of support. As I was discussing recently with a friend, Turkey is famed in international circles for its brinkmanship. It seems that flare for the dramatic continues to be a trait that dominates.
Oh, and then there is the whole EU-Turkey relationship. But lets save that for another day.

Booming Bomonti

A long-forgotten corner of Istanbul real estate seems to be getting its day in the sun, finally. Bomonti is a central neighborhood of Sisli, just a 10 minute walk from the Osmanbey Metro Station and about 20 minutes on foot to the illustrious Nisantasi, is showing signs of an obvious turnaround.

Location Location

Location Location

Yet, the property prices remain about half of what they are in these adjacent areas, making it an ideal selection for an Istanbul investment property. As many of the trendy and trend setting people who would normally favour Nisantasi get priced out of that area, an obvious real estate go-to zone is the corner of Sisli that is home to neighborhoods such as Bomonti and Ferikoy. Pending where you live it is between 1.5km to 2 km to Taksim, so an easy commute on the Metro or extended walk for those working there or wishing to go there on a regular basis.

In addition to the fluorishing of small, local developers seizing the opportunity to upgrade the existing housing stock, the big players have moved in and developed the Hilton Hotel, Rixos, Anthill Towers, amongst several others. While these towers reach some pretty high prices, in excess of 8000 TL per square meter and more if there is a view, some of the mid-sized projects that offer all the amenities represent good value, at around 5000 TL per square meter. International property buyers, particularly these days who are looking for a smart piece of Istanbul real estate, are starting to feel that there is real value in these prices, especially if they are coming in with hard currency. If a buyer is content to live in an older, but not historical building, and is willing to go for a renovation project, the property prices go down substantially from there, to around 2500-3500 TL.

It is not only the proximity to other colorful neighborhoods that makes this area in Sisli enticing, but also the fact that there is a very well-defined neighborhood feel in the area itself, with an abundance of cheap eateries, bakeries, baklava shops, and much more.bomonti_bit_pazari_flohmarkt002_gk_x_mob

there are not many international-type chain restaurants and bars around, but for many, that is part of the appeal. It retains some of the old Istanbul feel, with enough historical buildings to provide the ambience and character. Apart from the high rise corridor, the rest of the neighborhood is composed of humble 4-5 storey blocks, that when renewed, give the area of chic feel. The pace of renewal seems to also be gathering steam, as you notice while walking the area on foot. There is plenty of construction going on. 5044353053_c7874c5da1The affordability seems to be giving new vibrancy to an area that up until the past few years was a sleepy and forgotten place. Now it is still a nice, quiet contrast to the Taksim and Nisantasi neighborhoods, while maintaining central position.

There is also quite a bit of green space (that hopefully will not get built over!) and that is due to the presence of some attractive graveyards that are filled with pine trees and would make for very nice summer strolls, or a jog for those so inclined. There is also an historical brewery that is unique in this area and was once an Armenian enclave.

By gone brewing

By-gone brewing

Due to its local charm, one wonders that it will only be a matter of time before local artists, internet startups and the like discover the appeal of the area. No doubt, foreign investors, who are often seeking value real estate purchases at cheaper prices than could be found in there home cities,

Old breweries 21st Century style

Old breweries 21st Century style

will see the logic of an option that gives them the feeling of being in the middle of this mammoth city, while at the same time getting some necessary separation from it in terms of reduced noise pollution, human and car traffic.

As an example of the type of boutique compound that is well-priced and offers a high quality finish, check out the Terrace project that offers gym, sauna, indoor swimming pool and a lovely courtyard. Prices for 2 bedroom apartments start from 560,000 TL and there are several alternatives of duplex style apartments, either with an ample balcony or a small garden area. Contact immediately, as there are only a few remaining. The Terrace

The Terrace

The Terrace

Swimming at the Terrace

Swimming at the Terrace

So, with the New Year, there has been a lot of political turmoil in Turkey. However, as an uptick in sales suggest, many who have their eyes on Istanbul real estate see this as a unique buying moment. As the currency has plummeted, many developers are keen to sign on deals, largely cautious about what might be a difficult year ahead. Naturally, this makes it a buyer’s market. One must also keep in mind, that Turkey has seen volatile and drama-filled political periods in the past, yet has mainly been able to overcome them in the end, through some form of dialogue or compromise, though not necessarily prior to some daring acts of brinkmanship of the players involved. Let us hope that history repeats itself and that Turkey maintains the balance and stability that has been the engine of great growth.

2013 Recap and a look ahead to 2014: Real Estate in Istanbul

Surely the big story in terms of foreign interest in property in Istanbul was the increased presence of Arab buyers from the GCC, as well as the other, less wealthy Arab states. Large Turkish property developers have even opened up sales offices in places such as Dubai and Qatar, to handle this demand.

The European buyers, in sharp contrast, were largely absent, due no doubt to economic instability at home and perhaps a lack of insight into what drives the real estate market here.

The Turkish government seems to be welcoming this inflow of capital. The locations are also spreading out, with many buyers seeking locales close to Istanbul, but offering more serenity for summer homes on Sapanca Lake, the Princess Islands and Bursa.
2014 should offer many bargains for foreign buyers, as the battered Turkish lira has seen sharp drops against all major currencies, as have many other EM currencies. Though many might argue that this shows underlying risk, or at least some uncertainty, I feel opportunistic buying and being greedy when others are fearful (according to W. Buffet) is the correct play. There are a handful of very good opportunities in the compounds not far from the city center and some of the central property has seen a rise in affordability due to currency change. The rental yield remains steady at 5-7 %, with high end properties coming in a touch lower than this. This allows the investor a cushion to hold onto a property and wait for a more favorable time to sell and repatriate funds (if so desired).

As Istanbul grows ever more international, it is starting to compete in terms of high-end pricing with heavyweights such as Moscow, Rome, and Barcelona, taking a back seat to only the giants, Hong Kong, London, New York and Paris.

The Armani Macka project

The Armani Macka project

The highest prices, as always, remain Bosphorous view properties or ones in ultra-luxurious high rises such as Sapphire, Zorlu Center and the Armani project, with one penthouse reportedly selling at 20,000 USD/ square meter.

An expensive Bosphorous view

An expensive Bosphorous view

The market is also quite varied, also offering some pretty cheap stuff in areas where mostly local developers are capitalizing on in response to large nearby infrastructural developments (Marmaray Tunnel, Third Bosphorous Bridge and the expansion of the metro system out to Sabiha Gokcen, the second airport). An increasing trend in the urban regeneration has been the deal making between developers and owners, with developers putting up the cash and the know-how to re- construct properties and getting apartments in the new construction in return. Until now, this has been almost exclusively a local effort, as foreigners are unlikely to be able to negotiate these deals and they are not large enough for property funds.

So, while it has been a see-saw year for real estate in Istanbul, 2014 is likely to see more of the upwards and onwards, though tempered,  type of momentum. There may be  certain property types exhibiting bubble-type characteristics, but it would seem imprudent to bet short wholesale against the entire market.
On a final note, it seems every year that I have lived in Istanbul, there has been a noticeable uptick in a certain nationality (often for very different reasons) being added into the mix of purchasers in Istanbul. I remember one year being suddenly inundated with Iranian clients. Then there was the Irish (alas, there was a quick end to that one with the implosion of matters at home). Then the Azerbaijanis, Kazhaks, and other Turkic countries. Last year, as I noted above, Arabs from various countries.
As the weather worsens and client flow is coming to a temporary halt, I sit and wonder what the surprise for next year will be. Chinese? Indians? Nothing would surprise me, as Istanbul is like the ink blot test in that people usually end up finding something they can identify with here, be it in their minds or real. And that should keep Istanbul on the list of places to invest in 2014.

Take a look at our properties that are personally handpicked and vetted by us. We deal in both quality complexes and properties in central Istanbul. www.lillimont-istanbul-realestate.com