The pulse of the market: Spring 2016 Istanbul

This is shaping up to be quite an unpredictable year for Istanbul property. Those familiar with the Istanbul real estate scene will know that this is not exactly a new phenomenon. One of the biggest surprises so far has been the dramatic crash of the Airbnb and short-term tourist rental market. In the past several years many people made extraordinary returns renting out their property in Istanbul to tourists on a short-term basis. This year, however, it is quite a different picture all together.

It is actually just a classic example of supply and demand  mismatch. There are a few other factors that are adding to it and exacerbating this seriousness of the decline. Unfortunately in the past years they’re just have been so many hotels built as well as so many Istanbul property owners who have looked to short-term rentals as a nice way to increase their overall yield on a property as well as to enable them to use it from time to time.

is this a new dawn for Istanbul property?

is this a new dawn for Istanbul property?

Several years ago I predicted that this was inevitable and I was surprised,in fact , that the good times went on for so long. I knew young people, often students, who were renting out flats for the purpose of sub letting them out to tourists. In fact, it became quite a trend. As the number of tourist rentals exponentially, the demand at the same time actually began to show signs of tapering off. Istanbul is a huge tourist draw and the number of tourists coming here yearly is breathtaking.

where have the Europeans gone?

These guys are taking a break from Istanbul

The issue is that the competition between hotels service Apartments grew while the number of tourists who opted for short term apartments actually decreased. Many tourists come from the Middle East and other regions of the world where the idea of renting somebody’s personal property is not widespread and, in fact, may even be considered  peculiar.

The European tourists are the ones who actually prefer the conveniences and flexibility offered by serviced Apartments. But their numbers have been declining for the past few years for a number of reasons.

I think that this is unlikely to change fundamentally over this short period. It looks like it will be a classic boom-and-bust cycle with the weaker operations getting weeded out and perhaps the stronger ones getting more market share as the others are forced out of the market. This could take a few years to play out. It’s not an overnight thing. The areas I am referring to are in downtown Istanbul so they are likely to rebound when the supply and demand issue works itself through the system.

What interests me more however is how it interacts with Istanbul property prices in the downtown area. The first thing that I noticed almost immediately in the past few months was that so many more properties in Istanbul came back onto the long-term rental market. It was literally a flood. And these are Apartments that have been well decorated, furnished and designed in order to appeal too wide range of tourists. The demand for rental properties in downtown Istanbul is pretty steady and strong. At the moment though this glut means that many properties that would usually be quickly snapped up remain empty for much longer then they would have been in the past.

Many Istanbul property owners are frustrated by this turn of events. Some have to pay mortgages and the lack of income generated no doubt creates stress. For this reason as well as many others it is not a big stretch of the imagination to conclude that quite a high number of those people will decide that it is time to cash in and sell their property in istanbul possibly in search of higher-yielding properties.

Is this all bad news? Not necessarily. The people who ran good short term rental businesses well may actually benefit from this in the future but they will have to be patient of course. The other very positive aspect is that house prices really have become artificially high in the downtown area. Many of the owners do not understand that the prices far exceeded affordability levels. Prices of $4,000 or $5,000 per square meter for properties with no particular outstanding features are just too high given the fact that interest rates are also very high.

This has created an environment where very few transactions are actually occurring. People involved in the market understood this well and were waiting for some event to break the log-jam. The dramatic free-fall being witnessed in the Airbnb scene looks to be exactly that catalyst.

Homeowners in downtown should not fret too much. Many of them have made exceptional returns and should be pleased with the investments they have made. Many also have  lovely properties and will not sell under any circumstances. And this in no way will cause a crash in prices. It will just mean that some people will make the rational decision to cash in on investments and perhaps try something new. This will create buying opportunities.
Over the mid to long-term, Istanbul is an exceptional place to own  property. Owners will just have to get used to the new reality and reduce their rental prices or their asking prices when looking to sell.

There are still enough buyers out there that they can certainly sell their properties to. Conversely, for new buyers it does represent an opportunity indeed. Also for many young people who have effectively been locked out of the market, this may be their moment to get on the ladder and own a home. In short the last few years represented a slow down in investments in the downtown area. What is happening these days may actually spur new investment, as investors see price levels that will be very tempting.

Being such a rapid and dramatic occurrence, I am very interested to speak with anyone connected to real estate in downtown, in order to brainstorm with a view to coming up with solutions to combat the adverse effects of this sudden new reality.

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


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’.


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  -

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.

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.

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).

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!

Developing Property in Istanbul

Buying a property for redevelopment and with an eye for a quick turn around for profit has become much more challenging in most real estate markets, if not worldwide, over the past few years.

But one must believe that opportunities do indeed exist, though perhaps scratching further beneath the surface is required. When real estate markets are on a gradual rather than steep incline, it has to be accepted that value has to be added to the property through renovation works. And these works have to be carried out with a view to whether or not they will provide or enhance the return to be achieved. Take a look at this link for a cracking example of a good re-development 

Most small developers in Istanbul property target somewhere from 20-30 percent return on a project. Those who hold out for more will often be disappointed as a result of their too-high expectations. My feeling is that any project where you feel there is a reasonable prospect of a 20 percent return, with say a ceiling of 30 percent, should be seriously considered. Keep in mind that small projects, such as an istanbul apartment or townhouse renovation, can be completed well within six months. This property was sold a few weeks ago and there’s a great refurbishment planned!

So, what are some of the keys to a successful development project?

1- you must buy at the right price. This may sound too obvious to mention, but if you can pick up a property in Istanbul at market, or even ten percent below, you are well on your way.

Do not hang about!

Do not hang about!

Conversely, you will be stopped in your tracks if you initially over pay. Hunting is required to find such opportunities, and when you have found one, it is best to move quickly, as there are always those seeking properties to flip.

2- the type of property you buy should have a fairly wide appeal. Properties that have a very limited audience will take much longer to liquidate.

Brutalism is great for 0.0001%.

Brutalism is great for 0.0001%.

So, before any purchase is undertaken, you must take into account who will be the end buyer and are there enough end buyers to justify a purchase. It is best to avoid anything too marginal, such as basement properties or properties without sufficient light. Buyers usually shy away from these no matter how tasteful the renovation.

3- If you have bought a property at below market price, there is a good chance that the common areas in the building will be scruffy. It can take 6 months or more to organize painting of stairwells etc, if you are dealing with all individual owners. You will have to organize meetings and collect payments. If you are looking to move your property within six months, this may not be practical. It might be advisable to take on an additional burden, say anywhere up to 50 percent of the costs of painting stairwell, facade, and some other cosmetic works. If you inject 10,000 tl into the works and collect 10,000 tl more from the rest of the owners, you will have plenty of money to make some very positive change in a slightly run-down property. Although it may not seem fair, you have to consider that you are pushing the works in this time frame, and that you are doing it with a profit motive.

For every dollar you put into a building, it seems that you get two in return. It is a very worthwhile thing to consider. Obviously, larger projects, such as installing a lift or structural works should be undertaken with more unanimity amongst the owners.

4- pre-marketing during the renovation stage can be quite useful. This is controversial with some developers who like to have complete control and only fix the pricing after the works are completed. But if you are dispassionate and are just focussing on your target, why not entertain such sales? Amongst the benefits of this are that it may give the buyer an opportunity to customize the finish, it can significantly reduce the time in which your funds are tied up (meaning a higher return), in addition to the fact that buyers often get excited by works in progress, letting thier imagination run with things a bit.

5- It is best not to over price the final product. If you are very confident in your product, and you believe it can achieve that magical number of 30 percent return, then just add a little bit on to the asking price, recognizing that you will have to at least negotiate somewhat.

Also, if you get offers that give you a decent profit, weigh the benefits of holding out for a higher offer. Will a higher offer come through? How long will you have to wait?

Don't hold out too long

Don’t hold out too long

Might it not be better to move on to another project, having achieved success on the current project and having gained experience to help you on your next project?

In the next blog piece, Istanbul real estate with redevelopment potential will be introduced.

But if you cannot wait that long, feel free to email me!!!

The Grandfather of Galipdede Street – an Istanbul Real Estate landmark.

Few buildings in the Beyoglu neighborhood have been more photographed than Birlik Apartman on Galipdede Street.

The Pink One

The Pink One

As waves of tourists saunter down from the street that connects Istiklal to Galata Tower, I stand on the balcony of a second floor flat in this landmark Istanbul property and chuckle to myself how many people stop to take a photo of this unique property. The pink facade may have a lot to do with it. But obviously its corner position, unique turn of the century Greek architecture, and its apparently triangular shape fire the imagination of the traveller. Despite being in need of a facelift (which the building management is actively seeking to bring about), the faded beauty of the property is undeniable.

Personally, I have had a long association with this Istanbul building, and was once even the manager for six months several years back. I have also sold, managed and rented a good number of apartments in the building. I have several friends in the building and visit there almost daily to get freshly squeezed orange juice from the bakkal on ground level (for a buck and some change).

To die for?

To die for view ?

I once even coordinated the shooting of a Coca Cola commercial from the fabulous terrace that offers arguably the best views in the city, where I witnessed a photogenic young American couple having their wedding bash on a night of unrivaled beauty. I hope the subsequent years went as well as that night did for them.

to die for 2

to die for 2

During my ten year association with this property, I have witnessed the flow of tourists rolling down the street on the way to the stout and formidable Galala tower of Italian inspiration, the most iconic monument of Istanbul.


The nearby shops, once exclusively selling musical instruments from electric guitars to ouds, balamas and the even more obscure music making devices, now has frisky cafes with specialty coffees, bespoke clothing stores, hostels, boutique hotels, and local eateries.

Tin Pan Alley

Tin Pan Alley

Music and instrument shops are still the mainstay, and expect to see and hear lots of impromptu music sessions that spill out onto the streets.

Local cafe scene

Local cafe scene

Of course, being so familiar with the area, I know the price history of the properties extremely well. I have seen them go from 1000 euro (per sqm) to 2000 and then to 3000 in the space of the last seven years or so. With excellent views, these prices are near enough double. The next stop for a property with sought after high ceilings, original features and good light seems inexorable; 4000 euro/sqm. Fully restored buildings with elevators, panoramic views and prestige seem set to crash the 8000 euro mark. The supply chain of these on the market is very light.


On the fourth floor of Birlik (walk up at the moment, though elevator shaft exists) we currently have a great property at a great price, it is on the market for 1.2 million TL (approximately 400,000 euro). The owner, an affable engineer, has been living in the property for over a decade, and is planning a move to the nearby Princess Islands. At 150 square meters, this property originally was a three bedroom. The owner thought it so spacious that he made it into two separate units, one of which he uses for living and the other as a rental. It could quite effortlessly be brought back to the original floor plan. A careful restoration would reveal vaulted ceilings, wall paintings and original wide plank wooden flooring. As if more were required, one side features partial views of the Bosphorus, while the other looks onto the Golden Horn; psychedelic!  Please click here to view the property 

The property itself is in excellent condition; however, to maximize rental income, which could reach 2000 euro plus, a modernization would be required, at an estimate 30,000 euro. This money would be well-spent, as it would put this property in another league on re-sell. Offers approaching 1.1 million have been made and the sale of the property seems imminent. The prime location, views and size make this a relative bargain and a much sought after property.



Despite all the hoopla in the neighborhood and for this building, one of the owners, a prominent Italian artist refers to it in mutevazi (humble) terms, as the little “Pembe Ev”, or the Pink House. Fair enough. I just hope they don’t change the color, pink being the perfect counterpoint to the gothic sublayer in Galata.

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.

Cihangir with a sea view and more…

In this week”s blog, I would like to turn my attention to a property in central Istanbul that has caught my eye recently. It is always nice to discover a new bit quality of real estate for sale and especially one located on one of Cihangir’s quietest streets, and with a view to match.

Quite neighbourhood

Quite neighbourhood

The property is on Batarya Street, which is very close to the famous Firuzaga Tea Garden and and the Firuzaga Mosque. In addition, there are dozens of cafes, boutiques and restaurants within less than 200 meters. For those of you who like a morning stroll, you can catch a wonderful sunrise at the park just down the hill fifty meters. So, obviously the location in the midst of Cihangir, yet in a serene side street with little traffic is much to be desired.



Sea view properties are always at a different level than their peers, often commanding easily 50% more than comparable properties without the view. Although the view on the Batarya property is not panormaic, it is certainly quite wide, and from the living room and the extensive 12 meter balcony, it offers a very beautiful shot of the Bosphorous and the historical peninsula, and even Galata Tower to the east.

What a view

A view to die for…happily!


The building itself is about 40 years old and is in quite decent shape, with the property being an easy one flight walk up. There is also an elevator in the building.
The expansive 55 sqm living room could be enhanced by opening up the kitchen which is currently being separated by a non-structural wall. This would allow for an open kitchen plan where you could take in the view while preparing the evenings repast.

In my experience, this is the ideal property for refurbishment, as the work involved is mostly cosmetic and does not involve heavy construction and could be completed in two months or less. As the apartment has not undergone an extensive refurbishment in the past 20 years, it is probably due for this treatment. Of course, many buyers enjoy this process because it gives them the opportunity to select the materials and the finish according to their tastes.

The property asking price is 1.4 million TL or approximately 700,000 USD. Given that it is 150 sqm (3 bedrooms), this puts the price per square meter at under 5000 USD, which is very much in line with properties with this view and location. The owners are keen to sell so will entertain sensible offers.

Put a designal stamp on this and you’ll have one of the best places in Istanbul

The typical buyer of this kind of property would be a young Turkish couple or a foreigner, with some people looking to make it a home and others looking to achieve a decent rental income over the long term (in this case, with a tasteful redecorating, 5-6% is quite realistic).



If you’re interested follow this link for details -Lilimont Cihangir Topkapi View