The best place in Turkey for foreigners to invest in real estate

Turkey's real estate market is experiencing some pretty remarkable changes, and as of October 2024, it’s clear why it's turning heads among international investors. Right now, the average property price across the country sits at about $107,679, and properties generally cost around $822 per square meter. We’re looking at homes that are fairly spacious—131 square meters on average—and many of them are quite new, with an average building age of just eight years. This isn’t some old, worn-down housing stock; it’s modern, comfortable living, which is a big plus for any potential buyer.

One of the most impressive things is how much property prices have grown. Since January 2019, we’ve seen a 128.88% increase, which is quite substantial. And if you look at just the past year, prices jumped by 26.31%. If you’re wondering what’s ahead, projections show another 21.41% growth next year. This isn’t a market that’s standing still—it's accelerating, and the decreasing stock (down 9%) only means that demand is starting to outpace supply, which could push prices up even further.

For those considering renting their properties, the current landscape is appealing. Rental yields are averaging around 7.6%, which means you could make a decent return if you plan to rent out your property. The amortization period—essentially, the time it takes for rental income to cover the property cost—is about 13 years. That’s not bad if you’re looking at real estate as a long-term investment. Properties are generally moving within 81 days of being listed, so while it’s not a frenzy, it’s also not a stagnant market; properties are changing hands at a reasonable pace.

Now, one of the biggest factors in favor of foreign buyers is the Turkish Lira's depreciation. Over the past few years, the Lira has lost significant value against both the US Dollar and the Euro—about 546% and 531% respectively since 2019. For someone holding Euros or Dollars, this is a big deal. It means you get a lot more for your money. Essentially, Turkish real estate is on sale at a significant discount for foreign buyers, and that’s something you just don’t see in many other places with the same growth prospects.

And it's not just about high prices or luxury properties. The cost per square meter in Turkey ranges from $453 to $2,070, meaning there's something here for everyone—whether you’re looking for a luxury seaside villa or a more modest investment property. With an average property price of $107,679, Turkey is still affordable compared to other markets offering similar growth.

So, what does this all mean if you're an investor? Turkey is in a sweet spot right now. The rapid increase in property values, the solid rental yields, and the fact that the Lira is so weak against major foreign currencies make it a really attractive market. You get the dual benefit of seeing your investment appreciate while also gaining from a favorable currency exchange. In a world where good investment opportunities are getting harder to find, Turkey stands out as a place that still has a lot to offer.

Istanbul: Dynamic but Expensive and Slower to Recoup Investments

Istanbul is undoubtedly Turkey's largest and most economically significant city. With an average property price of $142,181 and a price per square meter of $1,247 as of October 2024, Istanbul stands out for its high property values. From January 2019 to October 2024, residential unit prices appreciated by 61.32%, and the total value increase over five years was 101.94%. However, the annual growth rate has slowed down in recent years, currently at 27.31% with a forecast of 23.58% for the coming year.

While Istanbul’s growth is impressive, the rapid price surge has led to a maturing market that comes with diminished potential for fast capital gains compared to less saturated regions like Mersin or Alanya.

Amortization and Rental Yields

Istanbul’s average amortization period is 14 years, indicating a relatively longer time required for rental income to cover the property’s cost. The average rental yield of 7.02% is decent but does not outperform other cities like Alanya in terms of the balance between cost and rental returns.

Neighborhoods such as Beşiktaş and Sarıyer boast some of the highest unit prices ($3,405/m² and $3,454/m²), which may be ideal for those looking for prestige and long-term appreciation. However, these come with amortization periods extending up to 28 years—much longer than in other markets like Alanya or Mersin.

Stock and Property Characteristics

With 199,608 units available and a stock change of -9%, Istanbul’s market is tightening but remains well-supplied. The average age of buildings in Istanbul is 8 years, reflecting a reasonably modern housing inventory. However, properties in Istanbul are typically on the market for 86 days, which suggests a competitive but not exceptionally fast-moving market.

Istanbul offers strong long-term appreciation but comes with high entry prices and longer payback periods, which may be less attractive for investors seeking quicker returns and a balanced cost-benefit ratio.

Mersin: Affordable Entry but Moderate Growth

Mersin offers affordable real estate with an average price per square meter of $731 and an average property price of $102,270. From January 2019 to October 2024, property values in Mersin rose by 131.33%, with a cumulative increase of 192.72% over five years. Yet, the recent growth rate has moderated, with a 17.02% increase in the last year and a more tempered projection of 9.85% for the coming year.

Amortization and Rental Yields

An amortization period for property in Mersin is 14 years—similar to Istanbul—along with a rental yield of 7.06%. These figures suggest that while Mersin offers affordability, the overall rental performance is not significantly better than Istanbul, and the appreciation rates are beginning to stabilize.

Market Activity and Characteristics

The average marketing duration in Mersin is 79 days, indicating moderate liquidity in the market. Properties here are 140 square meters on average, offering spacious living environments compared to Istanbul and Antalya. With 23,333 units currently available, Mersin has a relatively low stock ratio of 2%, meaning that the supply is becoming tighter, which could drive moderate price increases in the future.

Summary: Mersin provides affordable entry but lacks the growth momentum and yield performance seen in other coastal cities like Alanya.

Antalya: Higher Prices and Longer Returns

Antalya, as one of Turkey’s most famous tourist destinations, offers properties with an average price of $124,199 and $1,071 per square meter. From January 2019 to October 2024, property values appreciated by 134.35%, with a total increase of 203.06% over the five-year period. Recent annual growth stood at 18.71%, with a positive outlook of 20.63% for the coming year.

Antalya's growth trajectory remains strong, but prices have increased significantly, resulting in a market that may be more competitive and less accessible compared to smaller cities like Mersin or Alanya.

Amortization and Rental Yields

The average amortization period in Antalya is 16 years, which is longer than both Istanbul and Mersin. Rental yields are also slightly lower, averaging at 6.34%, indicating that Antalya may not provide the fastest returns for investors looking to benefit from rental income.

Market Characteristics

Antalya has 50,625 units available on the market, with a stock ratio of 4%. The average building age is 6 years, which reflects a newer inventory that can attract buyers seeking modern amenities. Properties are on the market for 85 days on average, which is similar to Istanbul but longer compared to Alanya, indicating a market that is active yet somewhat slower in comparison.

Summary: Antalya’s real estate market boasts strong capital appreciation, but higher property values and a longer payback period make it less ideal for quick returns compared to more affordable cities like Alanya.

Alanya: The Most Balanced Investment Opportunity

Alanya offers an average property price of $149,335 and an average price per square meter of $1,358. This makes it slightly pricier than Mersin but generally more affordable than Antalya and Istanbul. Over the period from January 2019 to October 2024, property prices in Alanya increased by 139.51%, with a total increase of 192.24%. However, Alanya’s market dynamics are different, with recent annual changes showing -10.61%, indicating some volatility. That said, Alanya offers unique benefits that make it attractive to investors despite this variability.

Amortization and Rental Yield

Alanya's rental yield is 4.21%, which is lower compared to Istanbul or Mersin. However, the 24-year amortization period in some neighborhoods like Dinek and Tepe can be seen as challenging for immediate returns. Despite this, the tourist-friendly nature of Alanya, with strong international interest, supports a steady rental market, making it an ideal spot for those looking for short-term vacation rental income as well as long-term appreciation.

Neighborhood Insights

Neighborhoods like Elikesik, Güller Pınarı, Kadıpaşa, Konaklı, and Cumhuriyet have seen some of the most significant property value increases recently. Areas such as Dinek, Tepe, and İncekum feature some of the highest price points and longer amortization periods, making them suitable for luxury buyers looking for long-term prestige investments.

In terms of inventory, Alanya has 7,214 units available, with an average building age of 8 years. Properties are typically on the market for 88 days, which suggests decent market activity and buyer interest.

Alanya provides an interesting balance—affordable yet attractive properties in a beautiful coastal setting, which is particularly suited for investors seeking a high quality of life or vacation rental income. While yields may be lower, Alanya's appeal as a residential and tourist hub makes it the best option for those seeking lifestyle investment combined with steady rental demand.

Buying New Property vs. Secondary Property for Investment or Living in Alanya

Secondary Property:

• Investment: Lower entry cost, quicker rental income, but may require renovation to meet modern standards.
• Living: Often larger, with character and charm. Immediate occupancy in established neighborhoods, but may come with higher maintenance.

New Property:

• Investment: Higher appreciation potential, modern facilities attract premium rents, and lower maintenance makes it easier for rental.
• Living: Offers the latest amenities, energy efficiency, and flexible payment options. Ideal for hassle-free living with new warranties.

Where to Look for Secondary Property in Alanya

If you're considering secondary property options in Alanya, there are plenty of avenues to explore. Popular online real estate platforms are a great place to start, offering listings in neighborhoods like Mahmutlar, Oba, and Tosmur—each of which has its own unique charm, from bustling community spaces to quiet residential streets. Local real estate agents can also be a valuable resource, often knowing the hidden gems and providing insights on properties that aren't widely advertised. Engaging in local social media groups or real estate forums may help you find private sellers, adding another dimension to your search.

Where to Look for Apartments in New Builds

For those considering brand-new builds in Alanya, the options have never been more diverse. Many of the current new developments feature a mix of contemporary design and amenities that cater to modern lifestyles—think on-site fitness facilities, landscaped communal areas, and prime locations. Developments in areas like Kestel or Oba are particularly noteworthy, blending convenience with scenic Mediterranean views.

One developer frequently noted for its quality builds is Nordic Property Construction. They offer a variety of new apartments for sale in Alanya designed with comfort and sustainability in mind. Their focus on using high-quality materials and delivering well-crafted residential spaces means you can enjoy a modern, low-maintenance lifestyle. Plus, their flexible payment options make it easier for a wide range of buyers to enter the market, whether you're considering a home for yourself or a solid investment in a growing area of Alanya.