Rental Prices in Turkey Skyrocket During Pandemic in 2021
The Turkish economy struggles through years of extreme inflation, stagflation, and devaluation of the Turkish Lira. This constant instability and rise in prices affect both the producer and consumer within the country. Over these situations, COVID-19 Pandemic hit the real estate market differently. Pandemic created a halt in all producing sectors including construction. Month by month, demand in the real estate market rises though that the constructions have stopped due to lack of investments.
Supply-Demand Chain is Broken
In the whole country, especially low-class families and students are in shortage of decent options to accommodate. Finance experts say that the supply-demand chain is broken. There is not enough house to satisfy all the demand in the market. Especially in Istanbul, current constructions are not even near enough. Istanbul is an officially 16 million populated city but all the students come from other cities, unregistered population, and refugees make it over 20 million. This leads to huge demand even can not be satisfied under normal circumstances.
Construction Costs are All-Time High
From steel to concrete, executive costs to landed property costs everything is skyrocket thus the construction companies hesitate before investing. This leads to the current demand for current real estate. Inflation numbers are getting higher year by year by both the producer and the consumer. The weak situation of local companies and devaluation of the Turkish lira creates a market vacuum for foreign investors. The Turkish Government promotes foreign interventions by making the process more affordable.
Owning a Real Estate Property Has Never Been So Profitable
Official figures clarify that rental prices overall at least 40 percent rose in the last year in Istanbul. Some neighborhoods have this figure up to 300 percent. A couple of years ago, amortization of the property cost was equal to 25-30 years of rent. This equation drastically down below to 20 years in Istanbul right now and will not stop going further down in near future. In addition to this, the Turkish economy and Turkish investors are in shortage of cash to acquire real estates properties thus while competition for rental climbs up, owning for property goes down. The future is no different. Istanbul still attracts thousands of people to itself and accommodation is the greatest issue for students and low-class families. Near future indicators shows us that demand for rental options keeps rising while supply is stagnated. Local and foreign investors consider owning a property in is Istanbul quite a profitable instrument.
Scientists have unanimous opinions on the earthquake will hit Istanbul and the neighboring cities very soon. As a thousands of years old city, the building stock of Istanbul is quite old. That pushes demand to new build, scientifically approved projects. Many of the dwellers leave their old and unapproved houses to new-build houses that they can sleep in peace whatever the cost is. An earthquake will shatter the whole Marmara Region to its roots and weak and old constructions pose great damage to the population.