Turkish Real Estate Post-pandemic Industry Analysis
The COVID-19 epidemic, viewed as an unexpected occurrence, differs from previous crises in global history. The pandemic has interrupted the major economies and the banking structure, particularly in developing economies, which have confronted crisis conditions and faced a danger of bigger loss in their financial systems. Construction, real estate, tourism, and finance have been identified as leading and driving sectors in Turkey’s economy. Aside from the financial volatility witnessed in the building and real estate industries, which had a significant supply excess before the pandemic, the tourism, and finance sectors were judged to be in good shape. To decrease both the resource excess and the financial strain caused by the crisis, the government enacted important regulations focused on releasing reduced and long-term mortgage loans from public banks, conducting land registry transactions online, shifting to flexible working orders in both the public and private sectors, restricting layoffs and short-term work allowances during the pandemic period, lowering land registration fees, and attempting to prevent economic bankruptcies. The real estate sector has been hit hard by the economy’s decline in the March 2020 year, and fiscal policy measures to mitigate the negative consequences have been put in place. The impact of COVID-19 on the economy can be seen in the inflation, unemployment numbers, and consumer confidence indicators. During the six-month pandemic period, removal from employment is prohibited, and the Ministry of Labor and Social Security has begun to provide aid to employees through the short-time working allowance.
Additionally, social alienation, remote working, the closure of physical retail, and tight travel restrictions are all having an impact on Turkey’s real estate industry. Self-distancing is being explored in Turkey following worldwide recommendations, several businesses have begun to work online. It results in a rethinking of workplace strategies, such as long-term remote work or adaptable office space with a strong focus on health and safety considerations. There have been 353,847 registered sales transactions (both sales and mortgages) in Turkey up through the end of April 2020. The government’s actions, especially strong control of the circumstances, played the largest role in the formation of these figures. It has been determined that May 2020 might be the month of recuperation and June might be the highest period for real estate sales. Nevertheless, when compared to the prior in 2018 and 2019, there is a 42 percent and a 33 percent decrease, correspondingly. The reason for the difference noticed in March–April 2020 is that market for property investment is nearly at a halt, as well as the launch of applications and the necessity of using digital apps in the registration system and property transactions.
Personal foreign investments have decreased due to travel limitations in the period January–July 2020. The sharpest drop in the pandemic process has been a reduction in foreigners purchasing real estate in the regions of Istanbul, Antalya, and Ankara. Regrettably, the majority of real property procured at the moment is of elevated and eligible housing stock, such as residential properties, and the acquisition cost in the Turkish property market has indeed been lower due to the value of foreign currency rising 2–3 times compared to the national currency, and export market has increased dramatically especially in contrast to the post-2017 period. Throughout the last three years, the country has welcomed 32.4–45.1 million tourists, with an overall capacity of 1.7 million beds in 12,844 establishments (TurkStat, 2020). During the first four months of 2020, losses of 18–20 percent were recorded. Tourists nowadays choose alternative ways such as zero-contact vacations, short-term renting, condominium, and villa renting, and this circumstance will lead to a rise in the informal economy.
Citizens in apartments begin to feel imprisoned in their residences, away from nature, as a consequence of the Covid-19 quarantine situation. It encourages people to look for larger residences, private spaces, villas, or mansions with gardens or extensive balconies, preferably near urban areas or cities. These larger homes provide homeowners with an additional private open environment, extra rooms, and new environment activities such as growing plant-based foods in their gardens or terraces. Furthermore, technical solutions in real estate investigations will assist in the efficient organization, monitoring, and completion of moving activities. Citizens and the real estate industry are preparing for future upheavals brought on by creative technology. In this perspective, intelligent buildings and systems that support minimal contact in buildings are likely to continue to increase.
Whatever the outcome of the pandemic, real estate experts will always be able to discover modern, safe, and improved solutions for future real estate projects. In this circumstance, the demand for suitable private property in Turkey will only increase year after year.