Whilst many of our dear readers will already hold the keys to their fine home here in Turkey others would perhaps still be reflecting about the benefits of swapping their annually recurring fortnight’s hotel room vacation for a fixed abode under the sun; fixed abode as in coming over permanently or at least for the better part of the year.
It is after all a major decision and as a matter of fact for most of us including our very own family a decision for life. Hence is it advisable to relocate to Turkey? Absolutely; although every year is a good year in this regard 2021 and ever more so the first six months appear to become a not to be missed out on opportunity. In case you wonder whether this article is all about arguing to set up shop in Turkey because the exchange rate is more than perfect? No way – that would be unfair to our Turkish friends and neighbors as that very same exchange rate once viewed from their perspective makes holidaying overseas all but impossible. The truth is – property values have skyrocketed in the past decade or so thus even factoring in favorable FOREX data our Turkish sellers are not left in the cold either.
100K per bedroom sales price – same here?
Those of us familiar with calculating London property deals and annual rental yields will remember that at the onset of the New Millennium the rule of thumb was 100K Pound Sterling per bedroom. Hence, looking for a 2 bedroom flat you would need to invest at least 200K, of course more in the center or in a luxurious estate. As a ten year return on investment was standard you would need to rent out your property for around 1660 Sterling per calendar month.
As a single studio in the Gloucester Road area set you back 800 Sterling, a two bedroom flat at 1600 Sterling was as good as it got. Funny enough, two decades thereafter you can still rent a nice 2 bedroom apartment for the same amount although most would need to spend 25 per cent on top to avail themselves of what they really want, decent but not opulent as they say: 2000 Sterling and the contract is yours.
Needless to say impossible for all mere mortals like myself, for all nurses and policemen and policewomen, teachers and small shop owners… the figures are simply shared to allow for a better comparison with Turkey and the southern Aegean in particular.
From 160K to beyond 400K in a decade
In the United Kingdom the average house price value and accounted for the past decade rose by 33.7 per cent whereas in the capital it hit the 72 per cent mark (data courtesy of thisismoney.co.uk, lifted today whilst penning this article). But it seems as if correspondent rental expenditure did not follow suit.
Here in Turkey the property market reacted differently. This time around no need to check for aggregated data – please allow me to mention my personal experience coupled with a fair number of friends and family to agree on my observations.
The increase in property value (affecting buying and selling price tickets most naturally) hovers around the 150 per cent mark, no kidding when measured same as in the London example over the past ten years. Interestingly, this is correct for the capital Ankara as well as for Aydin based on formerly 160K Turkish Liras properties now on the market for just above 400K Turkish Liras.
So will this upward trend continue?
Although property prices have risen sharply recently over here today’s FOREX allows us to invest cleverly. It is however expected that at some point after the pandemic during late spring and when markets return to normal today’s rates will be a thing of the past. Sterling to Lira closer to times six or seven, Euro to Lira closer to times five and six and that would be for starters.
Yet the really good news is linked to something different: even if the increase rate in property value drops by 50 per cent in the third decade of this Millennium, i.e. from 150 per cent to 75 per cent (unexpected but to address all skeptics amongst us) we still see figures comparable to one of the world’s greatest financial marketplaces: London. So Turkey must be doing the right thing in this context. It creates value for its citizens, nothing more and nothing less.
And it thus creates value for all her foreign property owners as well!
A check earlier today revealed that a 1+1 on the coast comes in at 225K TL and then it all goes up to 475K TL for a poolside development with a 3+1 layout. There are cheaper as well as much more expensive options available of course.
Buy to live in, buy to live in part-time, buy to rent it all out and retire at a later stage? The choice is yours but here is my final piece of friendly advice: ‘when in Romedo it as the Romans do’- exactly. We found our apartments via Turkish contacts and neighbors and real estate agents not necessarily specializing in and for the overseas buyer’s market. Very often this enables a fairer price overview as we would buy along the same income and disposable income levels as the locals do. In particular whilst renting before owning (Istanbul as case in point) this allowed us to save quite a nice amount.
May I wish all of you a happy first month of a new year which will eventually bring us back to normality; stay safe, yet enjoy Kusadasi and the wider region, too!