A mixed picture emerged this week on the state of property prices and the numbers being sold across the country, while Aydin rose back into the top 10 provinces being sought by foreign real estate investors.

Umut Öz

Foreign sales

Overall, housing sales to foreigners fell by a whopping 45.1% in June compared to the same month of the previous year, amounting to 1,440 homes.

Antalya, Istanbul and Mersin topped the list for foreign home sales, with citizens from Russia, Iran and Ukraine being the biggest investors.

Housing sales to foreigners between January to June 2024 also decreased by 45.7% compared to the same period in 2023, totalling nearly 10,500 units.

Aydin picture

According to the data from the Turkish Statistical Institute (TÜİK), housing sales in Aydin province fell sharply, with only 1610 houses sold in June. Sales decreased by 23.3% compared to 2,100 sales in May, and by 24.1 percent compared to the same month last year.

However, Aydın is on the rise in housing sales to foreigners. After a five-year hiatus, Aydın entered the rankings again with 670 sales in the first 6 months and is now ranked 10th in housing sales to foreigners, while the top 3 were Antalya, Istanbul and Mersin.

The Aegean region continues to be a favorite for foreign investors. Along with Aydın, Muğla and İzmir are also in the top 10 in housing sales to foreigners. İzmir is 7th and Muğla is 9th.

Overall, the number of houses sold across Aydin in the first six months decreased by 11.7% – 11,000 units – compared to the same period last year when 12,460 houses were sold, and 16,965 in 2022.

Reaction in Didim

Reacting to the latest property news, Didim Realtors Association President Umut Öz said: “Housing and land sales in Didim decreased by 30 per cent compared to last year. The main reason for this is that banks give over 50 per cent interest. Instead of buying a house, citizens invest their money in interest in the bank and rent a house.

“In addition, housing prices rose all over the world with the pandemic; however, Turkey was the country where housing prices rose the most in the world. House prices in Turkey had risen far above their real value. Due to this big decline in purchases, we see that prices have decreased on a foreign currency basis in the last year. And this decline will continue.”

Falling foreign residence numbers

Aydin province’s foreign legion (RP holders) also continues to shrink. In the last 14 months, over 2,200 have left. New figures show that in July 2024, there were 9,724 foreigners compared to 9.750 in May, 10,206 in January 2024, and 11.942 in May 2023.

National property picture

 Housing sales decreased by 28.2% (79,313.units) in June compared to May and by 5.2% compared to the same month of the previous year. From January to June, sales also fell by 3.7% compared to last year’s period.

Mortgage house sales fell by 49.4% in June compared to June 2023, down to 6,813 units. The share of mortgage sales in total home sales was 8.6%.

Home prices decline 15 percent

The annual increase in the Residential Property Price Index (RPPI) continued to slow in May, easing to 45 percent from 48.4 percent in the previous month. In real terms, however, the RPPI declined by 14.9 percent, the Central Bank said.

The monthly increase in the index also slowed from 2.2 percent in April to 1.3 percent in May.

The unit price was 33,460 Turkish Liras per square meter as of May, according to data from the bank.

Elevated home prices and problems with accessing home loans have been long blamed for poor sales numbers in the local housing market.

Rental landscape: All change

The expiration of a 25% cap on rent increases has led to a dramatic surge in rental prices and landlords now are demanding additional guarantees from prospective tenants.

The guarantees, include credit card information, debt research and a letter committing to eviction if necessary. “They definitely want a guarantor,” Rıdvan Akgün, the head of the İzmir Real Estate Club Association, said.

With the cap no longer in effect as of July 1, rental prices have reportedly increased by approximately 65 percent.

Akgün highlighted that while landlords have been unhappy with the previous cap, tenants are now struggling with the sudden spike in costs. “The 25 percent rent increase cap continued for two years. Landlords were unhappy, and tenants were happy. Two years ended quickly. Tenants faced a 65.07 percent increase rate as of this month,” he stated.

The rental market has been thrown into turmoil, with many tenants unable to afford the new rates. “There is desperation. Those who do not get an increase are trying to leave the house. Those who are unable to pay are trying to hold on to a new life. Tenant-landlord problems are getting out of hand,” Akgün explained.

Akgün shared that the price for an average apartment in İzmir now ranges between 15,000 and 30,000 Turkish Liras ($455-$900), with potential increases up to 20,000 liras if the property is empty.

The rise in rental prices is attributed to the high demand for housing, as there is a limited supply of available apartments.