Buying a property in Istanbul: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Istanbul's property market is included in our pack

Thinking of buying a property in Istanbul? You're not alone!

Many people find Istanbul's East-meets-West charm intriguing and fantasize about owning a historic Ottoman house or a modern apartment there.

Would it be a smart investment, though? Are property prices increasing in Istanbul? What is the current trend? Should I buy property in Beyoglu or Beşiktaş? Are there any secret taxes? Which places offer rental yields exceeding 7%?

We've solved it for you.

The Investropa team has really dug into this market. As a matter of fact, we've compiled all our findings in one pack. Get it now.

In the lines below, we'll provide you with helpful information.

How is the real estate market in Istanbul?

Are property prices booming or faltering? Instead of relying on opinions, we turn to hard data and stats for clarity

Types of properties

In Istanbul, there are various types of properties for sale to cater to different preferences and needs.

These include apartments, villas, townhouses, and commercial spaces.

Apartments are the most common option, ranging from compact studios to spacious penthouses, available in modern high-rises or traditional buildings. Villas are ideal for those seeking more privacy and space, often located in suburban areas. Townhouses offer a mix of apartment and villa living, typically with multiple floors and a shared community.

For investors, commercial properties like offices, shops, and warehouses are also available.

Whether you're looking for a cozy city apartment, a tranquil villa, or a thriving business space, Istanbul offers a diverse range of properties to suit every budget and lifestyle.

Should you buy or rent?

(If you want to live there yourself and not rent it to others)

If Istanbul is your home or a place you're planning to relocate to, you may be contemplating the buy vs. rent decision in this historical and vibrant Turkish city.

Obviously, it's better to buy if you're looking to build long-term wealth and have a stable home in Istanbul.

Actually, decisions become clearer with the property price-to-rent ratio in mind. This helps you understand the connection between rental income and the property's current price in terms of years.

According to Numbeo, the property price-to-rent ratio in Istanbul is around 18, which is around the world average.

In simple terms, it would typically require 18 years of rental payments, on average, to buy a property in Istanbul. If you plan to stay that much (or even less, since you can re-sell), it's better to buy.

Housing prices in Istanbul

On average, according to the last data from Central Bank of the Republic of Turkey, purchasing a property in Istanbul should cost you around $2,600 per square meter.

Of course, there are notable differences. The value of a square meter for a Bosphorus-view apartment in Istanbul might differ from a suburban villa in Beykoz. You'll get a more detailed in our pack for buying property in Istanbul and in Turkey.

To put things in perspective, it means that, instead of buying an apartment in Paris or London, you can become the owner of 5 properties in Istanbul.

Also, housing prices in Istanbul are 8% cheaper than in Athens.

The most expensive neighbourhoods in Istanbul are probably Bebek, Ortaköy, and Nişantaşı, while the cheapest are likely to be Arnavutköy and Beylikdüzü.

Trends

First and foremost, we have to acknowledge that Turkey is, nowadays, a relatively stable country. The last Fragile State Index that has been reported for this place is 78.1.

Don't overlook this while weighing the pros and cons of buying a property in Istanbul.

Besides that, if we look at the IMF's GDP forecasts, Turkey's economy is expected to soar by 13.9% in the coming 5 years, resulting in an average GDP growth rate of 2.8%.

If you want to invest in real estate in Istanbul it's a good thing because, usually, when the economy grows, people make more money, and this encourages them to invest in real estate, which drives up the demand and prices for properties.

Also, in Turkey, the average GDP per capita has changed by 17.2% over the last 5 years. Very few countries have achieved superior results.

This data is a positive signal - housing prices in Istanbul might soar in 2024 and after that.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Turkey right now.

Buying property in Istanbul

Buying real estate in Istanbul can be challenging due to the lack of reliable and up-to-date information. That's why we have created the pack to buy property in Istanbul and in Turkey.

Buying process

In the pack of documents we have built, we've covered everything about buying a property, from the contacts you'll need to the taxes that need to be paid, and even where to look for available properties.

Now, we're presenting a simpler version to make it easier for you to understand and follow along.

This is the step-by-step process to purchase a property in Istanbul:

1. Research Istanbul's real estate market, considering neighborhoods and property types.
2. Hire a local, certified real estate agent familiar with Istanbul's regulations.
3. Choose a property and request the TAPU (title deed) document for verification.
4. Obtain an "Iskan" certificate, ensuring the property meets building codes and safety standards.
5. Apply for a tax number (Vergi Numarası) from the tax office.
6. Sign a "Sözleşme" (preliminary sales contract) and pay a deposit (usually 10% of the property value).
7. Secure financing through a Turkish bank or pay the remaining amount.
8. Complete the title deed transfer at the Land Registry Office ("Tapu ve Kadastro Müdürlüğü").
9. Pay the property purchase tax ("Tapu Harcı") and the title deed transfer fee.
10. Obtain approval from the military for foreign buyers (only applies to certain areas).
11. Register the property in your name and get the TAPU document updated.
12. Celebrate your successful property purchase in Istanbul, and ensure you have all necessary documents for future reference.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Turkey.

Make a profitable investment in Istanbul

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Where to find a property

Discover properties in Istanbul by exploring these websites:

• Property Turkey - Offering a wide range of real estate options in Turkey, including Istanbul, Bodrum, Antalya, and more.
• Turkey Homes - Specializing in Turkish real estate, providing guidance for property, investment, and lifestyle needs. They offer properties in various regions.
• Turk Estate - A platform offering a comprehensive selection of properties in Turkey, including apartments, villas, penthouses, and commercial properties.
• Turkey Expert - A well-established Turkish real estate agent and property developer guiding foreign property buyers interested in real estate purchases.
• Zingat - A real estate portal offering various properties for sale, such as apartments, villas, commercial spaces, land, and tourism-related properties.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Turkey.

What you can get

As mentioned before, the average price per sqm in Istanbul is $2,600. The cost of a one-bedroom property (60 sqm) is about $156,000, and a two-bedroom (85 sqm) would be around $221,000.

However, property prices can vary because of their qualities and where they're located.

Property prices in the top areas of Istanbul are commonly at a premium. Consider an apartment in Beşiktaş with an asking price of around $300,000, whereas an apartment in Nişantaşı might be priced at roughly $280,000.

Certainly, certain areas are more affordable. You can come across a residence in Esenyurt for $260,000 or a residence in Sultangazi that's only $160,000.

Find a more detailed breakdown in our full pack for buying property in Turkey.

Common mistakes

Here are the main pitfalls specific to buying a property in Istanbul, Turkey:

• Title Deed (Tapu) Issues: Ensure the Tapu is clean and without any liens or disputes.
• Military Clearance: Long delays if the property is close to military zones or restricted areas.
• Urban Transformation Projects: Check if the property is part of an ongoing renovation or redevelopment project.
• Land Registry Discrepancies: Verify the property boundaries and registration in the Land Registry system.
• Non-Turkish Speaker Miscommunication: Language barriers may lead to misunderstandings in the buying process.
• Cultural Differences: Understand local customs and practices related to property transactions.
• Unfinished Construction: Beware of developers who fail to complete construction as promised.
• Residency Permit Eligibility: Ensure you meet the criteria for obtaining a residence permit if required.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Turkey Property Pack

Living in Istanbul

Living in Istanbul is an exciting experience, with a vibrant culture, diverse cuisine, and plenty of opportunities for outdoor activities and exploration.

Cost of living

The cost of living in Istanbul is generally lower than in many other European cities. Prices for food, entertainment, and transportation are generally lower than the European average, making it an attractive place to live for those looking for a more affordable lifestyle.

Here are some examples to better understand the cost of living in Istanbul:

• A "Kahvaltı" (Turkish breakfast) at a local eatery: $8.
• Rent for a one-bedroom apartment in the trendy Beyoğlu neighborhood: $700 per month.
• "Döner kebab" meal at a street vendor: $5.
• "Çay" (Turkish black tea) at a traditional teahouse: $0.50.
• Groceries from the "Mısır Çarşısı" (Spice Bazaar): $40 per week for one person.
• Ticket to Hagia Sophia: $10.
• Monthly membership at a "Hamam" (Turkish bath): $50-$80.
• A bottle of "Raki" (Turkish anise-flavored spirit) at a liquor store: $15.

Neighbourhoods

We like to show information in an easy-to-understand way. So, we made a summary table that lists the different areas in Istanbul. For yields, prices and rents, check our property pack.

Life in Istanbul

Istanbul is Turkey's largest city and commercial hub, with a thriving economy driven by its strong industrial and service sectors. The city has a large and growing consumer market with a large number of international companies and investors, making it an attractive destination for doing business.

If we look at the IMF's data, we can see that the GDP of Istanbul accounts for nearly 36% of the GDP of Turkey. That's nice because a city with a strong GDP makes a good ground for property investment due to its economic vibrancy, indicating potential for job growth, increased demand for real estate, and overall stability in property values.

What expats usually like the most in Istanbul is its vibrant culture and the variety of activities it offers. From the bustling nightlife to the historical landmarks, there is something for everyone to enjoy.

However, the crime rate index of Istanbul, which is around 48, is not great, which is something to take into consideration if you're thinking about living there. Examples of crimes in Istanbul include pickpocketing, robbery, and fraud, which are all common within the local population but generally do not affect the expat population.

Also, you have to know that Istanbul sometimes faces earthquakes and potential tsunamis due to its location near tectonic boundaries.

A good point for a property investor - Istanbul has a mass rapid transit system, consisting of a metro, light rail, trams, funiculars, and marmaray.

Access to healthcare in Istanbul is very good, with a Healthcare Index of 70. A strong healthcare infrastructure always improves the desirability of a location, which is a good thing for real estate.

Finally, it is worth noting that Istanbul has two universities in the top 500 worldwide: the Koç University and the Sabancı University.

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Renting out in Istanbul

If you're interested in buying property not to live in, but to rent out and generate income, this section is for you.

Long-term

Tenant Profiles in Istanbul

According to the data reported by Wikipedia, the home ownership rate in Turkey is 58%, which is not much.

It means that, if you decide to buy and rent out in Istanbul, there will be a lot of people who can become your potential tenants.

If you decide to buy and rent out to long-term tenants, you should target young professionals, students, and expats who work in the city, as well as families who are looking for a more affordable place to live. You can also target short-term tenants such as tourists and business travelers who are in the city for a few days or weeks.

Here is a little summary table we've made for you.

Rental yields

Nowadays, the rental yields you get in Istanbul are between 5% and 7%. There are some opportunities. So you know, a "good" rental yield is above 7%.

In Istanbul, rental yields tend to be highest in the city centre and in areas with good public transportation links, as these locations are attractive to potential tenants and have higher demand for rental properties. Additionally, properties in areas with a low supply of rental housing tend to have higher yields due to the increased competition for available units.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Istanbul are taxed at 27%, which is average.

Short-term

You could also decide to rent short-term to tourists, business travelers, or expats living in Istanbul. Additionally, you could rent to students attending universities in Istanbul or those attending conferences in the city.

If you decide to go with that option, look for properties in Beyoğlu, Sultanahmet, and Taksim; these are some of the most popular areas for short-term rentals in Istanbul.

You will have some competition though - there are around 44,000 Airbnb listings in Istanbul. The average daily rate stands around $70.

You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Istanbul can make around $700 per month. Also, the average occupancy rate is estimated at 52%.

Is it worth buying real estate in Istanbul then?

Certainly! When it comes to buying a property in Istanbul, it's a smart move if you plan to stay there long-term or want to invest in a culturally rich city with a potentially growing economy.

Istanbul's property market offers diverse options, from apartments to villas, making it accessible to a range of budgets. Plus, the property price-to-rent ratio suggests that buying is often more cost-effective than renting, especially if you're planning to stick around for a while.

Additionally, the prospect of earning rental income, with yields between 5% and 7%, makes Istanbul an attractive destination for real estate investors.

However, buying property in Istanbul might not be ideal for short-term residents, budget-conscious individuals, or those worried about language barriers and regulatory complexities. If you're only planning a brief stay or have limited funds, renting might be a more practical choice.

Also, Istanbul's susceptibility to natural disasters, like earthquakes, could be a concern for some. Overall, Istanbul offers fantastic opportunities for property buyers who value cultural experiences, long-term stability, and the potential for real estate appreciation, but it may not suit everyone's needs or circumstances.

Make sure you understand the real estate market in Istanbul

Don't rush into buying the wrong property in Turkey. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.