Monday, January 15, 2024

First up, then down

 First up, then down

 Last couple of years have been quite turbulent for the real estate markets in Turkey and Alanya.

A lot of different topics have been on the agenda and in this blog post we will try to give an overview of the most discussed topics as well as the current status of the market.


Current market status

The first part of the year the market started on a high note before coming to an almost complete stop in terms of sales.

Many like to explain the lack of sales with simple explanations that fit into their own agenda, be it a political, financial, business or private agenda.

The correct explanation is as always not that black and white, and the current situation on the real estate market is not due to just one event, but a mix of several circumstances.


Lets take a brief look at them here.


The perfect storm

In 2022 we saw the perfect storm on the real estate market fuelled by the unfortunate events in Ukraine, Russians deciding to leave their country and settle somewhere else to avoid being called for military service and a market that was already on the rise before the war started.

This led to prices going up by as much as 300% and buyers acting in panic and purchasing whatever real estate they could get their hands on.

Quite naturally we have not entered a quiet period since a peak is always followed by a valley.

Many Russians have decided to leave Turkey again and move on, while those who stay

have already purchased the properties that they need.

Prices peaked at a level higher than what the market can now support, and we are again seeing discounted units and price adjustments on all properties across the market.

The calm after the perfect storm is the main reason why the real estate market in Turkey and Alanya is currently in a limbo without much movement.


But there are also other factors that contribute, so let us take a look at them too...


Resident permits

Currently buying a property is more or less the only way of obtaining a resident permit in Alanya, since applications done on other terms are all being rejected.

Lately new legislation has been introduced making it even harder since the property purchase needed must exceed a value of 200.000 USD.

This naturally limits the pool of potential buyers who purchase a property to obtain a resident permit.

Furthermore some areas such as Mahmutlar, Kestel, Kargicak and Avsallar are still completely closed down for obtaining a resident permits no matter the value of the property you buy.


Short term renting has been closed down

New legislation has also been introduced for those who rent out their properties on short term basis.

Without going into details these new rules make it more or less impossible to rent out any apartment for a period of less than 100 days.

This will obviously hold some investors back from investing in property with the intention of renting it out on short term basis via Airbnb or other short term rental web sites.

At 2Base we do not work with rental properties, but we feel sorry for those businesses and property owners who are doing short term rentals.

Not everyone likes to stay in a hotel, and for them renting an apartment in Alanya for 2, 3 or more weeks is a great opportunity for both the customer and also for Alanya as a city.

This is not possible anymore, at least not in a legal way.

Shame on those who came up with these new laws regarding short term rentals!


So what now?

At the moment the market is in a vacuum, waiting to see who will blink first.

Will buyers return soon to get the momentum of the market back and keep the current level of high prices?

Alternatively, will sellers blink first by lowering the prices so that buyers again find the price level attractive?

Currently our best guess is that buyers have the best cards on their hands and we do not see any indication that a new and larger wave of potential buyers will suddenly appear in the market.

So probably prices need to take another dip until investors start to pick up some bargain properties and end buyers looking for a holiday home at the Turkish rivierra again find the price level appealing and within their budget.


But who knows, things do not always go as predicted in Turkey and in the end things might turn out completely different....

It would not be the first time that the real estate market in Turkey and Alanya took a turn completely different too all predictions... 

No comments:

Post a Comment