Real estate prices go through the roof in Istanbul amid pandemic

By Xinhua Published: Sep 13, 2021 11:28 AM

A potential buyer checks an apartment for sale in Istanbul, Turkey on Sept. 11, 2021. Finding a house to rent in Istanbul, Turkey's largest city, is becoming increasingly difficult due to high construction costs and a remarkable lack of alternatives, according to real estate experts.(Photo: Xinhua)

Finding a house to rent in Istanbul, Turkey's largest city, is becoming increasingly difficult due to high construction costs and a remarkable lack of alternatives, according to real estate experts.

"For the last six months, we have seen huge increases in the prices of homes for sale and rental," Ferhat Ormen, a real estate agent, told Xinhua. "We are constantly revising the prices of the properties we have at hand."

Ormen, who works for Keller Williams, an international real estate franchise company, specializes in real estate properties in the Beyoglu district of the European side of Istanbul. This area, where there are nice cafes and bars, is popular among the city's expat community.

"Therefore, whenever the Turkish lira depreciates against the U.S. dollar, the rents go up accordingly," Ormen noted.

Rents for apartments with one bedroom and one living room in old buildings are currently around 9,000 liras (about 1,063 U.S. dollars). The prices saw a 50- to 70-percent hike during the last six months.

The high prices for rental houses are not limited to this region. Rents have skyrocketed at the same rate across Istanbul, a megacity with a population of over 16 million.

When COVID-19 broke out in Turkey at the beginning of 2020, urban transformation had been in full swing in the city, especially on the Asian side, creating many alternative vacant apartments for rent or sale.

"But since then, the construction of new buildings has slowed down, and lucrative options have dried up," Ormen said, adding that the mobility of people has also considerably decreased due to both the pandemic and high living costs.

"Construction expenses, which mainly depend on imports, increase 30 to 40 percent every six months as the lira loses its value against the dollar," he said.

Rents for decent flats in the central zone of the Besiktas district, once known as the student region because of its affordable prices, are now over 7,000 liras (826.50 dollars) with very few alternatives.

"University students have mostly received distance education for the last year due to the pandemic. But with the start of the new academic year in September, they have returned to the big cities, looking for rental houses," as they will take in-person classes, Muttalip Iscan, another real estate agent, told Xinhua.

In Iscan's view, high selling prices and the high rate of home loans also prevent people from buying a property.

"That is why they mostly prefer to rent rather than buy. The demand far outstrips supply," he added.

Some Turkish people blame the increasing number of illegal migrants for the rent hikes in some places of the city.

In Ormen's view, that could be valid for only some districts, which host many refugees, such as Fatih on the European side.

"Refugees usually rent a small apartment for 20 people, and landlords double or triple the rents in such cases," Ormen said.

According to local authorities, refugees constitute 20 percent of the population of Istanbul, which has recently reached 20 million based on unofficial figures.

Houses for sale are also seeing price hikes.

Last year, a landlord failed to sell her new apartment with three bedrooms in Besiktas for 750,000 liras (88,553.04 dollars) as buyers thought the price was too high. However, this year there are buyers willing to spend 2.5 million liras (300,000 dollars) on the same flat.

"That has to stop at one point because the (high) prices are now irrational and unsustainable," Ormen added.