Napoleon once stated, “if earth was a single state, then Istanbul would be its capital.” Napoleon’s words ring even truer today for those who have visited or lived in Istanbul. Positioned on the European and Asian continents, Istanbul is divided by the famous, romantic, and sometimes tragic Bosphorus Strait, hence why many novelists have spent their time within the city walls to draw inspiration.
Now, on to the geographics of this often-times misunderstood community. On each side lie sprawling and historic neighborhoods, boasting bazaars, historical sites, watering holes, and most importantly, 20 million residents that call Istanbul home.
Due to the massive population explosion of the late 1910s and early 2000s, Istanbul is currently experiencing massive regeneration to upgrade the homes thrown together to support the city’s rising numbers.
Whether the historic areas of Sisli, Kadikoy, Umraniye, Beyoglu, or Zeytinburnu, transformation is taking place at breakneck speed. This is much to the delight of the long-time Istanbulites who are tired of the overcrowding and lack of space for their leisure time.
Istanbul is one of the worlds largest metropolitan cities. Made up of 27 urban districts, they are split between Asia and Europe.
On the European side there is:
In Asia:
Here at Prime Property Turkey, we focus on areas that have a few critical indicators for a successful investment.
1. Supply vs. Demand – There is a reason this is one of the first economics principles taught in universities across the world. However, we take this one step further. We focus on your goals and initiatives. If you have a 15- year exit strategy, then maybe an oversupplied new regeneration is precisely what you are looking for. Understanding your goals is key to us providing the best property with the prime result.
2. Annual ROI vs. Capital Growth, which one is more important? Well, that depends on each situation. While some need more for their immediate bottom line, others choose to draw median returns in hopes of capturing more significant capital gains.
3. Is this a lifestyle, holiday, or purely investment purchase? These three different types of buyers dictate our strategy and advisement. At Prime Property Turkey, we believe every buyer is different in their own right and thus should have a customized and tailored plan of attack to suit their needs.
4. Risk vs. Reward…. This is frequently misunderstood, as property leaves you with fewer risks than the latest short stock or international equity. However, there are specific opportunities in the market where more risk is involved. We perceive these risks as under-development properties that can be bought at grassroots prices yet are a year or more away from delivery.
The risks are obvious, but history has shown that gains of up to 40% are possible when the project is completed. While this option isn’t for everyone, it is a legitimate option depending on the client’s needs.
Now that we have touched on Istanbul, the geography, and our principles, let us look at some areas and how we categorize them. Many agencies may claim certain areas to be zones 1, 2, and 3. While very basic, they categorize the importance of each zone, with three being the lowest.
At Prime Property Turkey, we categorize each zone by what it offers rather than how much money we stand to make. A keen investor would catch such remarks, but the “market insiders“ cover their tracks quite well.
This includes the neighborhoods of Avcilar, Beylikduzu, Buyukcekmece, Esenyurt, Basaksehir, and Kucukcekmece. This area we categorize simply as the “West Side.” These areas offer options suitable for holidays, lifestyle, and investment. However, it goes back to our critical indicators to how it best fits your goals.
A quick look at the inventory will tell you that there is somewhat of an oversupply of properties. What it fails to tell you is that it is one of the most heavily invested areas in Turkey. Why? Price….
Properties can be purchased here at fractions than in other parts of Istanbul. When discussing strategy and investment, this area offers yields on par with most other areas of Istanbul, but growth will be slower. That’s not to say some significant infrastructural changes cannot bring about immediate change, but this is an area where we should focus for a long-term exit.
That said, excellent options at below-average prices can be had here. Those looking for an investment with some lifestyle attributes behind the purchase tend to buy in this area.
What are the demographics of this area? In areas around the marina and coastlines, you have some of the wealthiest Turkish and international populations within Istanbul. The inner parts are highly urban, with a diverse mix of immigrants from the Middle East and South East Asia to go along with the dominant Turkish population. Many industries relating to food, textile, and manufacturing are here.
Central Istanbul is comprised of the following neighborhoods:
While this ranges from the Golden Coast of Zeytinburnu to the bustling streets of Bagdat Avenue in Kadikoy, Central Istanbul has become more accessible with the recent connections of the Istanbul Metro System.
The furthest corners of Kadikoy and Bakirkoy can now reach Yenikapi within 20 minutes by metro. How has this impacted the market? It has allowed residents who once were limited to only very central areas to move to the surrounding areas, improving their quality of life and offering a more comfortable lifestyle for their families. We love this area for those seeking a lifestyle and investment purchase in Istanbul.
Why is this area a suitable investment? As we mentioned earlier, Istanbul went from around 3 million residents in the 1960s to around 20 million by 2020. Housing was quickly erected to accommodate the growing numbers. With judicial reforms and safety inspections being conducted in recent years, these areas are experiencing mass regeneration.
These new developments offer low prices for otherwise highly-priced properties due to most homeowners having lived in the area for at least ten years or more. Easy access to services, schools, and hospitals continues to drive prices in the area. Additionally, as traffic continues to wreak havoc on residents, more and more are looking to set up in easily commutable areas. These areas have too many positives to list.
To conclude, we should note that entry-level prices are higher than in other areas. This is particularly true with luxury-high-rise buildings in this location, as branding and luxury are delivered to the highest level. While the base level price may put some investors off, this is a fantastic location for those looking for a hands-off approach to investing. Nightly, weekly, and monthly opportunities present themselves in this area for those looking to capture a piece of the tourism pie.
Demographics? Typically, this area boasts a younger and more educated population. The area locals usually work in white-collar positions allowing them to have the expendable income to purchase such properties. However, areas of Beyoglu, Fatih, Kadikoy, Sisli, and Uskudar have large swaths of low-income areas. This is mainly due to a lack of planning for new developments being allowed in these areas, plus these areas are near the service industry sectors that support Istanbul’s millions of visitors annually.
However, we expect this to change in the coming years as the municipality government looks to “clean“ up the area and instill a new version of Istanbul.
Many in the local government wish to see the restoration and recreation of Istanbul in a modern form. We are getting there, which is why foreign investment continues to rise. History is being written in front of us. Where do you want to be when the story is written?
This part of Istanbul is often an unknown and scary area for foreigners and tourists alike. As the American expression goes, “you are often afraid of what you don’t know.” This is very true for the Eastern part of Istanbul. This area has some of Istanbul’s cleanest and most family-oriented coastline neighborhoods in Istanbul. Yet many foreigners have never ventured as far to find out for themselves. Though this is slowly starting to change, it is still a very “Turkish“ area.
Eastern Istanbul is comprised of:
While oftentimes not familiar with folks from outside of the region, Tuzla and Pendik are slowly tabbing themselves as the “Silicon Valley” of Turkey. Many international Middle East, Eastern Europe, and Africa I.T companies are establishing themselves here due to Turkey’s vast numbers of qualified software/network/structural engineers. Where there comes potential, there comes reward, and this area is no different.
This area boasts very-low entry-level prices and large units compared to more central parts of the city. The neighborhoods tend to have been planned following up-to-date laws and prudence. This means less regeneration is taking place here. How is this to your benefit?
Well, in the short term, it honestly is not. However, as the technology sectors and natural appreciation occur, 5-8 years down the road lends itself to significant gains in rental returns, but also capital growth.
We want to take a special mention for our clients and say that this is a very “under-the-radar“ type area. This has the long-term potential be a significant investment; however, patience is key. We love this for lifestyle purchases and those looking to capitalize on low prices and large units.
This is a expectation vs. reality investment. Know what to expect and know what to earn. If you understand and appreciate those factors, this will be a very fruitful investment.
What are the demographics of the area? The area comprises around 40% with a bachelor’s degree or higher. Many jobs related to the IT industry lie here. In addition, this area is a hub of logistics and manufacturing as international and domestic transport are key in these areas.
The area is rapidly becoming more sophisticated as more and more industries enter the market in these regions. Should you want to be waging an investment on long-term growth, we can think of no better place.
Contact one of our friendly advisors who will be willing to advise and assist.
Remember, here at Prime Property Turkey; we aim to “do it the right way“ every time we speak, meet, and buy. Your satisfaction is our number one priority. Our model is built on long-term relationship building and growth. Together, we can become the premium outlet for International Investment in Turkey.
