Located on two continents, Istanbul is the largest and most economically developed city in Turkey. In addition, Istanbul is country’s main cultural, historical, commercial and industrial center. With a population of 16 million inhabitants Istanbul is the largest city in Europe and a very attractive location for capital investment. Annual population growth is 3%. Since mid-1990s, the economy of Istanbul has been one of the fastest growing economies of cities within the OECD. And over the past 10 years, Turkey has become one of the fastest growing countries with GDP growth rates comparable to China. According to McKinsey Global Institute research, by 2025 the city will occupy the 14th place in the list of world`s cities measured by GDP (PPP), with nominal growth about $ 291.5 billion. The city accounts for 27% of Turkey`s GDP and 20% of country`s labor force. Istanbul’s per capita GDP is 70% higher than the national average, and productivity is about 50% higher, with Istanbul economy mainly producing high value-added products. About 40% of all Turkish taxes are collected here.
There has recently been strong growth in city`s such industries as mechanical engineering, chemical industry, shipbuilding, glass and textile and food industries. Among factors of rapid development are political stability, transparent business rules, large investment projects implemented in the city, such as: Istanbul Grand Airport (expected to be the largest airport in the world, planned passenger flow: 200 million passengers a year, will serve 350 destinations) or The Istanbul Canal (running parallel to the Bosphorus Strait). Another important factor determining economic growth is a large number of skilled labor force. There are many higher educational institutions in Istanbul that train highly qualified specialists: Istanbul and Bosphorus universities, Bilkent University. In addition, the city attracts talented people from all regions of Turkey, countries of the Middle East, the CIS, Southeast Europe and North Africa. The geography of investors is much wider: Istanbul is attractive to investors of various profiles from Singapore to the US West Coast.
In 2018 Turkey reduced the minimum investment figures for its Citizenship by Investment Program. When buying real estate worth at least $ 250 thousand, the buyer and his family members are entitled to acquisition of Turkish citizenship. Upon purchase for a lower amount, a residence permit is issued for 1 year, which is subsequently extended. Among other things, it is worth noting that today investors in Turkey are exempt from VAT when buying the first office or residential asset. In this case, the object cannot be sold during the year (otherwise you will have to refund the amount of tax). According to Numbeo, rental yields in Istanbul can range from 4.87 to 5.78%. The annual rise in price of the object can bring about another 3% profitability in the subsequent sale of the investment object. In certain periods, real estate value growth reached double-digit numbers. So, in May 2016, growth in property prices in Istanbul was noted 28% year on year (according to Redin). Special attention should be paid to new developments. When investing in such objects at early stage of construction, the yield upon completion can be up to 30% per annum.
Istanbul consists of 39 districts, and each of them has different investment potential. Various property types are presented on the Istanbul real estate market: apartments, villas, private houses and commercial properties. Our team is ready to find property for sale in Turkey which will suit your requirements in any of Istanbul`s districts. Coobrick is your reliable guide to the real estate investment market!
By Zainudin Makhachev