Estimating the market value of real estate in Turkey

Today, many foreign citizens are thinking about buying property in Turkey. The main reasons for the popularity are the high liquidity of Turkish property and guarantees for legal legalization in an economically developed country for a residence permit or citizenship by investment.

The housing market of the Republic of Turkey is very diverse and provides an opportunity to choose an object for any purpose and budget. The purchase procedure is simple and transparent, which means that a foreign citizen, with a competent, verified approach, can become the owner of high-quality apartments in just a few days.

An obligatory stage in the conclusion of any sale and purchase transaction is an expert assessment of real estate in Turkey. In our publication, we will consider on the basis of what factors the market value of real estate is formed, what is the difference between the market, cadastral and appraised prices, and how Turkish housing is assessed.

Factors affecting the market value of real estate in Turkey

The market value of real estate is the price that forms the domestic housing market in Turkey.

The Turkish resort housing market has its own specifics, so it is quite difficult to get a universal answer to the question of property pricing. Here, each sale is considered individually. For example, apartments with similar parameters may have completely different prices, which will depend on a number of subtle differences and characteristics.

Let's highlight several blocks that affect the market value of Turkish apartments and houses:

Real estate market

We are talking about such factors as:

• Shortage of land plots and their rise in price.

Against the background of active development in popular regions of Turkey, such as Antalya and Alanya, there is a gradual reduction in the number of liquid locations. The shortage leads to an increase in the price tag for land, and hence the cost of finished housing.

• High demand

The constant and high demand from buyers forms the market value of apartments in Turkey. Fresh statistics speak for themselves, according to which 67,490 residential real estate units were purchased by foreigners in 2022, which is 15.2% higher than a year earlier. A large number of people wishing to become owners of quality apartments leads to an imbalance between supply and demand, and hence to an increase in the average price tag for objects.

• Changes in building standards

There are serious changes in the approach of Turkish developers to construction. Developers take into account the trends and requests of investors, the competitive environment, so they build high-quality residential complexes not according to standard, but according to individual projects that attract an increasing number of foreign buyers.

Economic conditions

Of course, various economic factors directly affect the market value of real estate in Turkey. The main ones are:

• National currency fluctuations.

Against the background of the subsidence of the Turkish lira, a natural rise in the cost of housing is noted, which allows foreign investors to earn extra money.

• Rise in the cost of building materials

According to experts, prices for all building materials in the country's housing market have increased by more than 1.5 times.

• Legalization of legal residence for investment.

The cost of Turkish housing is also growing due to the possibility of relatively inexpensive obtaining a residence permit and citizenship on the basis of TAPU. So, you can buy a "golden" passport for investments in real estate from $ 400,000. For a TAPU residence permit, it is enough to purchase a property at a price of $75,000 or $50,000. Regardless of the value of the object, the investor has the right to obtain a tourist residence permit.

• Low tax rates and favorable purchase conditions.

Turkey has low taxes for owners, and they are the same for both local citizens and foreigners. The one-time real estate tax is 0.4% of the cadastral price, the annual tax is 0.2%. In addition, when buying apartments under construction, most developers offer foreigners an interest-free installment plan. All these advantages additionally attract investors and, as a result, affect the cost of objects.

Infrastructure

The market value of real estate in Turkey depends on the infrastructure of the area and the residential complex.

In the first case, pricing takes into account:

• remoteness from the sea and the city center;
• transport accessibility (good interchanges, public transport stops within walking distance);
• The status of the district is prestigious or more democratic.

Housing near forest and park areas, reservoirs, historical and natural attractions, shopping and entertainment centers, educational institutions, medical centers is more expensive. If there are any production facilities, dilapidated residential areas nearby, transport congestion is observed, the cost naturally decreases.

The infrastructure of the residential complex is another important point in the formation of the market price. Most modern LCDs have internal infrastructure in the form of swimming pools, car parking, security, playgrounds, recreation areas, fitness rooms, shops and much more. The more extensive and better the infrastructure, the higher the status of a residential building, the more expensive the object.

Location and quality of real estate

An important role in determining the market price tag for housing is played by the location of the apartments, which includes not only the number of floors and layout, but also the orientation to the cardinal points, the view from the windows. Thus, the difference in the cost of apartments in Turkey with the same layout, but located on the lower floors and on the upper ones, can be up to 50%.

When choosing building and finishing materials, the developer, in fact, sets the characteristics and price segment of the residential complex. In elite houses built using natural and expensive materials, the most modern building technologies, the cost of apartments will correspond to construction costs.

It affects the market value and condition of the apartment. If a home has been well-renovated, it will definitely cost a little more than an object with a too outdated finish that needs updating.

How to find out the appraised value of an apartment in Turkey

Real estate appraisal in Turkeyis a special expert report that reflects the estimated value of the object, formed according to certain characteristics.

The difference between the market and appraised value is negligible. At the same time, the cadastral price has always been noticeably lower than the market one and a half, or even two times. And it is from this amount, according to the law, that a one-time tax on real estate is calculated - 4%. Sellers and buyers, quite legally, could save a lot, but this had a very negative effect on the replenishment of the state treasury.

Thus, from January 1, 2023, the amendments of the President of Turkey are in force, which oblige the Land Registry and Cadastre Office to indicate the cadastral value of objects in TAPU, focusing on the examination carried out by specialists. On the one hand, this is the protection of investments of foreign investors from fraudulent schemes (for example, from unreasonable overpricing of objects), and on the other hand, the ability to fix and control taxation on real estate.

For foreign citizens, this procedure is important when:

• registration of citizenship under the state investment program;
• obtaining a Turkish real estate title or TAPU.

The lack of a certificate is the basis for denying foreigners the right to own Turkish property.

Mandatory real estate valuation in Turkey is needed when concluding transactions for any type of property: apartments in modern residential complexes with infrastructure, detached villas, commercial real estate, land for construction or agriculture.

Expert appraisal is carried out only by certified organizations of the Banking Regulation Agency (BDDK), which are controlled by the Capital Markets Council of the Republic of Turkey (SPK).

The procedure for assessing real estate in Turkey is several mandatory steps to be taken by each buyer:

1. Go to the official website of the General Directorate of Land Registry and Cadastre to register an application. Also, foreign citizens can order an assessment by dialing the phone number 181.
2. Launching a home appraisal through a buyer or real estate agency.
3. Payment for the rendered service. The cost of an expert assessment of real estate in Turkey depends on the parameters of the apartment and is about 3,500–6,000 TL. The amount is paid before the TAPU is reissued.
4. Examination by a certified specialist in order of priority. The specialist takes into account such data as the location of housing and the year of construction, the technical characteristics and condition of the object, the size of the infrastructure and the status of the residential complex, as well as the price tag for a similar property that was sold recently.

Based on the results of the work done, the buyer receives an official document of about 20-30 pages, which indicates the legal form of the object, its location, attached photos, as well as examples of similar housing options with their price, the owner's debt to the municipality and other important information.

The validity period of the expert certificate is 3 months from the date of issuance. After this period, the appraisal will be considered invalid and the procedure will need to be ordered again.

How to find out the cadastral value of an apartment in Turkey

The cadastral value in Turkey is the price of real estate, which is indicated by the Cadastral Chamber in a certificate of ownership (TAPU).

As we have already noted, earlier the cadastral price was almost always lower than the market price, which turned out to be beneficial for both the seller and the buyer. Only in the case of acquiring housing in Turkey for participation in the investment citizenship program, the maximum correspondence of the cadastral value with the market value mattered. Now the cadastral price is as close as possible to the estimated, and hence the market price, and is taken as the basis for calculating lump-sum and annual state taxes.

In order to find out the cadastral value of an apartment in Turkey, you need to contact the Cadastral Department with a full package of documents for a sale and purchase transaction, including an appraisal certificate. Within two weeks, the object is re-registered in the name of the new owner and TAPU is issued to him with an indication of the cadastral price.

If you are planning to buy liquid apartments in Turkey, please contact Nordic Property Construction. We will select a property for you based on your goals, whether it is living or a rate of income from a rental business or a profitable resale.

All posted information is provided for informational purposes only and does not bear a commercial purpose.

Nordic Property Construction is a construction company that specializes in the construction of highly functional housing on the Mediterranean coast. Cooperating with us, you get a full range of services - from the selection of real estate and meeting at the airport to the transaction and property management.