Traditionally, real estate has always been seen as a secure investment. Recessions and other calamities that affect real estate prices, however, are putting that idea to the test and making prospective homeowners and investors reconsider. Although real estate prices generally can drop during recessions and other calamities, home values usually increase over time. Due to high demand and little supply, property values might rise in certain parts of the nation during recessions, which can be difficult to recover in other areas. Given that prices differ throughout cities and even nearby communities, prospective homeowners shouldn't base their decisions just on national patterns. Various factors directly and indirectly impact real estate prices in Turkey; let's have a look at them in this guide.
What Are the Real Estate Prices Based on?
Several variables affect the real estate prices trend, such as the property's location, size, condition, and amenities. The availability and demand for housing in a certain area, as well as other market factors like the general health of the economy, can also affect how much real estate costs. In the end, the buyer and seller negotiate a price for a property, which is dependent on a number of variables that can differ from one property to another.
In a free-market economy, the price of real estate is determined by the terms that a buyer and a seller are willing to accept for the asset. The property's value to the present and potential future owners plays a role, too. Similar to beauty, value is subjective and depends on the individual. To various people, the same property may have quite different values. The buyer's circumstances may determine the value of residential real estate. At the same time, a company's vision, mission, and business goals may greatly impact commercial real estate prices. Most single people prefer to be close to their place of employment and in the heart of the action, which includes pubs, restaurants, clubs, and other gathering spots like fitness clubs. Married couples with young children desire close access to work, safe surroundings, and excellent schools. Retired people typically value secure surroundings, child-free areas, and so on. The key factor influencing the real estate prices of retail stores, eateries, and similar establishments is, of course, its location.
What Affects Real Estate Prices in Turkey?
One may argue that rising housing costs directly result from the economy. The currency exchange rate, inflation, and the construction cost index all contribute to increases in Turkey real estate prices. Parallel with these circumstances, real estate prices will rise until the cost increases can be reversed. During the 2020 pandemic, mortgage interest rates were lowered, which led to a record-breaking summer for home sales. Real estate prices kept rising as demand grew. Increases in cement and iron directly impact the price of real estate, the two major cost factors in the construction industry. The dollar exchange rate is also driving up the cost of materials like wood, glass, and ceramics. Property values ineluctably mirror the high prices. Other causes of rising real estate prices may include:
- The increase in construction expenses,
- Inflation and growth in foreign exchange,
- Price increases for existing homes,
- Following the earthquake, the increase in value of buildings constructed in compliance with the earthquake regulations,
- Individuals allocating their savings to housing,
- Foreigners purchasing homes to become citizens,
- Rising land costs,
- Government support,
- Tightened local zoning regulations.
The effects of inflation, the foreign currency exchange rate, and the rise in building expenses all contribute to the ongoing increase in real estate prices. Both new and second-hand home prices will rise indefinitely unless building input costs can be stabilized. In order to find the best real estate option for your budget with affordable and reasonable prices, contact Nest Invest, where our expert sales team will guide you through the Turkish real estate market.