The impact of inflation on the real estate market in Türkiye 2024
Financial inflation is one of the factors that greatly affects all economic sectors, including the real estate market. Despite Türkiye’s economic activity and its strategic and tourism importance, it is still experiencing one of its most prominent crises in the field of economics, which is inflation and the decline in the level of the Turkish lira. Therefore, in this article from Ebla Real Estate, we will provide a guide on the impact of inflation on the real estate market in Türkiye 2024.
An introduction:
As Turkey faces economic realities in 2024, one of the significant challenges influencing its financial landscape is inflation. Inflation, the rise in the general price level of goods and services over time, has far-reaching implications, particularly on the real estate market.
Despite the rise in real estate and house prices, sales, especially to foreigners, increased by 20%. This indicates that the real estate market, despite the economic confusion, is the best way for investment.
The impact of inflation on the real estate market in Türkiye 2024:
Inflation in Turkey witnessed a significant increase during the past year, which was reflected in the rise in the value of various goods, materials and needs, including real estate. Inflation has positive and effects on owning and investing in real estate, which are:
Positive effects on owning and investing in real estate market in Türkiye 2024:
Increased demand for real estate:
Sales of apartments and residential houses by customers and investors increased significantly. They prefer the real estate ownership to save money and make profits.. Especially the foreign citizens who saw that this sector a guarantee for their money from any potential losses.. As well as benefiting from exchange differences while converting foreign currencies into the Turkish lira. In addition to obtaining many privileges, including Turkish citizenship.
Real estate prices rise:
Financial inflation led to a significant increase in real estate prices, which contributed to achieving high profits from owning a property and reselling it.
Increase profits:
Inflation and the rise in apartment prices contributed to an unprecedented increase in rents. In light of the urgent need for accommodation, homeowners were able to achieve high incomes by investing in rentals.
Negative effects on owning and investing in real estate market in Türkiye 2024:
Decrease in demand for real estate by Turkish citizens specifically, due to their dealing with the Turkish currency, in contrast to foreign investors who benefit from the exchange difference after converting their currencies to the Turkish Lira.
High construction costs due to the high cost of materials as a result of inflation. That leads to a decrease in the number of new urban projects and an increase in the value of residential real estate.
Difficulty in obtaining loans and real estate financing as a result of the decline of the Turkish lira, which creates fear among financing parties that the Turkish Lira will lose its value.
Expectations about the impact of inflation on the real estate market in Türkiye in 2024:
It is difficult to say with certainty what the real estate market in Turkey will be like in 2024 due to inflation. However, based on the data and prominent events, we can expect the following:
- Comprehensive and practical government measures to reduce inflation to an extent that benefits economic sectors, including the real estate market.
- The continued increase in demand for real estate, especially by foreign investors, which supports public projects and other economic fields.
- The increase in the value of investment properties, leading to huge profits from real estate projects.
Edited by: Ebla Group Real Estate
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