Real Estate in Istanbul

Urban Transformation, Syrian Refugees Boost Istanbul Rent Prices

The drastically increasing demand for rental real estate stemming from urban transformation and increased population with Syrians who fled to Istanbul to survive has caused rent hike in the megacity
Istanbul Realtors Chamber President Nizamettin Aşa believes that prices of rental houses in some districts of Istanbul have increased in the last six months due to urban transformation and Syrian refugees. “Because of the density in some districts, currently you cannot rent a house for TL 1,500 which you could previously rent for TL 1,000,” said Aşa.

He said that foreigners, especially Syrians, have created a high demand for rental houses which have increased prices in some districts. “There are not many quality houses left. We can describe the remaining houses as either average and bad or luxury houses. Houses which are affordable to the middle class are not easy to find. Districts where the prices were TL 500-600 have now been raised to TL 800-900.

Stating that house prices in some districts which are far from the city center increased relatively, Aşa said that in districts where urban transformation was taking place in particular, a sharp increase in real estate prices was observed. In addition to emphasizing that demands on rental houses have increased in Kartal, Kadıköy and Maltepe districts on the Anatolian side due to urban transformation, Aşa added “Even if citizens whose houses are subject to urban transformation have to move temporarily, they don’t want to go far away from their neighborhood. Besides urban transformation, house prices will rise again when students start to look for rentals before the new academic term begins in September.

Aşa said that, on the one hand, the demand on houses for sale is increasing but on the other hand people have trouble finding rentals. “The solution is to turn unsellable houses into rentals. The current price increases and demand on rental houses will not continue. After urban transformation, housing oversupply will be observed. Because a householder gives his three-storey apartment to a contractor who builds a five- or six-storey apartment in the place of the previous one. When rental house stock increases, demand on rental houses will decrease within five years. The main reason for the difficulty in finding houses is we have newly began urban transformation and people don’t know what to do. Syrian people keep coming to Turkey. Although they settle in almost every district of Istanbul, they mostly prefer Bağcılar, Güngören, Aksaray, Esenler and Fatih, because those districts are both near the city center and relatively cheaper. Although prices of rental houses in those districts were around TL 600 eight months ago, today they are rented for TL 900,” stated Aşa.

Aşa noted that Beşiktaş, Kadıköy, Bakırköy, Fatih and Zeytinburnu are the districts where people have had the most difficulty in finding rental houses and that student wave in September will further increase the prices. Aşa said that the problem of finding a rental house would continue for the next five years. “Demand on houses for sale is not high. Because demand is about to reach saturation point and there are many house construction projects across Istanbul. They all are very luxurious and very expensive. There are not many houses addressing the middle class, in other words actual buyers. Therefore current projects are not in demand.

Moreover, those new houses are very far away from the city center and people don’t want to go there. That’s why, prices of the houses located at the city center increased,” remarked Aşa. “A decrease in housing loan rates doesn’t increase house sales because prices are very high. High housing loan rates doesn’t have much effect since reshaping loans are possible. But finding an affordable house is not that possible. The important thing is to find a house at a suitable price rather than a low loan.