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"Residential property in Istanbul is still in high demand, with prices still continuing to rise. The Turkey Real Estate Investment Outlook 2012 report from Castle Research shows strong demand for apartments in central Istanbul, and prices for the most desirable off plan apartments have increased from $1,500 per square metre in 2003 to up to $10,000 per square metre.
However Castle is cautioning investors that these phenomenal figures only relate to high-end property in the most desirable central locations, and these figures bear little relation to those being achieved by new developments in the suburbs.
Istanbul suburbs are undergoing substantial development in effort to meet demand, but the continuing supply of new projects is expected to place a cap on resale prices of such property during the next few years.
This has led corporate and individual investors to look towards more upmarket developments in central Istanbul which will give higher rates of return on their money. In the longer term Turkey is expected to see more demand from locals as domestic mortgage interest rates decline.
At the moment the most popular properties are those designed to appeal to young single professionals and business people, and the rental market for such properties is expected to remain strong especially as the format of this type of property is quite new and supplies are likely to remain constrained.
There is also good demand for homes in more traditional apartment blocks, especially as rental yields are often pretty good. These types of properties are being bought by Scandinavian and British investors, although the number of investors from Arab Spring countries is growing, especially as new legislation is expected to make it easier for nationals from these countries to purchase properties.
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