Keith’s weekly property News March 27-2022

A few broken deals, a few good ones and a dip into some other areas.
Hi folks. Very brief notes here this week. I am trying to squeeze in a day off to enjoy some of the coastal scenery.
As a long winter finally seems to be giving way to spring, it might be a good time for an overview of what is to be expected in the Spring and perhaps a few comments (or rather, speculation) about the CBI program, which no doubt is of importance for many newcomers.
I see a very slow return to a new norm in the secondary market after the tumult caused by the currency crisis in late 2021. I feel sellers are gradually coming back to the market and the Lira, while by no means feeling comfortably settled, has at least seemed to reside consistently in the 13.75-14.75 band for the past 2 months. I suppose that is the best we can hope for. It provides some visibility and consistency, at least in that time frame of 10 days or so from when we put a deposit down and when we may realistically expect to close. This is vitally important when trying to close deals on the secondary market. Those of you who were with me in December likely recall me whining about the deals collapsing in like dominoes during that period. Even in stable times, such as the past week or ten days, we had several deals collapse, through no particular fault of our own. This a a feature of the landscape on the secondary market where sales often are a family affair, with multiple inputs. Even when it is not a family decision, Turks often wonder if they are letting go of a safe haven asset too cheap. So, for newcomers, you just have to expect this. Up to 70% of the properties we negotiate on never make it past that phase. Maybe they raise the price or pull the property of the market. Maybe the agent is not fully competent or mis-represented the willingness of the seller. In any event, in these cases, we just have to move on. It is inefficient and slows us down and sometimes wastes the valuable time of our clients. We do our best to minimize exposure to this, but it is not always preventable.
In any event, I do not think we will return to a year ago when there were many more options to choose from, but I do expect the spring to be better than the winter for properties coming on the market. I also expect that we are in for a bit of a pause for the increase in prices, though some gentrifying neighborhoods may still plow up further.
Usually the key components needed from the buyer for locking in a good deal are 1-certainty about choice 2- preparedness (deposit money in place, no dangling paper work) 3- working knowledge of the market to the degree where you have matched it up against some comparables.
There does not to be much new in the new build category. Or at least not in Zone 1 or core downtown. I suspect sourcing land has become almost impossible, as has ‘kat karsilikli’ deals when owners make a share agreement with a developer. High rents will only exasperate that, as the developers often make deals where they pay for the rents of owners for up to 30 months during the evacuation and construction stage. Lack of visibility on materials costs might frighten off the more risk-averse developers. Cowboys will always be cowboys though, so I expect some are pressing ahead with ambitious plans. Some caution on “holes in the ground” with flashy CGIs and multi-lingual staff in sales offices is required

As many of you know, I have been spending time on some of the main ports on the coastal trail. The main rational for this is that 10-20 percent of our clients are quite interested in those markets. Having some idea of the pricing and the types of opportunities available seems like a good idea. I will give a short summary of my views on Alanya, Antalya, Bodrum etc. in the zoom session next week. They are all quite specific markets and can easily be highly influenced by idiosyncratic, and perhaps temporary events, such as a sudden influx of Russian buyers and would-be tenants. This means that many of these markets might be on steroids at the moment, so you have to temper the exuberance of the headlines with some sober thought. It does appear, at least for the time being, that rents have actually experienced a 50% increase due the Ukraine conflict. Welcome news, no doubt, to anyone who bought previously. It gives pause for thought, though, for incoming buyers. Are the new prices being asked being calculated with this inflated yield in mind? Resort towns have much different dynamics than places like Izmir or Istanbul. Get on the wrong side of the fad and you could get squashed and it could take years for your investment to realign. No amount of Russians coming to Istanbul or Izmir is going to move the needle much on property prices, but it certainly will in smaller markets such as Alanya or Fethiye.

On the CBI front, I want to state that I have heard no specific or credible news about any changes or termination of the the program. Zero. And nobody will…until there is real news. There is always lots of speculation.
Here are some of my thoughts.
-we may see some regions or municipalities introduce quotas on the percent of foreign ownership. Sisli and Besiktas come foremost to mind. Perhaps Fatih and Esenyurt. Members from our team have openly heard Land Registry officials grumbling about foreigners snapping up all of the property. There have been precedents for these kinds of quotas in the past, in Istanbul as well as many areas worldwide.
-There could be an increase in the CBI amount. It could be a way of limiting the number of new passports being issued, while keeping the currency flowing in. This is a slippery slope, as any meaningful raise in the amount would likely choke off demand considerably. Nonetheless, we must acknowledge that this is likely to be a conversation topic amongst policy makers.
-It seems remote, but possible, that CBI buyers may only be able to buy from new-build projects. The government could easily come up with the fig leaf; Turkey is a seismic region. I put this a bit lower down on the probability ladder, but still probably a point that has been considered.
-They might also impose a quota on percentage of buyers by nationality. This would seem to be a desirable move from the point of view of Turkish society, as it is in a way, an immigration issue. This is standard practice in countries world-wide.
-Eliminating the family CBI. Again, this seems unlikely. However, there could be political blowback if it leaks out into the mainstream press that 15 family members got a passport from a 250K investment, especially if you throw in some fraudulent practice to spice up the headline.
I would be curious to hear anyone else’s thoughts on the above or other possibilities that I have not mentioned.

Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.

We invite you to join us for:

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On Sundays at 20:00* Istanbul time
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This week, I will spend a bit of time going over a few thoughts about pricing, as it is one of the most important aspects of my work. It is also the most challenging, as the sands often shift with rapidity, especially in a megacity like Istanbul that also sees no shortages of surprise events on the political, economic, and social side of things. The task of really nailing down sqm pricing is a constantly moving target. It also relies on using a common and mutually understandable terminology between the participants. I think we all understand what “prime” refers to, but when I use phrases – which I often do- such as “decent, but not prime”. It may get a bit fuzzier for the audience. We also have the “nasty hill effect” and the “Bosphorous effect” as well as a host of other determining factors. On the new build front, we have the often hastily put together and poorly finished “Mom and Pop” buildings, then we have the 3-4 star hotel like complexes or “residences” as they are termed locally. Then we have what by North American standards could only be called luxury or ultra-luxury projects. You have to understand all of these to really have an idea about sqm pricing. You see so often in the press realtors boldly throwing out numbers, often very large, without providing much context. One read, “20k USD for Kadikoy” without further explanation. In the end what he was talking about only referred to a handful of historical villas and an uber-luxurious high rise. Not very precise munitions and not helpful in the sqm discussion. But I kind of understand it; he was likely only allotted 100 words, so you cannot really delve into things deeply with that.
I think back to my days in Budapest and how precisely the agents seemed to be able to quote the average sqm prices. 1500 euros in the 5th District, 700 euros in the 8th District and 1500 euros for new builds (this was back in 2015). The only factor that would make the prices jump up was a river view. Otherwise it seemed to be a very staid and predictable market. Perfect for the Hungarians, who seem to love getting into the minutiae. But it made sense there; neighborhoods often seemed quite similar, at least from physical point of view and prices were in a simple linear equation involving inner ring (closer to river) and outer ring. After a week or two, you could develop a pretty solid and workable comprehension of the main points. And what I also liked about the realtors was that when you went to re-sell, if you were shooting for a bit of a spicy price, they would give you a good grilling, by saying, “Don’t you know that this price is high for the 7th? Do you think you are in the 2nd District”? They more or less stood their ground and acted in some ways as arbiters deciding on market price. One thing Hungarians and many ex-Soviet countries citizens do not like to do, is to work for free, even if they are in a commission-based employ. So, they would give you your estimate and you could take it or leave it.
Anyway, that represents much of Europe; staid, predictable and to a certain extent, logical. There is also lots of accurate data and everything is recorded in a precise matter, so it takes a lot of the guess work out of things. Finding a European apple to the Istanbul apple is a fruitless task (groan lol). I think the most natural comparison comes with some of the larger Asian cities. Yes, most of them are much higher-priced, but they offer a lot of similarities and might shed some light on maybe why when we say something is “expensive” in Istanbul it may not be in the larger global context. I suspect that is the case. Of course, we as locals, always make this kind of assessment, but I wonder at times if this denial of world-wide real estate trends serves us well in appraising the market. W from Tapei, wrote that not prime, but decent in Tapei can run over 10K USD per sqm. 20K in prime areas. 40-50 percent less for older buildings, but still 5-6 K in non-prime areas. Tapei is a city of 4 million. Much wealthier than Istanbul but likely a city with fewer HNWI. And intuitively we can assume that the ones buying the 5-6k properties are not high earners. It must be really hard also for young people to get a foot on the ladder. That seems to be the case almost everywhere. They are also the ones at the most risk. If they overpay when market is at the top, they will be wiped out if there is a crash.
B from Texas. but with a China connection, quoted similar prices for most Mainland cities with a population over say, 5-10 million. Of course, Beijing, Shanghai will be higher even. Everyone knows the Singapore and Hong Kong story. Bangkok may be a neat correlative. Similarities in economy. Undisputed centers of the country where wages are very different than in the hinterlands. Dense population and of course both EM. I hope someone in the group can provide some insight on Bangkok pricing as I do not really have many ideas and it is hard to find by google search; “decent, but not prime Bangkok” might serve me up a link to a steak house. Or maybe something less wholesome.
So, back to Istanbul. I will throw a few descriptors, qualifications and elaborations at you to guide you to where we arrive at the below sqm price updates as of late-winter 22.
This usually refers to a handful of streets in these kinds of neighborhoods: Cihangir, Galata, Bebek. Nisantasi. Kadikoy, Etiler and a few others. On these few streets, you may be looking at as high as 5K USD per sqm. Higher still if a new build. Throw in a Bosphorous view and you might be looking at 10K. Therefore, I get a bit silent when someone asks me for a sea view place in one of the best neighborhoods in Istanbul with a budget of 250K. That really would be a one in a million and I doubt if you would find a realtor in town willing to put much leg work into that. Now, on the periphery of prime, it is doable, so do not lose heart completely. But sea view any time is tough.
Decent, but not prime.
This is really the portion of the market in which we inhabit. Usually within a few hundred meters of the prime areas in Besiktas, Beyoglu, Sisli, etc. A much easier entry level.
Prices seem to be edging up to 1300-1400 USD per sqm for unrenovated properties. Throw in another 350 USD per sqm for renovation.
Renovated places, done well, always seem to come with a premium and there are not many to choose from. They would start at 2 K in most areas and maybe would be a bit more in areas such as Mesrutiyet, Bomonti and certainly Tesvikiye. A reasonable swathe of Tesvikiye is probably more accurately categorized as prime. A few streets in Bomonti probably get that nod as well.
“Mom and Pops” starting from 2K. These can vary a lot based on the quality, with some edging up to 3K.
3-4 star hotel-like projects (Mint, Ressim Modern, Genyap Link) start from 3K and are on their way fast to 4K, where I feel they will run out of gas, at least for foreseeable future.
Luxury projects mostly start from 6K. Ultra luxury projects, such as Zorlu can top 10K.
The above might all be a bit repetitive for those who have been with me for a while, but essential for newcomers. Also, for the veterans out there, I think you will notice some subtle and not so subtle differences in the numbers, so maybe it is useful after all. I suppose you could consider it as a “report card” on your property. Teacher likes to give outs As haha. We have to accept that there will be a sprinkling of Bs, but we should keep in mind that not all properties appreciate at the same rate, nor do neighborhoods, for that matter. I assume most of us are looking at a 5 year time frame, so many of us are still in the first quarter. I do not see any cause for panic at this point. I am sure if there were, you could read into what I am saying. Apart from a reasonably handy Black Jack player, which involves less bluffing, I am not to good at keeping a poker face.
Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.

We invite you to join us for:
#IstanbulInsights with Keith
On Sundays at 20:00* Istanbul time
*13.00EST/ 19.00CET/
20.00TRT/ 02.00SGT (Monday)
Via Zoom:
Password for logging in: 1234
‘Just Click’ the above link and be part of the Istanbul Insights with Keith’s property market updates.
Every Sunday we will share more info about the best property deals of the week, market developments, followed by Q+A time.

for more information:
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Keith’s Weekly Property News March 14-3-2022

War, snowstorms and glimmers of promise on the property market
Istanbul is once again paralyzed by a snowstorm, the second of the year. In total, it has probably more or less shut the city down for a full week. For those of you in country, it can be a bit challenging getting around. We will be commencing Istanbul viewings in full force from Wednesday.
The conflict in Ukraine rages on, with no end in sight. Pressure seems to be on the Lira and we almost passed 15 last week. So far, Turkey is maintaining its stance of strategic importance, but non-alliance. I suppose this will be the tell-tale week in the direction of this conflict.
Eye of the Tiger (Arman Al Fal something)
Arman works free lance on my team. A knowledgeable and shrewd property player, Arman is attempting to buy a record number of properties to reach his CBI mark. I lost count, as the king of the budgies is at, at least 4 or 5. Last I heard, he was bogged down on proceeding with properties because his lawyer stopped answering his manic texts lol. Tiger and I will also be holding a separate zoom session on the large building for 27 million lira that we talked about 2 weeks ago. It has been delayed, as I have been pulled in different directions. However, I do have a handle on the numbers now and I see plenty of angles on that property.
Here is his view of the current market.
Sahibinden and hepsiemlak
As I have said before, you really only should be using these two sites for property searches. All other ones are likely to be out of date or misleading in some way or another. Especially avoid Propstar. Zingat if you must, but there really is no need. The above 2 sites will allow you to access easily 96% of what is on the market. Each site can be viewed in English and they are easily navigable. I feel all clients should be spending a few hours poking around, getting a feel for the market. Keep in mind a good 75% of what you see will not be actionable for one reason or another. Success in the search for property is underpinned by good research and an understanding of at least some of the nuances in the market. And Istanbul is indeed a very nuanced and asymmetric market. It takes some time to figure that out.
My feeling is that more properties are starting to trickle back onto the market. If so, that would be great news. I wish I had a way of verifying that. Perhaps one of our more tech savvy members can figure that out? It is actually an essential piece of data; understanding the supply side. We can deduce the pricing, no issues there. My expectation is that the less desirable neighborhoods may not have shown big dips in new entries from December til now, but that the more popular neighborhoods showed a big drop in new entries during that time, but slowly may be recovering. I think a big driver in this will be that owners who have tenants from a few years back, will be really suffering in terms of their rental yields, but will have done well in terms of appreciation. Some may be thinking to cash out. As always. Removing the tenant is part of the negotiation process and we are much more reluctant to get into a deal with a low-paying tenant without at least getting them to sign agreement that they will leave on such and such a date. These kinds of agreements need to be done during the overall negotiation phase.

Izmir files
We have a really full line up tomorrow for viewings and that will probably be it for this tour. We have a few deposits in and are actively negotiating on a few others. I will be holding another separate zoom session mid-week to wrap up my findings and consolidate my thoughts. In sum, I stand by my assessment that if someone wants multiple properties for CBI, Izmir is almost a must for one of them, both from the point of diversification and due to the fact that finding multiple good deals in Istanbul will be a huge task. A 1 shot CBI in Izmir also is a great idea, either on secondary market or new build. On secondary market, it would look something like as follows: 3.6-4 mil lira, huge sea view, 120-160 sqm, possibly in buy off the shelf condition or requiring renovation. If I were looking at a renovation project, I would try to hit near the 3.7 mark for CBI and allot 500.000 lira for renovation. Some might require far less, a few others, a bit more, depending on a range of factors, the most obvious being the size of the property.
My Izmir trip was interrupted this week, as I went down to Bodrum to try to find a villa for Russian client K. By the way, I found it very frothy down there. Even the developers would not budge one lira. That was surprising. It looks like something decent, with a view and in a reasonable but not prime location, starts from 3K USD per sqm. It goes way up for luxury properties in prime locations. I mean way up. I did not really feel comfortable with the prices I was seeing. Felt risky and was hard to see how rentals could produce good returns with what seems to be an endless supply and the spicy price to get in the door. Essentially, I am giving it the big pass. Maybe I was spoiled by Izmir, which in my opinion, still offers great value and has a fairly painless entry point. Not to mention, the yields seem far easier to calculate. Not eye-popping, but in the 3.5-5% range. You may very well do better, but that probably requires renovation and buying in cheap. In that case, you may hit 6. Anything above 6 would represent an outlier.
We have a really full line up tomorrow for viewings and that will probably be it for this tour. We have a few deposits in and are actively negotiating on a few others. I will be holding another separate zoom session mid-week to wrap up my findings and consolidate my thoughts. In sum, I stand by my assessment that if someone wants multiple properties for CBI, Izmir is almost a must for one of them, both from the point of diversification and due to the fact that finding multiple good deals in Istanbul will be a huge task.
Finally, a few more nice things about Izmir.
-On the secondary market, they are not raising the price every time I go to negotiate. I have been following the market closely since late December and I noticed that they are keeping the same prices, even though the USD has gone up roughly 8% in the past few weeks. On the other hand, prices seem to be fixed. They do not go in for much negotiation here. One agent even seemed very surprised when I offered minus 10 on a property. They usually just dismiss low offers and say the amount that the owner wants in hand. Here as well, as in Istanbul, the trend is for the buyer to bear the full stamp duty. For me, that is fine. I look at the whole number and if it makes sense, I am pleased to proceed. I would not say that we are in negative negotiation space, but usually if we can claw back a few closing expenses, we will have done well.
-Agents are very professional, courteous and knowledgeable and less prone to flights of fantasy when it comes time to crunch numbers.
-The new build market is roaring. Local demand is very strong. Iranians seem to be the dominant foreign buyers in the area. They prefer larger units with 2 washrooms.
-Budget, but not especially cheap hotels, are everywhere. Bookings in March even seem solid.
A few properties that are in closing process from last week.
1-The Bomonti Beast (Istanbul). About 350 sqm of real estate spread out over 2 units. All in about 5 mil lira. I wish I could just copy and paste that.
2- New build in Ingridstan (Merkez, Sisli), 2.9 mil lira, with terrace and Bomonti views. 115 sqm.
3- There are rumblings from Tiger’s corner that a multi level historical property is in process. I do not have all the details, but it is approximately 120 to 130 sqm spread over three floors, with a price tag of 1.5 mil lira. It is an old wooden house in the lower part of Kurtulus, very near the Osmanbey Metro and Ramada Hotel. We often refer to these properties as ‘collector’s items’…they are cute as a button once restored and hold value remarkably well due to limited supply.
4- Izmir new build. 85 sqm, full sea view with balcony 150 meters from Asansor (the historical elevator). Mostly renovated. There is some additional space (actually extra unit) in the back. 1.3 mil lira all in.
5- There are several others we are working on in Izmir. Will share those details next week as they involve some finesse to close.

This is one of those weeks where I feel I have a lot more to say. Alas, time does not permit.

Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.

We invite you to join us for:
#IstanbulInsights with Keith
On Sundays at 20:00* Istanbul time
*13.00EST/ 19.00CET/
20.00TRT/ 02.00SGT (Monday)
Via Zoom:
Password for logging in: 1234
‘Just Click’ the above link and be part of the Istanbul Insights with Keith’s property market updates.
Every Sunday we will share more info about the best property deals of the week, market developments, followed by Q+A time.

Keith’s Weekly Property News March 6-2022

War, pain, inflation and what remains
Had to push hard to scribble down a few utterances here today as recent events have left me uncharacteristically speechless. Like many people, the war has somehow gotten inside me. As the hope hour fades for any kind of resolution that may bring something less than a bloodbath in this fratricidal war, reality sinks in. The world is really nothing like we thought it was two weeks ago. Nuclear options are on the table as the world lets out a sustained gasp. I do not know what else to add other than to say it is a tragedy of epic proportions for both the Ukrainian and Russian peoples. I guess every 10-20 years an event occurs to make us realize we are far from any kind of world we all want to live in. All we can pray for is an unlikely deus ex machina to descend on this theatre of horrors and set the world right again. Personally. I am not even sure what that looks like at this point.
On to further uncomfortable truths. The CPI inflation of Turkey blew past 50% and no doubt many more Turks are feeling the bite of poverty-like conditions. The currency has been surging upwards again, with the culprit obviously the uncertainty of the war. If we aspire to Dr. Panglosses inane philosophy, “All is for the best in this, the best of all possible worlds”, faith in that must have been sorely tested recently.
Turkey is obviously, once again, not a minor figure on the geo-political stage. I may even go out on a limb here and say that the war has the potential to drive a further wedge between Turkey and the West. There are a few ways that could happen. Turkey, with her back to the wall economically, might be open to striking a deal to get discounted Russian oil that others refuse to buy. Surely, the longer this conflict goes on, the greater the likelihood that some hitherto unthinkable scenarios may actually happen. Right now, Turkey is delicately trying to balance their relations with both countries, which is clearly the optimal approach for Turkey. However, pressure may mount in time. Again, I am getting a bit distant from mandate of presenting properties here, so I will leave this up to zoom discussion perhaps.
On Saturday, I travelled to Izmir with the primary intention of checking out properties in great locations and with great views. I need more viewings to really calibrate, but my initial impression is that it is a deep value proposition here. If people are interested in having more than 1 property to reach CBI, this is an ideal spot to have one. A whole CBI here would also be eminently sensible, such is the value. Sweeping and majestic sea views starting from 1.25K USD per sqm (unrenovated, of course). The kind of views you could expect to easily pay 3-4 times more for in Istanbul. I will mostly look at properties in the 2 million lira and above range, but will dip my toes in the 1 million range as well. Those could make great little pied de terre for all the nomads. As I said in my whatsapp channel – without hard data to back up, rather just a hunch- I believe Izmir will be one of those world venues that does well by the waves of remote workers looking for favorable climes to conduct their affairs post-covid. In addition, again with limited research, it seems Izmir could use a few really cool AIRBNBs, maybe a bit more on the high end side. These are all things I will be exploring in the coming days. I am also hoping to visit a handful of new projects, but I covered many of those in past trips.
I plan to have a separate zoom session later this week for Izmir-only related properties. The purpose is to push the best of what I found, but anyone can join in. For the properties I viewed yesterday, I gave a rare 2 thumbs up for all 4 of them, so obviously I am bullish on Izmir. I feel I will be better-positioned in the next zoom session to discuss yields, future cap growth, property management and renovation-related issues, though I will touch on those briefly tonight as well.
It was good to have clients drop in on our property management sessions on Thursdays. Will be continuing those for as long as I see it necessary, if not indefinitely.

Well done to the whole team who seem to be managing things in Istanbul just fine without me. I plan to be back mid-week if we have any new in country arrivals.
Properties to be shared in zoom session

Keith’s Weekly Property News Fabruary 27-2-2022

Covid, war and more.
After 2 years of brushing it under the rug, Covid popped up and I tested positive last week, and again today. Apart from fever and fatique on Day 1 and 2, there is not much more to complain about, so I feel lucky about that. Nonetheless, when you have a virus that has been in the news every day for 2 years, it does make you take notice. Being housebound for a handful of days will do that, too. I did, however, keep active on the phones and perhaps took a bit more time than usual to listen to what was being said on the other end. Normally, I keep it short with other realtors, but this week – whether it was out of boredom or for amusement – I kept a few on the line for a bit longer.
To the last person, they lamented the state of the market, with the most common refrain being, “No one wants to sell” When I asked if there were any solution or if there were any likelihood that it would change, the answers were generally that it would not change any time soon and that there was not much that could be done about it. Istanbul real estate agents can be astonishingly un-analytical, but they usually arrive at the correct point through some intuitive process. They rarely speak of inflation hedges, flight to safe havens, or thin supply lines. As many of them have rentals as their bread and butter, they tend to be able to wait out these kinds of lull periods.
The internet gives a very distorted and rosy picture to the property market. Newcomers must think they have entered a kind of paradise, where prices look cheap due to sqm inaccuracies and supply looks abundant. Now remove a full 80 % of what you see listed. Put a bunch of question marks around the remaining 20%. This is how you should approach what you see. That is the reality. When you strip away falsehoods, inconsistencies, inaccuracies or properties with tenants who refuse to show or where owners arbitrarily raise prices, this is what remains. To some extent, this is not a new phenomenon on the market, but it is clearly at the extreme these past few months. In addition, it is just a fact that there are fewer listings being put out recently. I do not mean to scare anyone away from the market. There would not be much point in that. Agencies like Property Turkey do their bit by front line offerings that look very legitimate and enticing. I can pretty much go through their page and say within 5 minutes what is legitimate and what is not. Those prices “Starting from 85K” usually jump up to 140K when you get your foot in the door and start asking. Anything they have listed on the secondary market has invariably been sold out. They may,

or may not, offer you an alternative if you ask. I guess if I were to sum it all up, I would say apply a grain of salt to all listings on the internet.
As patchy as the presentation of some of the stuff we put up on our whatsapp channel may be, it does have the virtue of being mostly accurate and current. It probably gives a better snapshot of what is available on the market than just about anywhere else.
The lira initially spiked up sharply in the 24 hours following the first falling of bombs. By the end of the week it had moved back towards what it had been pre-conflict. No doubt how this conflict plays out will have some impact on the lira, so we will be watching that closely as always. I suppose it will push demand for Ukrainians and Russians alike for property in places like Antalya, if not so much in Istanbul. But a weak rouble could also slow that down, so hard to say at this point. It is also unclear how it will affect tourism. Initially, I am sure numbers from those countries will be down, but we are in low season now anyway, so again it will be more important to see where the conflict goes in the coming months than right now. Turkey has so far had just a nominal role as peace broker.
I guess in the end all that can be hoped for is a speedy conclusion one way or another. I do not see the conflict has any potential to disrupt the Istanbul property market, though it could cause the currency to bounce around.
Shot another video today with Wandering Investor, Ladislas. That is a must watch for incoming investors and old alike. I will post it when it becomes available.
I am still planning a trip to Izmir to check out the opportunities there. I hope that comes together in the next week. I think we need contribution from there especially for upcoming Spring season.

Properties to be shared during meeting

Keith’s Weekly Property News Fabruary 13-2-2022

Heading into the middle of February, we have had a patch of Spring-like weather and quite a number of clients passing through. That is always a challenge as we try to accommodate the often very different needs and expectations, not to mention timelines and restrictions of every variety for viewings. This week, we felt that in a very pronounced way.
But hey, the Lira seems to be holding steady, almost eerily stable after such a period of volatility. As I have said many times before, this is crucial for us to be able to make deals. We need stability to be able to pinpoint value, estimate yields, and much more. Let us hope for a continuation there.

We are making steady progress, on the property management front. As I have pledged before, we will keep running multiple sessions on Thursdays until I feel we get it right. As there are so many issues to be resolved, I still feel we are about a month out from where I will feel satisfied. Selin, myself and Fatih will be holding a 2 day session to work out remaining issues this week. This is vitally important to me and we are committed to getting it right. We can only survive on the triage approach for so long. I cannot over-state how much of a challenge it is dealing with renovations, different building managers, utilities connection without proper POAs, neighbors etc. on a large scale. Somehow…still…every darn neighbor in town ends up with my number and the rich variety of strange complaints and requests that pop up on my whatsapp are pretty staggering.
As always, we are operating in an ever-changing landscape and we need to act fast to catch deals as well as see&evaluate new opportunities. Unfortunately, the Izmir Blue project that I had been promoting has practically sold out before we could really even capitalize on it. They have also increased the prices on remaining units due to what they say has been overwhelming demand. I do not doubt it in this case. Pity it had not come on my radar 3 months back.
If I had any doubts that there has been a surge in demand locally, those have now been put to rest. I put a non CBI compliant property (owned by my foreign client) on the market last week. I had to take down the listing and re-think after I got 10 calls in one day. I did what I hate people doing to me….I raised the price. The first actual viewer made an offer and we are now about to close. It is going for 15% more than I thought it should have. We might have been able to get more, so I even wondered if I had done right by my client. We went ahead, as he let me know there was a bit of a rush. I have another such property that I will put up for the local market only next week, so I am pretty curious how that will go. As most of my clients who have already bought are likely not considering selling for years to come, this may not be that interesting. For me, it is quite fascinating.
What might be of more interest for those who have bought and for incoming clients is the state of the rental market and particularly how yields are holding up. Yields have been a bit of a dirty word for me since the currency crash occurred, but they cannot be ignored for long so I will dive in with some real-life and fresh examples. Some of the numbers are slightly rounded for ease.
2 data bits for you from current rentals done last week.
Property purchased in Summer for 800 K TRY (USD was around 8). Complete reno for around 25K USD, 80-85 sqm, 2 bedroom apartment. 125K USD all in.
When I did my rental estimate, I expected around 5000-6000 lira monthly. We signed on for 8000 lira monthly. What can we extrapolate from this? Indeed, the client may have taken a hit on the yield, but nowhere near as bad as I would have thought. USD appreciation took out some of the yield pop, but not as much as I had feared. Still, we need to worry about where the Lira goes from here, so I am by no means taking a victory lap.
Another take away from this? Well-renovated properties are in short supply. I am sure demand for rentals in new build projects is also very high for those coming online.
I believe the above will be fairly representative for properties bought during the most part of 2021 and newly entering the rental market. Of course, with some regret, there were some rentals signed pre-currency crash where, retrospectively, we had rented out at too low a rate. But that is purely with perfect hindsight.

New build property purchased in October for 185K USD, approx 1.85 million TRY at the time. Old tenant vacated at the start of February. New lease signed at 9400 TRY, or just over 700 USD. This yield is fairly typical, better even, than yields for most new builds and not at all bad in light of the ensuing currency shifts.
We will have several more rentals coming up soon, so we will certainly be suggesting starting out at higher prices and being a bit more patient. In any event, the rentals will go very fast unless we have grossly over-done it on the ask. Also, I am getting a better feel for the yields now that the dust is settling again -squirm in my chair lol- so I suppose we may again be able to discuss yield projections.
The big question mark in the surge in demand for rentals is why is it happening. Does anyone have any idea on that? I think Covid just drove up the rents and then they kind of just seemed to keep going. They are still quite cheap by European standards, but they must be getting very painful for many Turks. In situ tenants, as a result, are hunkering down. We used to be able to incentivize them to leave on purchase by offering a few free months of rent. No more. That is a whole other story.

Istanbul Airport, despite its many detractors, is the busiest airport in all of Europe, proving that the relative openness of Turkey during Covid has made it a top destination. I can only imagine how tourism will look this year if the same trend continues. It will be an absolutely massive year, Even at this time of year, the city seems to be bursting with tourists. You might want to book your Airbnbs early.
Speaking of Airbnbs, we will be holding a workshop in about 2 weeks for everyone who wants to go that route. We will give some idea of nightly rates, our fees for management, and much more. We will have a new staff member who is completely dedicated to the project.
Property links to be shared in zoom session.