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May 15, 2017

Poor rental returns on residential property in Istanbul


Last Updated: May 15, 2017
ISTANBUL
Bakırköy apartments
PRICE/SQ.M. (€) YIELD (p.a.) PRICE/SQ.FT. (€)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
Ataköy 1. 3,321 5.60 2.03% 309 0.52
Ataköy 2-5-6 5,109 11.92 2.80% 475 1.11
Ataköy 3-4-11 2,141 5.82 3.26% 199 0.54
Ataköy 7-8-9-10 2,810 7.58 3.24% 261 0.70
Yeşilköy 3,321 7.34 2.65% 309 0.68
Yeşilyurt 4,087 7.24 2.12% 380 0.67
Beyoglu apartments
Cihangir 2.555 8.51 4.00% 237 0.79
Gümüşsuyu 3,066 7.66 3.00% 285 0.71
Katip Mustafa Çelebi 2,555 8.69 4.08% 237 0.81
Kocatepe 1,967 5.75 3.51% 183 0.53
Besiktas apartments
Bebek 8,430 17.03 2.42% 783 1.58
Etiler 4,598 11.50 3.00% 427 1.07
Levent 4,343 13.70 3.79% 4.3 1.27
Ortaköy 2,555 7.55 3.55 237 0.70
Kadıköy apartments
Caddebostan 2,539 7.41 3.50% 236 0.69
Suadiye 2,368 6.74 3.41% 220 0.63
Bostancı 1,474 4.81 3.92% 137 0.45
Feneryolu 1,862 5.22 3.37% 173 0.49
Caferağa 1,888 6.39 4.06% 175 0.59
Sariyer apartments
Büyükdere 1,579 5.81 4.41% 147 0.54
Yeniköy 5,365 9.20 2.06% 498 0.85
Şişli apartments
Teşvikiye 3,832 9.93 3.11% 356 0.92
Halaskargazi 2,468 8.10 3.94% 229 0.75
Meşrutiyet 1,676 6.61 4.73% 156 0.61
Source: REIDIN Definitions: Data FAQ See also: Update Schedule

In Istanbul, the gross rental yields on apartments - the return earned on the purchase price of a rental property, before taxation, vacancy costs, and other costs - range from 2% to 4.7%.

In previous years, our research has shown that rental yields are significantly higher on smaller apartments.  But then smaller apartments tend to need more maintenance, so a higher yield is justified.  This year we are using Reidin´s figures, which do not distinguish between apartment sizes.  It is rather obvious, however, that higher rental yields are to be earned in the poorer districts where per square metre prices are lower, and it is in these districts that rental yields edge up beyond 4.5%.

Prices per square metre range for apartments range from  €1,700 to €8,400, but this very large range obviously depends enormously on location. Apartments in the marvellously attractive Bebek district of Besiktas are much more expensive than in most other parts of Istanbul, with prices of around €8,400 per square metre.

Round trip transaction costs are reasonable in Turkey. See our Poland transaction costs analysis and our Turkey transaction costs compared to other countries.






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