Cities with the lowest rental yields revealed: Muğla's position draws attention
Due to high interest rates in recent times, notable developments are occurring in the real estate market. In some cities, the amortization period has risen to the 23-year band. The annual rental yield for housing investments in these cities remains low. The top 10 provinces with the lowest rental yields have been identified. Muğla's position in the ranking drew attention.
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In a high-interest environment, attention has turned to the real estate market. Housing loan interest rates have also remained high for months. Mortgage-backed housing sales, in particular, are in decline. It has also been observed that there has been a downward trend in real terms in housing prices for months.
LATEST STATUS ON HOUSING LOANS
According to the Türkiye newspaper, the lowest interest rate offered by banks for housing loans stands at 3.05 percent. Even with this rate, a citizen taking out a 1 million TL housing loan pays back 3 million 781 thousand TL over a 120-month term. The monthly installment amount is 31 thousand 352 TL. The total interest burden amounts to a high rate of 278 percent of the principal.
The Central Bank recently released the “Residential Property Price Index” data for February. Accordingly, in February 2024, housing prices rose by 2.20 percent on a monthly basis and 58.30 percent on an annual basis. While monthly increases have remained below inflation for the last four months, the annual increase rate fell below the annual CPI for the first time in February. This situation indicated that real value losses have begun in housing prices on an annual basis as well.
According to CBRT data, the average housing price per square meter across Turkey was announced as 31 thousand 365 TL. Furthermore, the average price of a 120-square-meter residence is calculated as 3 million 763 thousand TL.
Especially for investment-oriented housing purchases, the “rental return period” stands out as the most important criterion. In this sense, while the amortization period in many cities in Turkey varies between 13 and 15 years, these periods are considered reasonable for housing investment.
However, in some cities, the amortization period rises to the 19-23 year band. The annual rental yield of housing investments made in these cities remains low, and thus the return period becomes quite long.
According to the latest April 2024 data released by the real estate platform Endeksa, the top 10 cities with the highest amortization periods are listed as follows:
10-KARAMAN
Average Housing Price: 2,602,460 TL
Annual Rental Yield: 5.37 percent
Amortization Period: 19 years
9-KASTAMONU
Average Housing Price: 2,455,446 TL
Annual Rental Yield: 5.33 percent
Amortization Period: 19 years
8-RİZE
Average Housing Price: 3,034,935 TL
Annual Rental Yield: 5.32 percent
Amortization Period: 19 years
7-BAYBURT
Average Housing Price: 2,332,136 TL
Annual Rental Yield: 5.24 percent
Amortization Period: 19 years
6-ANTALYA
Average Housing Price: 4,128,584 TL
Annual Rental Yield: 5.21 percent
Amortization Period: 19 years
5-TRABZON
Average Housing Price: 3,279,448 TL
Annual Rental Yield: 5.20 percent
Amortization Period: 19 years
4-ARTVİN
Average Housing Price: 2,696,708 TL
Annual Rental Yield: 5.16 percent
Amortization Period: 19 years
3-BURDUR
Average Housing Price: 2,753,024 TL
Annual Rental Yield: 5.03 percent
Amortization Period: 20 years
2-AYDIN
Average Housing Price: 5,143,600 TL
Annual Rental Yield: 4.77 percent
Amortization Period: 21 years
1-MUĞLA
Average Housing Price: 7,552,176 TL
Annual Rental Yield: 4.30 percent
Amortization Period: 23 years