Housing is no longer an investment vehicle
Until a few years ago, rent increase rates were calculated based on CPI data, but were later capped at 25 percent by the government. In renewed contracts, landlords cannot impose a rent increase of more than 25 percent on tenants. Landlords are finding the solution in selling their homes.
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Real estate expert Gülcan Altınay stated, “Landlords have put their homes up for sale because they cannot impose the rent increases they want on tenants. Since there is no demand, the appreciation rate and value ratio of their apartments remain at a low level.”
HOUSING IS CEASING TO BE AN INVESTMENT VEHICLE
Expressing that housing is no longer an investment vehicle and that investors are now turning to buying commercial properties, Altınay said, “Especially in the Thrace region, investors have turned away from buying housing and toward buying commercial properties. In other words, they are buying factories and industrial shops with small square footage and making their investments this way. To give an example, they buy a 300-square-meter industrial shop at 900 to 1,000 dollars per square meter. That means they buy it for 270 thousand dollars. In TL terms, this comes to approximately 7.5 million TL. When you want to rent out this 300-square-meter commercial property, the rent is approximately 1,500 dollars. This corresponds to a figure around 50 thousand. And it amortizes this in 150 months,” she said.
“INVESTORS HAVE TURNED TO BUYING INDUSTRIAL SHOPS”
Stating that the rent increase rate for commercial properties in October was 55 percent, real estate expert Gülcan Altınay said, “Since it is 25 percent for housing, investors are now making their investments in commercial properties, industrial shops, or places that fit their budget. For example, instead of buying an apartment for 7-8 million liras, they have turned to buying industrial shops. Those with larger budgets prefer larger square footage or buy two shops side-by-side. They rent them out to a larger business or a larger industrialist or factory,” she said. The rent increase rate to be applied to commercial properties in November was recorded at 54.26 percent following the announcement of October inflation data.