Introduction to Real Estate Investing in Izmir

Izmir is the provincial capital of the eponymous province, located on the western coast of Anatolia. It is the third largest city in Turkey, and the largest urban settlement on the Aegean Sea. It is thus comparable to the biggest North African cities such as Alexandria and Algiers, as well as metropolises along the Iberian peninsula such as Barcelona, among the largest population centers located on the Mediterranean Basin.

Photo credit above: The famous clock tower on Konak Square in Izmir, one of the city's most internationally recognized landmarks.

Uploaded to Adobe by HUSEYIN Adobe Stock photo ID: 510687958

A Brief History of Izmir (Smyrna)

Izmir is quite an ancient city, with local rulers being mentioned in the Bronze Age as vassals of the Hittite Empire, as well as in trade texts of the Biblical Assyrians. Until the painful population exchange of Greeks from Anatolia and Turks from Greek lands after World War I, it also had a large Hellenic population. Today Izmir is attractive to property investors, because it offers something for everybody: a unique blend of historical charm, modern amenities, and stunning coastal beauty. Therefore the market here caters to tourists, expats, and real estate investors.

There are many factors that makes Izmir attractive to all of these different segments--its strategic location makes it commercially viable for business endeavors, it is close to destinations that caters for tourists such as Cesme, Alacati, and the ruins of Ephesus. This is where the Apostle Paul planted a First Century church, to whom he wrote his eponymous Epistle. The region has a history spanning over 8,500 years of human settlement across various different cultures and empires, including the Eastern Roman or Byzantine Empire. Such examples of these includes the Kadifekale Castle and the Agora Open Air Museum.

Photo credit above: Downtown Izmir skyline looking toward the Aegean

Uploaded to Adobe by Tarik GOK Adobe Stock photo ID: 321023520

Why to Choose Izmir as Your Home Base in Turkey?

Since it is located on the Aegean, Izmir boasts a Mediterranean climate. Which means hot dry summers, nice warm autumn days and cool fall nights, followed by mild wet winters. This is the kind of weather that attracts northern European retirees and Russian tourists to the winter sunshine. It is also considered an important Turkish city, so it has well-developed infrastructure and other services such as an international airport and a robust public transportation system, alongside excellent educational and healthcare facilities.

Due to the economic situation in Turkey, especially the severe inflation of the Turkish Lira, prices here are highly affordable for foreigners (expats and foreign investors) who happen to have a reliable source of income and large cash savings. The city values foreign direct investment including in real estate, the average property in Izmir is also cheaper than in the two largest Turkish cities by 20% to 40%, depending on what type of property you are seeking.

The regional economy of Izmir is mixed, after all, it is the third largest economy in Turkey. and its economy is diversified between industry and trade. Contrary to popular expectations, tourism is not a huge sector in this region. Since Izmir proper is a metropolis, most tourists simply use it as a stop along the way to other coastal towns and ancient sites. Which means you can get better lodging and lower cost dining options for your money in Izmir than Istanbul. It's less crowded and simply cheaper than Ankara and Istanbul, so if you invest here correctly, your tourist or vacation rental property investment can pay off substantially. As most foreign investors focus their investments in Istanbul and in other, more touristy cities like Antalya, the property market in Izmir is not saturated.

Photo credit above: The Ruins of Ephesus

Uploaded to Pexels by Joan Costa Photo taken May 16, 2023

Please Note That the Risk of Earthquakes is High in this Region

However, it is important to note that not everything is so rosy, and a catastrophic loss is possible if your building cannot be properly insured for earthquakes. As recently as October 2020, a 7.0 magnitude earthquake off the island of Samos in the Aegean damaged or destroyed hundreds of buildings in this city. As with the cities of Adana and Ceyhan to the southeast, this region is one of the most seismically active zones in the entire Mediterranean Basin.

Districts and Suburbs Where to Invest in Greater Izmir

Well known and important districts for buying property here include Asancak, Karisyaka, Bornova, Balcova, Urla. There are several other areas we could list here as well, which all specialize in one thing or another. Some are known to be night life centers, a few are in the the heart of the city, and so forth.

Alsancak, for example, is known to be a residential district that is rather modern, it is close to the waterfront and has many services catering to those who like going out, such as cafes, restaurants, and small friendly shops.

Karisyaka is located on the northern side of the Gulf of Izmir and is also a residential district, with a very popular promenade for sunset strolls.

Bornova is a suburb of Izmir known for the Ege University that many expats like for its family friendly atmosphere.

One of the newer ones in terms of the new development housing projects, Balcova is known in the city for its thermal baths and green wide spaces. It is also a residential area, but has a wide range of property types.

Urla is favored by expats for its coastal lifestyle, and Karsiyaka is a residential district popular with foreigners as well.

Many Types of Properties for Sale in Greater Izmir

While Cesme with its well-known marina and Alacati are towns outside of Izmir, they are considered an extension of the city, they are known to have vacation homes and cater to a coastal and boating lifestyle.

Of course, the city itself has many, many types of properties.

Photo credit above: Tourist in the Library of Celsus at Ephesus

Uploaded to Pexels by Taryn Elliott Photo taken Apr 21, 2019

Apartments are the most common type of property for Izmir, and they range from modern high rise complexes to historic duplexes in the city center.

For Deeper Pocketed Investors, Consider Commercial and Medical Tourist Properties

Villas are available either in the two coastal towns of Cesme and Alacti or are in the outer edges of the city’s suburban areas and privacy. Commercial properties in Izmir are varied and common as well, due to the growing economy of the local city, retail spaces, offices, and hotels have been making great profits for their owners. Medical tourism is developing here too, including higher-end services which would be very expensive out of pocket in America, such as the eye and plastic surgeries offered at the Izmir Clinic. A list of medical centers and surgical clinics can be found here.

Considering that Turkey has very investor-friendly laws regarding foreign property ownership, non-Turkish citizens can buy real estate in almost all areas of the countries, barring military bases or nature reserves. There are of course legal considerations that the investor-to-be must keep in mind, and other legal terms and non-property assets, for example:

Title Deed (Tapu): Ensure that the property has a clear title deed (Tapu) and that there are no legal disputes, liens or encumbrances.

Taxes and Fees: Be aware of the various taxes and fees associated with buying property in Turkey, including property transfer tax, VAT, and notary fees--expect to pay a 4% title deed transfer tax, legal fees, and annual property taxes as well.

Residency Permit: Buying property in Turkey can make you eligible for a residency permit, which can be a stepping stone to citizenship if you meet the $400,000 minimal investment threshold.

Greater Izmir can be a part of any long-term plan to obtain Turkish residency and citizenship.