Izmir Always Popular Despite the Challenges

Prof. Dr. Yener Coşkun, Faculty Member at Izmir University of Economics (IUE) Department of International Trade and Finance, stated that despite the pressure of economic conditions on the housing market, Izmir's cultural and geographical characteristics are keeping the city afloat, and the future lies in a ‘sustainable’ housing vision.

While the Turkish housing market continues to struggle with multifaceted economic challenges such as high inflation, exchange rate volatility, and record-high construction costs, Izmir’s real estate sector maintains its resilience despite all these pressures. Prof. Dr. Yener Coşkun provided an in-depth analysis of this situation, stating that the city's internal dynamics, combined with the power of its location, indicate a new momentum is on the way for the market. Prof. Dr. Coşkun underlined that the rising construction costs have led to significant bottlenecks in both the production and sales sides. He also noted that the real decline in housing prices has, for some time, reduced the appetite of both producers and investors for the sector.

“PRICES MAY GO UP”
“This situation, which has emerged in recent years due to the effect of macro conditions, has caused a decrease in supply, especially for the lower-middle-income group, leading to a significant accumulation of demand”, said Prof. Dr. Coşkun, adding that Izmir has also taken its share from this process. Expressing his estimation that housing prices will rapidly increase when the economic cycle turns around, Prof. Dr. Coşkun said, “This is because we will face the rapid reflection of deferred demand, possibly coupled with the effects of credit facilities, onto the market”. Prof. Dr. Coşkun also added that the current economic conditions pose significant difficulties for the Izmir housing market.

“LOCATION FACTOR IS CRITICAL”
Explaining the secret behind Izmir maintaining its attractiveness despite all these negativities, Prof. Dr. Coşkun said, “The main reason for this is Izmir’s deep-rooted and contemporary cultural heritage, its unique natural beauty, and the lifestyle it offers, intertwined with the sea. The most important value-creating factor in real estate is location. We see this in Izmir. The quality of life offered by the location continues to attract investors and end-users to this city despite the challenging economic conditions”.

Prof. Dr. Coşkun also touched upon other factors that keep the city's dynamics alive, stating that urban transformation projects are among the most significant driving forces that keep demand alive in the Izmir housing market. Furthermore, he noted that the city's infrastructure investments and transportation projects positively affect real estate values. Giving an example on this topic, Prof. Dr. Coşkun said, “Metro and rapid transportation lines ease life while increasing real estate demand in certain areas. Ease of access instantly elevates the value of a region”.

A CALL FOR A ‘GREEN VISION’ FOR THE SECTOR

Prof. Dr. Coşkun stated that another important element could be the development of sustainability-focused housing environments. Prof. Dr. Coşkun reminded that the Climate Law, which is expected to be enacted in the near future, contains elements that could deeply affect the construction sector along with other sectors. Prof. Dr. Coşkun said, “The best advice that can be given to sector professionals at this point is for producers to orient themselves towards providing housing supply that is suitable for both new legal regulations and consumers’ environmental sensitivities”. Prof. Dr. Coşkun drew a vision for Izmir's future, saying, “A journey from blue Izmir towards a green and sustainable Izmir can be expected to create new momentum for the housing market”. Highlighting that this transformation will have both environmental and economic returns, Prof. Dr. Coşkun stated that the sector developing an innovative and environmental vision in accordance with this will provide a significant and lasting improvement in the housing market.