We would like to give you an up-to-date overview of the Coronavirus situation in Turkey. You will find below an analysis of the economic situation with the background of the Corona crisis and current developments in the Turkish real estate market.
Table of Contents - What is the impact of the Corona crisis on the Turkish real estate market?
- Current status of corona in Turkey
- The medical sector in Turkey
- Investment programs to support the economy
- Current economic situation
- Opportunity for property investors?
- Buying property in Turkey despite travel restrictions?
I. Current Status of Corona in Turkey
- Number of infected and dead
The number of patients tested by 31 May 2022 was 128.854 (according to the Ministry of Health). The test capacities are being expanded daily, with 2.022.843 tests having been carried out for the first time on the 19th of May (25 May: 21.492 tests, national holiday in Turkey). Of the total number of tests conducted, 112.126 people were diagnosed with the Coronavirus, and the number of deaths from the crisis was 589. 4.782 patients are currently being treated in intensive care units (compared to 1,154 on 11 May 2020). The number of patients recovered is 132.080. Internationally, Turkey is performing relatively well. The increase in new cases was greatly reduced by extensive measures taken by the Turkish government. According to the John Hopkins University Turkey has a low mortality rate per 100k population in comparison to many other countries (JHU Cases and mortality by country).
- Status of shops, cafes, restaurants, bars, hairdressers, and authorities
In Turkey, public life has come back to normal with restrictions removed. All banks and authorities have resumed their daily opening hours for weeks and continue to observe the minimum distance in queues and closed rooms. Supermarkets often have transparent partitions in the checkout areas.
There is a general mask requirement in many public areas. Violations of these requirements can result in fines of up to 3,000 TL. High-quality masks can now be found comparatively cheap almost everywhere since Turkey has a number of companies that already produced masks before the pandemic and others started production during the pandemic.
Shops, cafes, restaurants, bars, hairdressers, cinemas, theatres, operas, etc. are temporarily closed. For restaurants and retailers, online orders and/or on-site pickups are permitted. Football games and comparable mass events are currently not taking place.
- How residents are dealing with the restrictions
The corona pandemic is currently drastically changing the lives of most Turks. A team of researchers examined the consequences and provided figures on how it affects people's everyday lives - and how the restrictions are accepted.
According to that, more than half of the population continues to go to work regularly. Many large companies have introduced temporary home office regulations. A lot of people show understanding for the cancellation of soccer games and similar events as well as for most other restrictions. But there are limits to understanding the Corona measures. Especially those who are heavily dependent on their monthly income have little understanding for month long restrictions, the general mood though is still more accepting than refusing.
- Other actions
In Istanbul it was announced that the entire population would be provided with free self-protection masks. Getting masks occur through the allocation by pharmacies using the ID card number. The free quota is 5 masks every 10 days per inhabitant, priority is given to over 50-year-olds.
II. Medical Sector of Turkey
The medical sector in Turkey is fundamentally efficient. This can also be seen in the comparatively low mortality rate of 2.7% in the corona crisis.
Cheap statutory health insurance
95% of the population has access to extensive basic security
Further benefits for pensioners and foreign citizens [1[
Comparatively cheap private supplementary insurance
Efficient medicine in recent years has caused a real medical tourism [2[
Additional payments for private services are comparatively cheap [3[
Public hospitals and private clinics are available in large numbers
 Pensioners benefit from further benefits. After receiving a residence permit, foreign citizens can also benefit from the economical statutory health insurance (GSS) (Genel Sağlık Sigortası). For 2020, the monthly contribution is 706.32 TL (as of May 11, 2020 approx. € 92).
 Plastic surgery, dental surgery (implants, fillings, etc.), hair transplants, eye surgery, lung treatments, cardiovascular disorders, Turkey has earned an international reputation in a number of areas (reisetravel.eu).
 In addition to the nationwide supply of public hospitals, there is a large number of private hospitals. Many have framework contracts with statutory health insurance. Statutory health insurance also pays for all necessary (but not cosmetic) interventions for these, however, there are usually additional payments from the patient. Either you have private supplementary insurance here or you pay out of your own pocket. The additional payments are limited and are affordable for middle to high incomes.
The health sector can be divided into two areas, private and public.
- Statutory health insurance in Turkey
The state health insurance GSS pays, as described above, for treatments in public as well as in many private hospitals. You can inquire at the reception or by phone at the hospital whether the respective private hospital has an agreement with the GSS / SGK (Sosyal Güvenlik Kurumu, Social Security Institute) and is therefore subject to state health insurance.
Necessary interventions and treatments are therefore largely covered by the state health insurance even in private hospitals.
- Statutory health insurance for foreigners
Foreign citizens can also benefit from the GSS (Genel Sağlık Sigortası) statutory health insurance policy after receiving a residence permit. For 2020, the monthly contribution is 706.32 TL (as of April 19, 2020 approx. € 94). Insurance is not mandatory and can be applied for on request.
Private health insurance is offered by internationally known brands as well as by a number of Turkish insurance companies operating nationwide.
Investments in ultra-modern hospitals in recent years
Turkey has benefited from economic growth in the past 20 years. Despite various crises and dents in growth, per capita income and thus the standard of living of the Turkish population has increased significantly. In this period investments have been made in the health sector.
The growing demand for health services as a result of population growth, rising incomes and increasing health awareness form the basis for the development of a lucrative market for medical technology and high-quality services.
- Çapa University Hospital Istanbul
Capa is one of the oldest and best known university clinics in Turkey. It is a member of the network of Balkan universities and the Coimbra group. Exchange of staff agreements for study and training purposes have been in place since 1998 with the US University of Virginia’s College at Wise.
- Haydarpasa University Hospital Istanbul
Haydarpasa is a modern medical school in Kadiköy Istanbul. It is believed that the transition from Madrasah teaching to today's worldwide standard medical training in the Ottoman Empire, began on March 14, 1827 with the opening of the Imperial College of Medicine "Tıphane-i Amire ve Cerrahhane-i Mamure".
- Akdeniz University Hospital Antalya
At the Akdeniz University Hospital in Antalya, the structure of the central emergency department was further optimized in order to be able to better control the routes of the emergency patients. In addition to emergency care, attention is increasingly paid to the number of cases during planned interventions, and centers with established specialized diagnostics.
- More hospitals in and around Antalya
Antalya Akseki İlçe Devlet Hastanesi, Demre State Hospital, Elmali State Hospital, Finike State Hospital, Gazipasa State Hospital, Kepez State Hospital, Korkuteli State Hospital, Kumluca State Hospital, Manavgat State Hospital, Antalya Ataturk State Hospital, Antalya University Hospital, Serik State Hospital.
- Hospitals in Alanya
Baskent University Hospital, Alaaddin Keykubat University Hospital, Alanya Anadolu Hastanesi, Candan Private Clinic.
Corona virus-related treatments are free for all patients.
Private hospitals, some of them are world-class hospitals
High competition for the wealthy middle class has led to a real boost in the health sector with a whole range of well-known clinic groups and individual houses. Many ultra-modern hospitals, which are often better equipped than in some fully industrialized countries, have been built in recent years. In 2019, for example, 850,000 patient brought foreign funds of about 7.6 billion USD (GTAI) into the country. The number of patients is expected to increase to more than 1 million people in the foreseeable future after the corona pandemic has subsided.
The most important players in the Turkish healthcare system are the Ministry of Health (Sağlık Bakanlığı), the SGK (Sosyal Güvenlik Kurumu) and the General Directorate of Public Hospitals KHGM (Kamu Hastaneleri Genel Müdürlüğü, KHGM).
The Ministry of Health is responsible for the construction and operation of state hospitals through the KHGM. 90% of health care is provided there. Every year, about 10 billion USD flow from the state budget (GTAI) to finance the health system.
Private hospitals are more expensive than public hospitals, the additional payments are limited and services comprehensive.
- Private clinic: Istanbul Florence Nightingale Hospital (Istanbul)
The Florence Nightingale Hospital in Istanbul is part of the Florence Nightingale Group, which works with internationally known hospitals and medical schools around the world to provide their patients with the latest diagnostics and treatment methods. The hospital has been accredited by the Joint Commission International and is also ISO certified (JCI). The facility has an international department. Here, foreign patients receive support from consultants and interpreters. Medical needs, travel planning, requests for individual accommodation and leisure activities are coordinated here for the patient (Istanbul Florence Nightingale Hospital).
- Private clinic: International Hospital Acibadem (Istanbul)
The Acibadem Hospital is part of the Acibadem Healthcare group with 21 other hospitals and serves almost all medical areas from general medicine to gynaecology, neurosurgery and plastic surgery to orthopaedics and urology. When planning the building, the most common treatment steps were analysed as part of a holistic view, so that all wards and departments are easily accessible and long distances are avoided. The patient's safety comes first (Acıbadem Healthcare Group Head Quarter).
- Private clinic: Austrian Hospital St. Georg (Istanbul)
The Austrian St. Georg's Hospital, popular with Istanbulers, is located near the Galata Tower. It has existed since 1872 when the first so-called Austrian Merciful Sisters began caring for the sick. It was reopened in 2000 after a general renovation. In 2013 the hospital was enlarged again. It has had the quality management seal of TÜV SÜD for 4 years (Mission statement of the school) and offers medical services of the highest quality in various areas (Austrian St. Georg's Hospital).
- Private clinic: American Hospital Istanbul
The "American Hospital" is on the one hand a general medical hospital and on the other hand has intensive care units with the latest technology. It offers health services in practically all medical fields except psychiatry and transplantation. These two areas are managed by the Koc University Hospital, which also belongs to the Vehby Koch Foundation. Since 1995, ownership of the American Hospital has been transferred to the VKV Foundation. VKV has invested more than 300 million USD in recent years, making the American Hospital one of the country's leading hospitals (American Hastanesi).
Number of beds
The expansion plans of the Ministry of Health provided the construction of 31 more city hospitals with a total of 43,500 beds in 2018 (GTAI). Based on this overall plan, commitments to private investors totalling 11.7 billion USD were made for 21 projects. Eight hospitals were completed in 2019 and 23 city hospitals with 36,735 beds are under construction.
The largest city hospital in Istanbul district of Sancaktepe will be built with 4,200 beds. Another major project worth mentioning is the planned city hospital in Ikitelli district of Istanbul with almost 2,700 beds, which is the responsibility of Rönesans Saglik Yatirimlari (Rönesans Holding) in cooperation with the Japanese Sojitz Corporation. By the end of 2020, Rönesans plans to invest 4.3 billion USD in the Turkish hospital sector with a capacity of 9,500 beds under the public-private partnership (PPP) model.
Overview of hospitals in Antalya
Public hospitals by neighbourhood and district: Kamu Hastaneler.
University hospitals by neighbourhood and district: University of Hastaneleri.
Private hospitals by neighbourhood and district: Özel Hastaneler.
Overview of hospitals in Istanbul
Public hospitals by neighbourhood and district: Devlet Hastaneleri.
University hospitals by neighbourhood and district: University Hastaneleri .
Private hospitals by neighbourhood and district: Özel Hastaneler .
Latest hospitals by neighbourhood and district: Son Eklenen Hastaneler .
Overview of hospitals in Alanya
Public hospitals by neighbourhood and district: Kamu Hastaneler.
University hospitals by neighbourhood and district: University of Hastaneleri.
Private hospitals by neighbourhood and district: Özel Hastaneler.
Complete list of hospitals in Alanya: Alanya Hastaneler.
III. Investment programs to support the economy
Due to the limitation of border entries and exits, local curfews, closings of shops, restrictions of many services, periodic recession in exports and the further negative effects of the Corona pandemic, the Turkish economy is much more under pressure than it was before the outbreak of the crisis. To compensate the negative effects, assistance packages were launched across ministries for companies and remittance payments to retirees, employees and unemployed.
- Complete package
A 15 billion USD package to support the Turkish economy was unveiled on March 18. The Loan Guarantee Fund was increased to 7.7 billion USD. The goal is to give companies easier access to loans.
- Short-time work
Companies that have suspended their production due to the corona pandemic or had to partially shut down, can send their employees on short-time work and thus avoid redundancies. Retaining qualified personnel is said to contribute to a faster recovery after the pandemic. In this case, employees receive up to a maximum monthly amount of gross 4,380 TL from the public sector, the salary that corresponds to the last 12-month average. The application is straightforward and is made by the respective employer.
- Direct payments
For the unemployed and people who currently do not have any other government benefits such as unemployment benefits, a monthly transfer of 1,000 TL is paid during the crisis period to ensure a minimum livelihoods. This can be requested electronically through the (e-devlet) system and gets approved automatically.
- Other business support measures
- Tax deferrals
Turkey's finance minister announced tax cuts and other measures to stabilize inflation on March 31. After Albayrak's announcement to cut taxes, the stock exchange responded positively. For a limited time, the Turkish government has reduced, among other things, the special consumption tax for a variety of cars. In addition to the VAT of 18%, the special consumption tax is otherwise due when purchasing a new car. Its height depends on the engine size and the vehicle value before taxes.
Various other packages have been decided on. The current protection shield spans major parts of the Turkish economy through cost-effective bad debt insurance from state banks and discounted loans, especially for small and medium-sized companies (up to 25 mTL or up to 125 mTL annual turnover), to loans for larger corporations.
In addition, instalment deferrals or a review of the loan terms were decided for existing loans from state banks (e.g. Ziraat Bankasi, Halk Bankasi and Vakifbank).
A number of other measures have been decided, the above list does not claim to be complete.
IV. Current economical situation in Turkey
Measures taken by the central bank in the past 12 months
The Turkish Central Bank (TCMB) corrected the inflation expectations for last year 2019 from 9.3% to 15.2%. To combat inflation and favor investment, the key interest rate was lowered several times, most recently at the meeting on May 21, 2020.
- TCMB from 13.09.2019
- TCMB from 10/25/2019
- TCMB from 13.12.2019
- TCMB from January 17th, 2020
- TCMB from February 20th, 2020
- TCMB from March 18th, 2020
- TCMB from April 23, 2020
- TCMB from May 21, 2020
The table shows the interest rate development for one-week loan auctions (source: TCMB - 1 week central bank money). The interest rate for one-week central bank money is among other impacts essential for the determination of overnight deposits and an important reference for private investors. It also effects the conditions for property loans.
On the inflation side, the Turkish central bank now expects inflation of 10.01% by the end of 2020.
The Turkish government has repeatedly pointed out that, in order to contain the economic effects of the Corona crisis, financial markets should function smoothly and corporate financing must be ensured at all times. A further cautious expansionary course on the part of the Central Bank of Turkey can therefore be expected. Additional Corona-related liquidity injections for domestic banks at advantageous interest rates have been announced as needed. This can further reduce the costs of property loans and result in stronger property demand leading to property price increases.
Where does the Turkish real estate market stand?
At the beginning of the year, things looked good for the Turkish real estate market. Despite increasing regulation, significantly more was invested in newly-built apartments last year, and investors anticipated an attractive market environment for 2020. In February 2020 a total of 118,753 properties transferred, this corresponds to an increase of 51.4% compared to February 2019. Also the start in March 2020 was strong until the Corona-related shutdown, so that compared to the weak March of the previous year (March 2019) there was still a slight growth.
In the second half of March, the restrictions imposed by Corona then had a greater impact. The lower demand and the very limited possibility for property viewings led to a slump in the Turkish real estate market in April. This concerns rental and sale. The decrease in sales amounts to 55.5% compared to the comparative period last year.
Development of the Turkish Lira
The national currency, the lira, lost value against the dollar and euro in 2019, and this trend is expected to continue in 2020. The value of the Turkish Lira against the US dollar was around 12% in December 2019, up to 18% by early May 2020. The central bank's interest rate cuts, according to orthodox economists, result in a loss of purchasing power for the currency. On the other hand, interest rate cuts and cheap loans can favor investment and thus economic growth. It remains to be seen what effects will prevail in the midterm.
Resilience of the Turkish economy
Turkey has weathered a number of crises over the past two decades. The economic downturn caused by the dotcom bubble in 1999/2000 and the financial crisis in 2008 are examples. The ensuing euro debt crisis had again a negative impact due to the close ties with many EU countries and forced rapid adjustments. The ongoing stress tests have contributed to a resilience of the Turkish economy.
Rapid recovery after crises
A look back at the growth values in times of crisis shows that the Turkish economy generally recovers within two years after exogenous shocks. The economic downturn in 2001 after the dotcom bubble was - 5.96%. Already in 2002 the country returned to the growth path with 6.43%. Comparable to this, the year after the financial crisis in 2009 led to a recession of - 4.7% with growth of 8.49% the following year.
Turkey's gross domestic product growth rates since 1999 [1[
 Data based on World Bank statistics (GDP Growth Turkey - annual and in % ).
 Preliminary estimate.
The effects of the Corona crisis are not yet foreseeable. Market participants are counting on a rapid recovery for the time thereafter. Known development paths are a deep V or a U development. The V scenario means a steep downward trend, which moves up again just as quickly after reaching the low point. At a U, the bottom is longer until the economy picks up again.
Strongly positioned in many areas
The comparatively low level of public debt is often cited as an advantage of the country. This means a corresponding fiscal scope to support the economy and return to growth in the post-Corona period. In contrast, debt in the private sector is seen as problematic. In the past, companies have often taken out loans in Euro and US Dollar. A weak national currency further increases the interest burden on liabilities quoted in foreign currency.
Despite all the upheavals in day-to-day politics, Turkey is and remains strongly connected to Europe. There is a close economic connection that allows a positive outlook in the medium and long term. The majority of the Turkish population has an intensive focus on industrialized countries as a benchmark for the quality of public services, economic conditions, infrastructure, offers in the medical and cultural sector and much more. What is possible and trendy is sooner or later expected in the country, leading to constant pressure to change and adapt.
Another advantage is a large number of well-educated people and immigration from neighbouring countries. The relatively young population is developing a high level of domestic consumption. It is often unknown that in recent years the country has built up its own industry as well and now has a whole range of companies in mechanical engineering, automotive industry and other areas. For example, there are global supply chain production sites for Ford, Hyundai or Honda with automotive companies and international subsidiaries in Turkey.
Turkey as a bridge thanks to its geopolitically central location
Due to its location in Asia Minor and with its north-western provinces in Europe, the country acts as a natural bridge between the Middle East and Europe. Bordering Bulgaria and Greece, it touches the eastern border of the European Union. This unique location favours trade, travel and cultural exchange, along with economic advantages. Surrounded by three seas and the strategically important access to the Black Sea by the Bosporus, Turkey plays an important role in this part of the world.
V. Opportunity for property investors?
Prices in the Turkish real estate market are particularly dependent on demand. The background is a strong construction sector with many jobs. This leads to a comparatively stable supply and thus fluctuations in demand as an important factor influencing the price level. Real estate prices usually react with a delay of a few months. In principle, Turkey offers a well-functioning, dynamic real estate market, so that price adjustments can sometimes occur within a few weeks. Since the foreign demand means only small price effects due to volume, the prices of Turkish real estate are under pressure in view of the currently low domestic demand.
From the perspective of foreign buyers, another favourable factor is the current exchange rate of the Turkish Lira. However, the development of the Turkish Lira is not reflected one-to-one in the prices for condominiums and houses. This is because important preliminary factors in construction, such as energy and steel are either bought on the world market in US dollar (steel) or traded in US dollar (energy). In contrast, reductions in labour costs have a direct impact on the price of real estate in Euro or US dollar.
A special feature of the Turkish real estate market is that, unlike the automotive industry, in the midst of an emerging high demand, it was confronted with the Corona crisis and large parts of the industry were caught cold with it. Against this background, there are currently opportunities to get started with the right property.
Determining the Return on Investment (ROI) on real estate
The ROI is understood by investors as the return on a cash or property, plant and equipment or other (financial) investment which is achieved within a year. It is an important indicator for measuring the success of an investment. Annual income and expenditure are compared with one another for the return on e.g. rental or investment properties. In order to calculate the net return all additional costs, such as maintenance, taxes and duties, must be taken into account.
The rent should correspond to the attractiveness and equipment of the property and its location. Comparative rents are most commonly used to determine a market rent. Rental income is the first pillar of a property's return. The Corona crisis and the previously difficult economic situation are currently leading to rents rising less than expected in relation to inflation.
Increase in value
The increase in the value of a property means that the price of a home or condominium gains value over time. The property is then worth more than at the time of the purchase. Due to the low interest rates for real estate loans in Turkey and the current price level, the greatest return opportunities for real estate investments are currently against the background of expected increases in value in the coming years.
Depending on the purpose of the purchase, the correct time of the resale is most important for the total return. If the investment purpose is in the foreground, the capital should not be required at short notice, so that the resale can be conducted at a favourable time and short term price fluctuations can be waited out. The room for manoeuvre should ideally be two to five years. Experience has shown that this leads to the highest return in the leading property markets in Turkey.
ROI averages in Turkish property markets
3 to 5%
- Value increases
5 to 12%
As an orientation, an annual rental return of 3 to 5% and an annual value increase of 5 to 12% per year can be realized in Istanbul for example. The increase in value is more significant in the overall ROI calculation and can in some cases even overcompensate for negative effects from renting out the property. Apart from choosing the right property the ability of the investor to wait for the right time to sell is of most importance. In summary not being dependent on capital invested in property in the short term is the key to maximize ROI.
Price level justifies purchase recommendation
To put it bluntly, the current phase in the Turkish property market is more attractive than ever. Even if, from a conservative perspective, it is assumed that the Turkish Lira's depreciation against the US dollar of around 42% in 2019 had only a 33% effect (due to the above outlined nature of construction costs) on the prices of real estate, this means that Mediterranean living space on average is around 13.86% cheaper than it would be otherwise. Contrary to this trend, individual projects (e.g. at or close to completion) and locations show price increases in the same time frame. Premium constructors will sit out the crisis and not sell at reduced prices. Upside of this is that even in times of low demand Turkish properties proof their investment value.
It should be noted that the Turkish infrastructure, particularly in the conurbations of Antalya, Alanya, Bursa, Istanbul and many other regions, can certainly keep up with the holiday hot spots in Italy or Spain or in some areas (see medical care) is even at a higher level. Since this knowledge has not yet hit international markets with a lot of spread, Turkey is still a bargain when it comes to property prices located near the sea with mild climate and good infrastructure.
VI. Buying property despite current travel restrictions?
We recommend under normal conditions before every purchase decision or e.g. a deposit for new construction projects an extensive on-site visit in which we can answer all your questions. In every crisis, however, you have to react flexibly in order to be able to meet customer requests. To be there for you with all our services in Corona times, the Timondro network now offers virtual tours in most its locations in Turkey. Especially in the current correction phase on the Turkish real estate market, some customers want to take advantage of opportunities to buy and not wait for the travel restrictions to be lifted.
Pre-selection on the internet
We guarantee our customers as usual with our careful pre-selection (services) at our locations in Turkey the variety on the market at market prices and with highest quality standards. The teams of the Timondro network are constantly scanning the market and negotiating best deals for our customers for newly built constructions as well as for used properties in top condition. This saves buyers time and enables them to find a beautiful property in a manageable time frame that also corresponds to what they have envisioned and fits their budget.
We help to avoid unnecessary fruitless discussions and advise potential buyers on the best local offers and market prices. By an open communication that addresses the pros and cons of current market offers, we create a pleasant atmosphere so that customers can negotiate prices and conditions at eye level. After thorough examination of the preferences and clarification of questions from interested parties, experience has shown that we are able to make or recommend a specific selection that fits the interests of our customers for a comprehensive viewing tour.
Virtual sightseeing tours
Based on the pre-selection, you can arrange an appointment for a virtual tour with your property consultant. We ask you to take two to three hours depending on the number of properties to be viewed on the day in question. Using Skype, Facetime, WhatsApp or other video call applications, we take you on your personalized viewing tour in e.g. Istanbul, Antalya, Belek, Kemer, Trabzon or Alanya.
We are happy to answer any questions you may have upfront and set up your viewing tour - Contact us today!