Criteria for Pricing an Apartment
Ministry of Treasury and Finance and the Ministry of Environment and Urbanisation announced gross construction cost for 2019 regarding luxurious real estate market as 2.850 TL per square meter. If the elevator and air conditioning are included, this amount should be raised to 3.250 TL per square meter. Value of land is not included in abovementioned amounts.
In this case, if the construction of an apartment with a gross area of 100 square meters cost 325,000 TL, why sales prices vary between 400,000 TL and 4,000,000 TL?
The above calculation is only effective for construction materials. Costs of labour, architectural services as well as the most important factor, which is the land – and more specifically, city/district/neighbourhood, where the property is located, are also influencing the value of the property. When evaluating the district, many criteria should be taken into consideration:
In non-metropolitan cities, districts, where the governorates are located, are considered as the city centre. If the neighbourhood is located close to the city centre, the price of real estate will be also higher. Price of a property will also raise if it is located close to the sea coast or to the main roads.
The infrastructure of the district (public transportation stops, schools, hospitals, etc.) and social facilities (shopping malls, parks, shopping areas etc.) are the factors that make the district more expensive. Of course, the situation is a bit different in Istanbul, which is one of the world’s oldest and most recognized cities, spread between two continents with an official population of 16 million. For example, there is no specific city centre in Istanbul. It has a centre for every aspect (historical, commercial, entertaining, touristic). Moreover, these centres are situated on two different continents.
You can see the most expensive districts of the three biggest cities in Turkey in the chart below:
Can a new apartment of the same size be at the same price in Beşiktaş and Sancaktepe? YES!
Location of the Project
In addition to the factor of which district the property is located in, it is also important in which part of the district the building complex is settled.
- Walking distance to the shopping mall, school, hospital, park etc.
- Easy Access to public transportation and main roads
Can be two different apartments in two different buildings, which are next to each other be purchased at a different price? YES!
Companies that have proved their success, are reliable and can bring profit to the investors through their branded housing projects, will want to benefit from being recognized in the market and from their reputation. Hence, according to how many builders or developer company is long-established and well-known, this much higher the prices can be.
*Companies themselves can be perceived as specific class regarding the location (what is directly influencing the price).
Finishing of the apartment
- Quality of construction materials
- Additional systems used for the comfort of the home (smart home, automatic curtain, dressing rooms, built-in furniture)
- Brand of air conditioning, white appliances and elevators
Features that will improve your comfort in your daily life and also will increase the price of the property. For example:
24/7 security, landscaping, own metro station, dedicated parking lots, indoor/outdoor swimming pools, fitness, sauna, Turkish bath, basketball-football-tennis-squash courts, children’s playgrounds, cinema or hobby rooms, cafes and similar areas reserved for the tenants of the building, guest rooms, capacity of generators and water tanks.
Can the prices of two different apartments in the same project be different? YES!
Number of rooms
Prices of apartments with more rooms or larger apartments are higher in total but those are actually cheaper if we take the unit price (m² / TL) under consideration.
Can the prices of two apartments in the same size within one project be different? YES!
Just like five fingers of one hand are not the same, the prices of apartments in the same project and building are different. This difference can be explained with various reasons. As a few examples:
- Prices increase according to the floor on which the apartment is located
- Ground floor apartments are more expensive than those, which are located on any of the few following floors over it
- If there is no distinctive view on the other fronts, the south side of the building is the most preferred as rooms on that side receive the most sunlight. For the same reason, the least preferred apartments are those located on the northern side
- Apartments located on the corner are the most expensive
- Apartments facing more directions (3-4) are more expensive
- Apartments with a bigger number of toilets/bathrooms are more expensive
- Apartments with a closed kitchen are more expensive