After a construction project is completed, many units may be put on sale at lower than market prices. This has to do with how most residence properties in Turkey are developed.

Let me explain with an example. Imagine there is an old factory in a less central area on the European side in Istanbul. This factory is owned by one single landowner. It is much easier to build a large project on land with only one owner. A construction company makes the following offer to the landowner: Hand over the land and I will demolish the old factory. Then I will build a large residence property complex, with let’s say 200 units. In return, the construction company offers the landowner between 20 and 50 percent of all newly built units. The exact figure mostly depends on the land value. So the construction company does not pay any cash for the land. In return the landowner receives between 40 and 100 units in the finished project.

Then construction starts. Very often, electricians, plumbers and other craftsmen are also paid partly with apartments. Let’s assume these subcontractors receive 10 units in total. At the end of the project, the landowner owns, for example, 80 units and the subcontractors 10 units. This model is very lucrative for all parties. In particular the construction company receives 110 units with very limited cash investment. 

But what happens after the project is completed? The landowner and the subcontractors usually start selling most of their units. And since they have many properties for sale, they are willing to accept discounts. Sometimes the construction company and the landowner agree on a waiting period before selling. But in the end most units will be put on sale.

In summary, if you buy off-plan and consider selling after a few years, you will be competing with many sellers from the same project. This reduces your expected return on your investment apartment in Istanbul.