How Earthquakes Impact the Turkish Real Estate Market: Earthquake Insurance and Building Regulations in Turkiye
Turkiye is located in a region where earthquakes are relatively common, and over the course of its history the country has experienced several major quakes. In this blog post, we’ll take a look at the history of earthquakes in Turkiye, the insurance options available to those who want to protect themselves from such disasters, the impact of earthquakes on the country’s real estate market, and the measures that the Turkish government is taking to ensure that future buildings are more resistant to seismic activity.
Earthquakes in Turkiye: A Historical Overview
Earthquakes have been a part of the Turkish landscape since ancient times, and many of them have been devastating. The most famous of these is probably the M 6.9 quake that struck in the city of Antioch in 526 AD. This powerful temblor caused massive destruction in the city and its surroundings, killing over 250,000 people. In 1509, a similar quake destroyed the city of Istanbul, leaving thousands dead and causing extensive damage. In 1999, an M 7.4 quake struck the city of Izmit, causing severe destruction and claiming the lives of over 17,000 people.
Earthquakes and Real Estate in Turkiye
Although earthquakes in Turkiye have caused untold destruction over the years, they have not had a major impact on the country’s real estate market. This is due to the fact that most buildings in the country are built to strict standards that meet or exceed the requirements of international building codes. This means that the damage caused by earthquakes is usually localized and affects only a small number of buildings.
Government Prevention Measures
The Turkish government has taken a number of measures to ensure that buildings are constructed to resist earthquakes. According to the U.S. model building codes and standards , seismic requirements have been updated through the volunteer efforts of design professionals and construction teams. These requirements include the use of reinforced concrete frames and shear walls to increase the stability of buildings, as well as the use of seismic dampers to absorb shock and reduce the potential for collapse. In addition, all new buildings must be constructed to meet or exceed specific seismic and wind resistance codes. As of the time of the earthquakes that struck Turkiye , some 3450 buildings had collapsed due to weak construction, highlighting the need for improved safety standards. As the rebuilding effort gets underway, it is likely that stricter building codes and enforcement of existing standards will be necessary in order to ensure the safety of the people living in these areas.
Types of Earthquake Insurance in Turkiye
Turkiye is located in a very active seismic and volcanic region, making it vulnerable to earthquakes and other natural disasters. As a result, all property owners in the country are legally required to purchase insurance against earthquakes, which covers the costs of restoring damage caused by these events. To ensure an efficient and effective response to these disasters, the Turkish Catastrophe Insurance Pool (TCIP) was established in 1999. The TCIP is designed to reduce the government’s fiscal exposure to EQ risk, as well as to bring confidence and trust to the Turkish insurance industry. This program has been successful and has inspired many other countries to create similar programs of their own.
In Turkiye, there are two types of earthquake insurance: Compulsory Earthquake Insurance (DASK), which is required by law, and optional insurance, which can be purchased separately from a private insurance company. DASK covers material damages to the building or dwelling, such as foundations, walls, and elevators, and pays out damages as cash. It is renewed annually and the cost is based on factors such as the building type, year of construction, number of floors, and earthquake risk group. Optional insurance covers additional property inside the house, such as furniture or other valuables.
Is Turkiye Safe for Real Estate Investment?
Turkiye remains a safe place to invest in real estate despite the recent earthquakes. Although the two major faults in the region make it prone to earthquakes, the government has implemented strict building standards and regulations in some areas, making them more resilient to seismic activity. Additionally, the government has made earthquake insurance compulsory for both residential and non-residential real estate, which reduces the financial burden for property owners. Underdog technologies such as generative artificial intelligence are also being used to better predict and prepare for future seismic events.
Does Turkiye Prevent Vertical Expansion of Construction in Earthquake-Prone Areas?
The government of Turkiye has implemented strict regulations on the vertical expansion of construction in earthquake-prone areas. This means that construction of additional floors on existing buildings is prohibited in areas that have been identified as at risk of seismic activity. The government has also implemented measures to ensure that new construction projects take into account seismic safety, such as ensuring that structures are built on solid foundations and that they include features such as a reinforced roof, walls and columns.
These measures are not only intended to protect citizens from the immediate danger of an earthquake, but also to ensure that any damage caused by an earthquake is minimal. For example, if an earthquake occurs and a building is only one or two stories high, it is much less likely to suffer major structural damage and collapse than if it were taller. It is also much easier to repair and rebuild a one- or two-story building than a taller one.
In addition to these regulations, the government of Turkiye has also implemented other measures to reduce the risk of damage from earthquakes. These include the adoption of building codes that require the use of seismic-resistant materials, the monitoring of seismic activity, and the installation of early warning systems in areas at risk of earthquakes.
How Do Earthquakes Affect Real Estate Prices in Turkiye and Eslewhere?
The impact of earthquakes on real estate prices in Turkiye has been the subject of a number of studies. In a study conducted by researchers from Istanbul, it was found that the spatial impacts of changes in the perception of earthquake risk are not transmitted equally across the country. Rather, it was found that submarkets at the cheaper end of the market have proportionately larger negative impacts on real estate values. Other studies conducted in the region have found similar results. In addition, research conducted by CoreLogic Chief Economist Dr. Frank Nothaft noted that within three months of a natural disaster, there is a huge spike in serious delinquency rates on mortgages, regardless of the amount of actual damage caused. This increase in demand for housing in the affected areas leads to higher prices and rents in the surrounding area. Ultimately, earthquakes can have a significant impact on real estate prices in Turkiye.
A Word to the Wise
Before investing in the Turkish real estate market, real estate investors should make sure they have enough information about the market and the local regulations. It is important for real estate investors to seek the help and guidance of a reliable real estate company to identify earthquake-resistant projects and make sure their investments are safe and secure. A reliable real estate company can provide valuable insights on the Turkish real estate market, taking into consideration the size, location and other factors. Furthermore, they can connect investors to reliable contacts to ensure a smooth and successful purchase.
To find ideal, resistant projects within your budget, contact us at Investo Global today!