Arnavutköy is one of Istanbul’s most beautiful – and most overlooked – neighbourhoods.A melting pot of Turkish, Greek, Jewish and Armenian heritage, Arnavutkoy is famous for its wooden yalis, Ottoman-era mansions built from timber and embellished with Art Nouveau decorations.he thing that sets Arnavutkoy apart from other parts of Istanbul is its majestic waterside residences – tall and slender houses with florid windows, shutters and stacked balconies, all fashioned from timber and painted in a spectrum of muted peach, lilac and cream.