Content:
- Russians Rank First
- Other Leading Countries
- Citizenship by Housing
- Priority Cities and Investments for Citizenship
- Opinions of Industry Experts
- The Ban on the Sale of Housing to Foreigners has been Postponed Indefinitely
Russians Rank First
The beginning of 2022 will be memorable in terms of property purchases by foreign nationals in Turkey. Russians have been buying the most residential real estate in Turkey for the second consecutive month. They have remained stable as the “top three”, and are now ahead of the former favorites (citizens of Iraq and Iran) by a huge margin. In April 2022, Russian citizens purchased 1,152 apartments or houses, Iranians purchased 905 housing units, and Iraqis purchased 714. The increase compared to April 2021 was 186.6%.
In May, the gap widened further, when Russians bought 1,275 housing units, Iranians, 736, and Iraqis, 617.
Other Leading Countries
Housing sales to Ukrainians also increased in April, and by almost the same percentage, at 185.9% compared to the same period last year, increasing from 92 to 263 units.
The investment growth of citizens of both countries was significantly higher than the average of 58.1% (in April, foreigners purchased 6,447 residences in Turkey. Which is 58.1% more than in April last year).
In May, the number of transactions with buyers from abroad increased by 235.7% compared to the same month last year with 5,962 units. Most of the buyers were from the Russian Federation. In May, Russians purchased 1,275 apartments or houses in Turkey. Iranian citizens ranked second (736 housing units), and Iraqis took third place (617 housing units).
The rest of the countries, including Iran and Iraq, lagged behind Russia during May. German citizens did 247 deals, and Ukraine, 241.
Citizens from Afghanistan, Kazakhstan, Ukraine, Germany, and Azerbaijan purchase 200 or more housing units in Turkey every month. The rest of the countries have lower indicators, although the United States of America and China are gaining momentum.
According to data released by the Turkish Statistical Institute, sales of houses to foreigners in January-April 2022 increased by 48.9% and amounted to 20,791 units. The transaction figures for the first 4 months (in January-April) were the highest ever.
At the end of May, the figures soared much more sharply, when the volume of residential property sales to foreigners for January-May increased immediately by 70.0% compared to the same period in 2021. In total, 26,753 housing units were purchased in 5 months.
Citizenship by Housing
The results of the first quarter on purchases to hurriedly obtain citizenship:
(It is too early to predict what will happen in the second quarter. A report on the number of transactions for May has been published, and we have to await the results for June, which will be ready only in mid-July).
According to the investments made by foreign nationals in Turkey to obtain citizenship in the first quarter of 2022 for all types of real estate, Iran took first place. Followed by Iraq, Afghanistan, Yemen, Pakistan, Palestine, China, Russia, Algeria, Jordan, and Lebanon. (Let us clarify that at the time of reporting, the political confrontation between the Russian Federation and Ukraine had not yet had time to affect sales; this effect will "manifest" at the end of the second quarter).
The amount of money that foreign nationals spend on buying housing in Turkey has increased significantly due to the recently adopted decree on increasing the minimum limit for participation in the citizenship by investment program from $ 250,000 to $400,000. This did not affect their choice of city.
Priority Cities and Investments for Citizenship
EVA Gayrimenkul Degerleme analysts assessed real estate investments made by foreigners in Turkey to obtain citizenship, according to the results of the first quarter of 2022 (January-March).
Again, as of the end of the first quarter of 2022, 31.8% of investments made by buyers from abroad were aimed at applying for speedy citizenship.
In general, 3 priority cities for foreign buyers – Istanbul, the "resort capital" of Turkey, Antalya, and the official capital of the Republic of Ankara – accounted for almost 90% of real estate purchased for citizenship.
These were the top 3, but there are other popular cities. Yalova, Izmir, Mersin, Mugla, Bursa, Trabzon, and Sakarya (in descending order; they also entered the TOP 10) follow behind Istanbul, Antalya, and Ankara.
As for the districts, Esenyurt, Beylikduzu, and Avcilar were among the top 3 in investment preferences in real estate in Istanbul for obtaining citizenship by foreigners.
They are followed by Kagithane, Basaksehir, Buyukchekmedje, Bagcilar, Fatih, Kyuchukchekmedje, and Zeytinburnu, respectively.
Opinions of Industry Experts
So, what do the representatives of the construction and development sectors of Turkey say about this, having assessed the figures and statistics?
“It will be easier to buy, and the range will become wider"
The Chairman of Özyurtlar Holding, Tamer Özyurt, who always gives useful comments on the figures and indicators voiced by analysts, does not doubt that "... Turkey has confirmed that it continues to remain in the spotlight of foreign investors." Mr. Özyurt recalled that it came down to the need to adopt certain rules that would eliminate some difficulties in selling residential real estate to foreign nationals, regarding the nuances of registration, etc. Now that several steps have been taken in this direction – some procedures have been debugged and tested – the figures, in his opinion, will be much higher.
Tamer Özyurt also suggested that the packages of measures to support developers and construction projects that meet certain requirements will soon increase the supply on the market, which will also be of benefit.
"Faith in the Turkish real estate market is growing"
CEO of Bahaş Holding Abdussamet Bahadir also stated that interest in Turkish projects and, so to speak, the faith of overseas investors in Turkish real estate continues to grow. He also gave a reminder about the order that appeared not so long ago that citizenship under an accelerated procedure can be obtained not only by purchasing residential real estate but by depositing $500,000 or more into the pension fund of Turkey. Moreover, it is enough to keep the money in this account for only three years.
Thus, it is possible to choose a place of residence "for living" and /or renting, without investing a lot of money in housing "for obtaining citizenship". "... This means that we may soon face greater interest from overseas investors. The market will revive," the specialist explained.
"Antalya has become a favorite of international housing investors"
Chairman of the Helmann Yapı Board Selman Ozgün drew attention to the growing interest of international investors in Turkey and said: "The demand from foreign investors is higher than that of Turkey's competitors in Europe. Our influence is great, and we will become one of the leading countries selling residential real estate to foreigners." Antalya, according to Selman Ozgün, since the beginning of the armed confrontation between Russia and Ukraine, is the undisputed favorite.
"Work remotely from Turkey"
Akzirve sales manager Hakan Sabbagh also said that the Russians have increased their investment in housing in Turkey since the beginning of the military actions: "In April, the number of residences that Russians bought in Turkey grew by 186.6% to 1,152 units. Turkey is the safest country for Russians. We hear this from them, including managers representing Russian employers, who recommend their employees work remotely, for example, from Istanbul."
In addition to the influx of Russian buyers, Hakan Sabbagh also noted a gradual increase in injections from abroad to purchase residential real estate from countries such as Kazakhstan, South Korea, and China.
The expert suggested that foreign investment in Turkish housing will grow much more in the summer, especially from the interested parties from Saudi Arabia and some Gulf countries, but the Russians will also continue to actively buy property in the country.
Expatriates' Interest in Selling Homes will Soon be Reflected in the Numbers
Ihsan Culhalik, Chairman of the Board of Insay Yapı, mentioned in his statement that the sale of housing to foreigners tends to increase, and said that the interest of expatriates will be reflected in the figures. This was influenced not only by political events but also by the high exchange rate of currencies, thanks to which Turkish real estate is becoming more profitable in terms of the acquisition.
In previous years, according to Ihsan Culhalik, expatriates preferred to buy houses in those cities that they had chosen to live in in Turkey. However, this interest has shifted to large cities, where people have started buying apartments and houses for investment. "The advantage of the exchange rate makes ex-pats show interest in high-return projects in large cities, more often in megacities”.
Adding to the opinion of colleagues, the specialist clarified that, according to his observations, there is also high interest from citizens of Germany, Belgium, Switzerland, England, the Netherlands, France, and Austria. Moreover, interested parties from these countries consider a variety of types of apartments.
The Ban on the Sale of Housing to Foreigners has been Postponed Indefinitely
Some time ago, there was news in the media that frightened potential investors from abroad: Ulas Karasu, a member of the Party Assembly of the Republican People's Party (CHP) and a deputy of Sivas announced the idea of a bill to suspend housing sales to foreign citizens for 2 years. Referring to the fact that "this is not enough for us." Here is his quote: "According to research, the average rental price in Istanbul is 6,500 Turkish lira. In our country, where the minimum salary is 4,253 liras, rental rates have become inadequate. Houses for sale or rent cannot meet the demand in the domestic market. The construction cost index and housing prices, which include inflation, can be adjusted in at least 24 months if we act correctly. Then it will be possible to reduce the gap between the supply of housing and the demand for it in the domestic market.
Millions of liras have been spent on attracting investments from the Persian Gulf region, while students, pensioners, and workers – millions of citizens of the Republic of Turkey – cannot purchase housing."
However, due to the same active "promotion" of Turkish housing in overseas markets, which has spent a lot of effort, time, and money, and the growing interest of foreign investors in apartments and houses in Turkey, this proposal was considered unprofitable and postponed indefinitely so that potential buyers could relax.