Turkey has started to gain more attention with the complication of property ownership in Europe and visa issues for Russians. This country used to be one of the focal areas in terms of acquiring a home. Today, it has on the shortlist. Previously the country was associated with the “cheap real estate” concept but now the association is completely different, from the “prestigious housing” concept.
Specialized analysts summed up the sales results for the past decade. After all, 2013 was the year when transactions with foreigners began to be taken into consideration. As a result, Turk Estate is eager to share a lot of interesting statistics and specific figures with its readers.
Content:
- 10 past years and 0.3 million transactions
- From 1% to 6%
- In the past decade: Istanbul and Antalya have been in favor
- Iraq, Iran, Russia, and Saudi Arabia are “Leaders”
- The growth in real estate prices in foreign currency
- What is the profit?
- Summary
10 past years and 0.3 million transactions
How many residential units have been purchased by foreigners on the territory of the Republic of Turkey during the last decade? The figure is impressive and more than a third of a million.
To sum up the results of sales for the years 2013 to 2022- in general, 25 of every 1,000 housing units became the property of overseas investors. This amounts to an average of 2.5%.
As of the beginning of summer, the annual increase in the value of residential real estate reached about 150% in Turkey. The key role of foreigners in this meteoric "rise" is discussed with surprising regularity as the percentage of non-resident buyers is growing.
In just the first half of 2022, 49 out of every 1,000 residences sold were purchased by foreigners. And this is the “average temperature in the hospital”, in other words, in the whole country. The above-mentioned indicator is a lot higher in Antalya, the “resort capital”, as well as in Istanbul. In Antalya, this is more than 25% (257 out of every 1,000 units sold), and in Istanbul, it is more than 11% (111 in every 1,000, respectively).
According to the Turizmgunlugu.com portal, based on Euronews statistics, the exact number of properties purchased by foreigners over 9.5 years amounted to 314,310.
From 1% to 6%
Information provided by the Turkish Statistical Institute (also known as TÜİK) clearly shows how the number of housing units bought by non-residents has increased exponentially during recent years:
- in 2013, foreign investors purchased 12,181 residences in Turkey, but in 2014, this number grew to 18,959 residences;
- in 2015, the threshold of 20,000 real estate transactions was overcome for the first time -(22,830);
- in the following year, 2016, there was a slight decline to 18,189 residences. It was partly caused by both economic and political events (a failed coup attempt, a sharp － albeit temporary － cooling of relations between the Russian Federation and Turkey);
- in 2017, sales were “back to square one”: the number of transactions once again crossed the 20,000 units mark. In addition, it significantly exceeded this threshold by more than 10%, - up to 22,234 sales;
- in 2018, referred to as the “famous” year, foreigners bought 39,663 housing units. An increase over the previous year almost reached 50%;
- in 2019, the number of transactions rose to 45,483;
- 2020 could have been better if not for the pandemic with lockdowns, flight cancellations, etc. However, the “post-pandemic effect” was partly the reason for an increase in the desire of many investors to acquire apartments or even seaside houses. So, the number of transactions decreased in comparison with 2019 but, in the context of the whole situation, never dropped too low - only by about 10% (40,812 transactions).
- The second “pandemic” year, 2021, once again showed a 50% robust growth, exceeding even the most optimistic expectations of market players. Experts hoped to sell 50,000 housing units. It exceeded this forecast by almost 20%. In 2021, foreigners bought 58,576 residences.
- And the last year of the “accounting period”, 2022, will presumably become the “second star year”. In the first six months of the current year alone, nationals of other countries became the owners of 35,383 homes on the territory of the Republic of Turkey. By the end of July, this figure was already close to 40,000 units.
To make the numbers tally, from 2013 to 2022, foreigners bought 314,310 residential units in just 9.5 years. Even though the total number of residences sold in the country was 12.8 million during the same period.
However, once again, on average, overseas nationals acquired every 25th residence. It's also a good idea to look at the following comparable, curious dynamics:
- foreigners purchased 11 out of every 1,000 housing units sold in the country in 2013;
- in 2014 － 16;
- in 2015 － 18;
- in 2016 － 14;
- in 2017 － again 16.
Then the “share” of foreigners started to “climb up” steadily. In 2018, this figure rose to 29, in 2019 － to 34, in 2021 － to 39, and in the first half of 2022 － to 49.
That is to say, 4.9% of real estate transactions in Turkey are by citizens of other countries. According to the data collected at the beginning of summer, this share increased by more than 5%. This figure exceeded all expectations.
It is impossible to ignore the indicators of June of 2022, another “starry” month. According to official data released by TÜİK, home sales to foreigners grew by 81.8% in June 2022 alone, compared to the same month of the previous year. They peaked at 8,630 units. In the same month, for the first time, the share of sales of residential real estate to overseas buyers amounted to 5.7%.
The indicators in the first half of 2022 are also impressive. From January to June, the volume of transactions with foreigners increased by 72.7% compared to the same period last year. This equaled 35,383 units.
In June alone, the number of sales to foreign clients grew by 81.8% compared to the same month in 2021 and broke a previous historical record.
In July, however, sales slowed down somewhat (not only to foreigners but across all “fronts”). However, according to the results of seven months, overseas investors acquired 39,322 housing units, even though they purchased less than 60,000 for the whole of 2021. In other words, it took a little more than half a year to execute two-thirds of last year’s “norm”.
In the past decade: Istanbul and Antalya have been in favor
As for the cities preferred by foreigners, the choice of foreign investors is quite clear with no surprises in the past 10 years. According to the most recent reports, in most cases, Istanbul, the largest Turkish metropolis, leads in terms of sales, except for certain months like July 2022.
Antalya takes second place, with an occasional shift to first or third position.
Covering the period between 2013 and 2022, foreigners purchased 125,179 residences in Istanbul over 9.5 years. In Antalya, this figure peaked at 74,065 people.
The capital of the Republic of Ankara is also in high demand, though to a lesser extent. There were 15,435 transactions in less than 10 years.
As a result, 40% of the residential units purchased by overseas nationals are located in Istanbul. During the last 9.5 years, 24% were in the province of Antalya (including Alanya). In Ankara, this share is 5%.
The provinces preferred most are the following:
- Mersin, a rapidly developing province, with the first Akkuyu NPP in Turkey (it is a seaside town, earning it extra attention and popularity);
- Mugla, a province with famous resorts such as Bodrum, Fethiye, and Marmaris;
- Izmir;
- Aydin (location of the major port and resort of Kusadasi);
- Sakarya.
Unfortunately, the analysts could not give exact figures for these provinces as the number of transactions with foreigners was not recorded for some years.
As for the share of foreigners in the total sales, foreign investors purchased every 12, or 12%, of 100 residences over the last decade (10 years) in Antalya. Every 5 out of 100 homes (5% respectively) were bought by non-residents on the territory of Istanbul.
However, the indicators for 2022, a year that has now passed the halfway mark, are strikingly different as they are much higher. In particular, every 4th housing unit in Antalya, or 26 out of every 100 homes, was purchased by overseas buyers (26%). In Istanbul, this is a little more than every 10th unit (11 out of 100, or 11%). These are the results covering the period from January to June, that is, for the first half of the year.
According to the results of the “famous” June, Istanbul took first place with 3,906 transactions with foreigners. The second place is shared between Antalya, with 2,534 residences, and Mersin, with 428 residences.
In Istanbul, the share of transactions of foreign buyers in June was already at 14%. In Antalya, it increased to 31.5%.
The latest information statistics for July showed that in the seventh month of the year, Antalya had already “overtaken” Istanbul in quantitative terms. Antalya took first place in terms of volume, with 1,421 housing units, followed by Istanbul with 1,154 sales. Mersin was in third place with 289 sales.
Iraq, Iran, Russia, and Saudi Arabia are “Leaders”
Iraq, Iran, Russia, and Saudi Arabia are the top 4 countries among the states whose citizens purchase the most housing in Turkey.
Citizens of Iraq became foreigners purchasing the most houses in Turkey in less than a decade (over 7.5 years from the beginning of 2015 to the first half of 2022).
This is an even shorter period. It is impossible to provide accurate data for the first years of the last decade. The Iraqi people acquired 46,230 residences, followed by the citizens of Iran, who have bought 33,404 residences.
Russia is rapidly gaining pace with the purchasing of 24,877 housing units.
However, for four months starting from April 2022, Russian nationals have been buying the most apartments and houses in Turkey. They have “surpassed” the previously recognized leaders (Iran and Iraq).
By the end of the year, the “ordinal numbers” in the top 4 may subsequently change.
For the time being, the focus right now is on the available figures. The citizens of Iraq “got” 16% of the housing. 12% was purchased by Iranians and 9% was bought by Russians over 7.5 years.
Unfortunately, TÜİK did not take into consideration the information about home sales to citizens of Saudi Arabia in 2021-2022. But their “result” is also remarkable compared to previous years. Between 2015 and 2020, the citizens of this country purchased 13,540 residences in Turkey. So, hypothetically, they could “overtake” the Russians.
The residents of the following countries are also actively involved in the process of buying Turkish apartments and houses:
- Kuwait – 13,495 residential units purchased;
- Afghanistan – 13,106;
- Germany – 10,981.
It is good to bear in mind that the “top-10” situation may change noticeably by the end of 2022. Indeed, due to political events, not only Russians but also Ukrainians are building up the volume of transactions beginning literally with the last days of February. To date, the number of sales to citizens of these two countries has grown so much that it can even affect the decade statistics.
Let us recall the June indicators. In Turkey, this month is recorded as one of the most successful months in terms of the volume of transactions on residential real estate made by citizens of other states.
In just the sixth month of the year, citizens of the Russian Federation purchased 1,887 houses in Turkey. Even though they bought 400-500 houses per month before the outbreak of the armed conflict. This figure has therefore increased almost five times. Remember that in January this figure was 479 units, 509 in February, and 547 in March; and then the numbers skyrocketed to 1,152 in April, 1,275 in May, and 1,887 in June.
The number of houses purchased by Ukrainian citizens also tripled, from 102 residences in January to 301 in June.
The growth in real estate prices in foreign currency
According to the housing price index announced by the Central Bank of the Republic of Turkey, (prices) rose by more than 150% at the beginning of summer. It is crucial for those who analyze the “export” of housing to realize that is an increase in foreign currency, not in local Turkish lira.
The next indicator was as follows. From January 2021 to April 2022, the average price per square meter of residential real estate put up for sale increased by 171% in Turkish lira and by 36% in dollar equivalent.
What is the profit?
Foreign home sales reached record highs in June 2022, with the share of overseas buyers almost peaking at 6%, The income from selling real estate to non-resident investors has been calculated and publicly announced according to this fact.
As per officially released information by the Central Bank of the Republic of Turkey, in June 2022, the net profit from transactions with foreigners reached the highest at $1.144 billion. In the first half of 2022 alone, between January and June, the transaction amount was valued at $3.485 billion (this is the so-called “dirty profit”). A new “victory” became obvious after the previously recorded figure of $ 3.651 billion, reported in the second half of the “famous” 2018.
Market participants attribute this to the depreciation of the Turkish lira, as well as the ongoing practice of granting citizenship to foreigners through a streamlined procedure in exchange for a real estate purchase.
It has long been clear that “international” demand for Turkish properties increases the value of real estate throughout Turkey, which significantly complicates the situation for residents (Turks). Fewer and fewer people can afford their own houses. The Government also continues to encourage “foreign” real estate transactions. Since these are infusions of foreign direct investment into the country's economy in foreign currency ( de jure – in Turkish liras, but de facto – in terms of the dollar or euro rate on the day of the transaction).
On the demand side, the strengthening of foreign currencies instead of the lira and the fact that many wealthy individuals in Arab states and the Middle East are trying to “escape” from internal instability in their homeland “work” for real estate sales in Turkey. Since Turkey is both a Muslim nation and one that is similar in terms of culture and climate, it is evident why they choose it. Additionally, numerous transactions concluded by Russians and Ukrainians over the past six months could not fail to affect the “infusions” into the treasury.
Summary
The conclusions are obvious: Turkish developers have become more active, shifting to foreign customers. They select neighborhoods that are popular with foreigners, purchase land there, and start developing apartment complexes and other detached buildings (villas, etc.) that are as “foreign investor-friendly” as possible.
Their prices keep going up. Thus, the advice is similar to that given in previous months: rather than becoming cheaper, Turkish real estate will increase in value over the next few years. Therefore, it is best to move quickly– but also not to rush into the choice – for those who are considering buying a property in this sunny country with breathtaking scenery.
Choose the most knowledgeable partner to assist you in the home-buying process. This person should be able to advise you on the project that will best meet your needs from a developer that you can trust. Carefully consider all your options. Fortunately, there are plenty of them in Turkey.