Property sales to foreigners in Turkey: Results of 2023 and forecasts for 2024

Property sales to foreigners in Turkey: Results of 2023 and forecasts for 2024

 In 2023, property sales to foreigners in Turkey halved to 2.9%, as per the latest data. This decline continued in February, with the number of transactions with foreign investors dropping to 2%. Overall, the total volume of sales in the country fell by 17.5%. However, analysts expect property prices to rise. This is attributed to an increase in construction costs and a decrease in supply on the market. Bayram Tekçe, president of the Real Estate Service Exporters Association (GİGDER), offered insights into the market situation.


Tenants and investors can share rights

"The sales in January 2024 decreased by exactly 50% compared to January 2023. And this trend is continuing," Mr. Tekçe said. In addition to investors who contribute money to the country's economy, some migrants do not buy apartments but rent them and stay in Turkey longer than planned.

Some investors buy property for economic benefits, others for personal leisure and some see Turkey simply as a haven or an escape from Islamophobia. They obtain residence permits simply by renting property, thus distorting the overall picture.

The biggest problems were faced by those who bought property in Turkey but did not renew their previously obtained residence permits. These individuals have invested significant sums of money but are now forced to leave disappointed. Understandably, they are reluctant to make repeat purchases and recommend it to friends and acquaintances - why buy property in a country that treats you unfavourably?

Bayram Tekçe cited a telling case involving an elderly Norwegian couple who had lived comfortably in Turkey for 17 years but had to leave because their residence permit was not renewed. They ended up buying a house in Sharm El Sheikh (Egypt). GİGDER defends the interests of foreign investors because such buyers, calm, law-abiding and willing to spend their savings in Turkey, are crucial.

"None of them want to deal with the legal complexities, so they leave. Therefore, a clear distinction must be made between illegal immigrants renting the cheapest apartments and genuine investors," Tekçe emphasises.

Property sales to foreigners in Turkey: Results of 2023 and forecasts for 2024

Golden and silver visas - A way out?

Such programmes exist in Europe but have not yet been introduced in Turkey. Market experts suggest introducing their equivalents. It should be noted that these are only proposals - versions currently under discussion and may not be approved or may take a long time to come into effect.

As per Tekçe, not all investors are willing to invest USD 400,000 to obtain citizenship through investment. "The demand for citizenship, both here and in other countries that sell property to foreigners, averages around 10 per cent," he says.

As per the expert, there are two types of buyers in Turkey. The first are Europeans on holiday who come to Turkey because of the good climate. They stay for 1-2 months and then leave. For example, after the news of the gas crisis in the EU last year, many hoteliers offered German and British citizens the opportunity to spend the winter in Turkey.

Such investors do not necessarily require permanent residency; comfortable conditions during their visit are sufficient. However, they do need certain rights, such as being registered at their place of residence, having a tax number, a bank account and cards. For them, it would be reasonable to set the investment threshold for housing at a low level of EUR 100,000 – EUR 150,000. The Silver Visa would be perfect for them.

The Golden Visa is an option for those who wish to start a new life in Turkey. It can serve as an alternative to citizenship through investment, offering preferential treatment when applying for permanent residence. The plan is to maintain a high minimum threshold, with the approximate amount for a Golden Visa unofficially estimated at EUR 500,000.

"Let's determine the type of investors we need and the conditions required to revitalise the market. Selling 40,000 apartments to buyers we are genuinely interested in is preferable to selling 60,000 to just anyone," the expert stressed.

Average transaction size and citizenship

The average transaction amount with a foreign investor today stands at USD 245,000, marking a decrease of USD 45,000 since the last survey. Turkey is heavily dependent on this money. Therefore, instead of implementing the long-rumoured increase of the minimum amount for obtaining a Turkish passport to USD 1 million, it is better to take a more investor-friendly approach.

Experienced players argue that it makes sense to provide incentives for those making more modest investments, such as USD 200,000 or less. However, immigration via renting accommodation that leads to illegal residence should be discouraged. "Please, let's make a distinction between immigrants who are in Turkey illegally and genuine investors," reiterated the head of GİGDER.

February is disheartening but inspiring

Property sales to foreigners in February were the lowest in 33 months. Excluding the pandemic period, which affected the whole world, sales to foreigners reached a 59-month low. In other words, nearly five years. Only 1846 residential units were sold.

Even Russians, who have consistently led in terms of transaction volume since the spring of 2022, are not improving the situation. In February 2024, Russian citizens bought 395 housing units in Turkey, 66.6% less than in the same month last year. This is the lowest level in  31 months. However, in December 2022 they set a record by buying 2403 apartments in one month. The unexpected increase in the minimum amount required to obtain a residence permit based on property ownership (TAPU) from USD 50,000 - USD 75,000 to USD 200,000 contributed significantly to this decline. Another blow was the closure of several areas popular with foreigners, particularly in the resorts of Antalya and Alanya, for obtaining residence permits.

Property sales to foreigners in Turkey: Results of 2023 and forecasts for 2024

Most profitable cities for foreigners

Given the current situation, analysts have identified the most profitable destinations for foreign investors to purchase residential property in Turkey.

  1. Istanbul: As the financial and economic centre, Istanbul offers an abundance of tourist options and government-backed initiatives like the Istanbul Canal, leading to rapid increases in property prices in both the European and Asian parts of the city. The ever-expanding market opportunities provide income from property rental. Istanbul is lively all year round, ensuring demand for both long-term and seasonal tourist rentals.
  2. Ankara: Considered a safe investment in the capital, this city is favoured by investors for its stable population growth and ongoing infrastructure projects. Districts like Cankaya, Etimesgut and Kecioren present attractive investment opportunities in both residential and commercial properties.
  3. Izmir: Emerging as the rising star of the Aegean coast, the city's rapid development in recent years has captured the attention of investors. Significant growth, especially in the technology and tourism sectors, has revitalised the local property market. Districts like Alsancak, Karsiyaka and Bornova are notable for their high rental income potential and promising price growth.
  4. Antalya: Investment opportunities in a tourist paradise. As Turkey's resort capital with a year-round tourist season, it ensures stable rental income.
Subscribe to newsletter