As reported by analysts, the number of residences sold across Turkey dropped by 38% in July 2022 compared to the previous month, and by 13% compared to the same period in 2021. However, “quantity” is not a reliable indicator of sales “quality”. First, due to the reorientation of foreign investors to the premium segment (the increase in the financial threshold for fast-track registration of citizenship from $ 250,000 to $ 400,000 per transaction “contributed to” this), the average price for real estate purchased by foreigners has increased.
Second, according to the specialized portal Endeksa, the annual growth in house prices in Turkey amounted to as much as 195% by the end of July. The average purchase price per square meter of residential real estate has broken the 10,000 Turkish liras (TL) barrier, reaching 10,683 TL.
The average house price (indicators of all settlements in the country were taken into account) is close to one and a half million: 1,410,156 TL.
The return on investment is still at the same level: about 19 years on average in the country.
The provinces of Mersin, Istanbul, and Antalya turned out to be the areas with the highest annual increase in value. Mersin had the highest dynamics.
This information was obtained from the price analysis in 30 provinces of the Republic of Turkey with the largest volume of housing transactions in July.
So, what have we got?
Content:
- 240% – who has more?
- What about other cities?
- A third of sales to foreigners took place in Antalya
- “Foreign” sales: leading provinces and leading nations
- Expert opinions
240% – who has more?
- In Mersin, housing prices rose by 249% over the past year. Here. the average selling price of a square meter is very close to 10,000 TL (up to 9,927 TL in July). The average cost of a residential unit is 1,469,196 TL.
- In Istanbul, annual value growth is 5% less, it is just 244%. But for obvious reasons, in the largest Turkish metropolis, the average cost per square meter is almost twice as high as in Mersin, 18,653 TL. The average sale price of a residence is 2,238,360 TL.
- This year, Antalya's price rise is almost “head to head” with Istanbul at 240%. The average selling price per square meter is almost in the middle between Istanbul and Mersin, 15,845 TL. The average cost of a home is not far behind Istanbul. It has come close to two million liras, or 1,980,625 TL to be exact.
What about other cities?
In July 2022, Istanbul recorded the greatest number of transactions: 14,350 residential sales or a share of 15% of the total. Ankara, with 7,417 transactions and an 8% share of the total market, and Izmir, with 4,868 housing transactions and a 5% share, are the next two largest Turkish metropolises in terms of sales, according to Turk Estate's most recent release of detailed monthly statistics for July.
We have already discussed data regarding Istanbul, Antalya and Mersin. Housing prices in Ankara have grown by 188% over the past year. The average selling price per square meter has also reached a fairly large figure, 7,879 TL. The average cost of a unit of residential real estate exceeded one million, 1,040,028 TL.
In Izmir, the annual value growth is a little lower, 179%. According to data reported in July, the average selling price per square meter is 13,379 TL. The average cost of a residence in the province is 1,725,891 TL (it should be noted that prices are much higher in particularly prestigious and sought-after areas such as Karsiyaki).
A third of sales to foreigners took place in Antalya
The “resort capital of Turkey” shows excellent results. A third of all transactions with investors who have citizenship in other countries took place in Antalya, even though house sales to foreigners declined by 12% in July compared to the same month last year. Out of 3,939 monthly sales nationwide, 1,421 units here became the properties of foreign investors.
Evaluating the statistics, Gorkem Ogut, CEO and founding partner of Endeksa, spoke about two record months at once: “For the first time since October 2016, Antalya came in on top in home sales to overseas buyers. At the same time, Mersin turned out to be the province with the highest house price growth ever recorded.
I think that the expectation of a price decline is one of the reasons for the decrease in transaction volume. Because the rise in property prices is only accelerating. According to Endeksa, monthly housing price growth peaked at 14% in April, then reached 13% in May and 11% in June. In July, the monthly increase was 9%. I believe that the market will “rebalance” and find a new “peace” in terms of the price and the transaction quantity ratio during the last quarter of the year.”
The same topic – the fact that Antalya “outperformed” Istanbul in terms of the volume of transactions with foreigners for the first time in 68 months – immediately began to be actively exaggerated on Emlakkulisi, another profile information portal of Turkey. And with his filing, it continued in other specialized media about real estate and construction.
As a result, a slight decrease in transactions with foreign buyers (3,939 transactions, or 12.4% less than in July 2021) recorded in July 2022 should not be regarded as a significant factor. First, this year, July was a long holiday in Turkey. This is the period when the number of housing transactions noticeably falls. And second, if we take into account the indicators of the first seven months of the year, from January to July, then a serious increase in housing investments from overseas buyers was observed.
“Foreign” sales: leading provinces and leading nations
Between January and July, sales of residences to on-residents grew by 57.4% year on year, reaching a total of 39,322 transactions.
Most of them occurred in Istanbul, with 16,049 sales. Antalya took second place in a seven-month period with 11,257 sales.
Mersin, Ankara and Bursa, Turkey's fourth metropolis, also made it into the “top five” in terms of sales.
But again, following the results of those seven months, citizens of the Russian Federation made the largest investments in housing in the Republic of Turkey. The number of residences purchased by Russian citizens increased by 223.4% between January and July compared to the same period in 2021. This is a total of almost seven thousand transactions – 6,877.
The former “winners”, the citizens of Iran, were in second place. They bought 5,315 units. The “bronze” holders were buyers from Iraq. Iraqis acquired 4,405 residences.
The fourth was Kazakhstan for the period of seven months with 1,607 transactions.
Germany was only 30 transactions behind, at 1,577. Ukrainians also acquired a lot of real estate through 1,352 transactions.
Citizens of Afghanistan, Yemen, Kuwait and China also made it into the top 10 key investor countries.
Even considering only data for July, Antalya has outdone Istanbul, the leader for almost every month since 2013. This was the year when detailed information on transactions with foreigners began to be counted and published.
It was found that the total number of transactions with foreigners between January and July 2022 went up by 129% compared to the same period last year, and reached 11,257 units.
Expert opinions
Speaking about the sales volume of residences to overseas investors, Nazmi Durbakayim, Chairman of the Board of the Istanbul Association of Builders (İNDER), drew attention to the fact that foreigners were still interested in Turkey, and especially in Antalya. And that's an understatement: “Investments in real estate purchases from this client group are noticeably rising, especially on the part of Russian nationals. There are also many people from Ukraine expressing interest. In addition, citizens of the Scandinavian countries also buy a lot of properties in Antalya since Antalya fully “corresponds” to the European way of life, even though its climate is much warmer. According to the expert, the combination of these two key factors puts the city in first place in housing sales to foreigners.
Dr. Selman Ozgun, Chairman of the Board of Helmann Construction, stressed that home sales to foreigners grew by almost 60% in just seven months and approached 40,000 units. And he noted the special "influence" of the citizens of the Russian Federation on this result. Assuming that the dynamics observed from January to July will continue in the province of Antalya and throughout the country: “... we expect that in 2022, 65,000 to 70,000 residences will be sold to foreigners.”
Gokhan Tash, the head of the MasterTurk Group, said that the increase in the minimum financial limit to obtain fast-track citizenship through real estate investments to $400 000 actually scared off very few people: “High demand from both Russians and Iranians remains at the same level. Well, traditionally, a higher number of transactions with foreigners over the summer. Therefore, I anticipate that the volume of sales to foreign investors will rise in August and break the record by year's end.”
