Recent events have caused many economic difficulties for a number of countries. This has caused many people to buy homes in Turkey. Previously, foreigners weren’t in a hurry to do this. Instead, they’d visit the country, rent an apartment for a year or 2, apply for a tourist residence permit and look around. In general, they weren’t in a hurry to invest in property. Today, because of the wave of people who want to sit out turbulent times in Turkey, rental prices that were already growing by leaps and bounds have soared. So it’s become easier and more profitable to buy an apartment and not worry about the owner doubling prices in a couple of months (even though this is illegal) or forcing you to move out.
Content:
- Foreigners refuse housing in Europe in favor of Turkey
- Political events have the become "dope" for apartment sales in Antalya
- Buying a home in Turkey has become more profitable than renting
- Demand for expensive high-status housing is growing among foreigners
- Imminent demand peak awaits Istanbul and Izmir
- Current events will shake up the Turkish property sector
- Turkey is plan «B» for Russians
- Conclusion
Also, it’s worth keeping in mind what’s needed for a Turkish residence permit, which is necessary to travel within the country for more than the visa-free period. Tourist residence permits “for rent” used to be issued quite easily but now the process has become complicated. Also, many provinces are now refusing to accept documents because the law prevents more than 25% of foreigners from permanently living in the country. And in some, places this limit has already been exceeded not just because of Russian-Ukrainian events but also the influx of refugees from Syria, etc.
A residence permit for TAPU (certificate of property right for housing) is still issued without much hassle. So buying an apartment in Turkey has really become a good guarantee of stability in our changing world.
This is in short. Now, there are some important details.
Foreigners refuse housing in Europe in favor of Turkey
Although the number of foreigners who want to buy property abroad has increased because of imposed sanctions, some foreign citizens will have to consider new markets too. Some experts agree that Turkey and some other states will come become popular as Russians don’t have the right to get a “golden passport” or a residence permit for property in EU countries.
Before Russians showed great interest in England, Cyprus, Spain, Bulgaria, Greece and Montenegro and later, property markets in Portugal and Dubai were added to this list. Now, the demand for Cyprus, Turkey and Dubai has remained but other countries have disappeared for Russians.
Political events have the become "dope" for apartment sales in Antalya
Since the beginning of the armed conflict between Russia and Ukraine, the demand for houses in Antalya has increased for citizens in both countries and noticeably, industry participants say that some Russians have already bought property "wholesale", that’s up to 20-30 apartments! So, the volume of sales has increased a lot, especially since the start of March. This affected different areas of Turkey but mostly the "tourist paradise" of Antalya.
From the end of February to the beginning of March, rental and for-sale housing prices in its most popular districts have been breaking records. The President of the Antalya Chamber of Commerce and Industry (ATSO) Davut Çetin, commenting on the data published by the Turkish Institute of Statistics for February 2022, said that out of 4727 housing units throughout Antalya, 1099, i.e. almost every fourth one, were bought by foreign investors. Apartments and houses sales in Antalya increased by 27.68% in February compared to February 2021. If in February the share of housing sales to residents of other countries was on average 5.65% in Turkey, then in Antalya this figure is 23.24%, he said.
Ugur Fer, a property broker and senior manager at TamNoktaNeo, mentioned that about 30,000 Russians and more than 9,000 Ukrainians now live in Antalya and their number is growing rapidly. The specialist says: “We have sold about 50 apartments only over the last 6-7 days. As for the region, the citizens of both Russia and Ukraine prefer Lara and Kunda to purchase and rent in.”
Uğur Fer noted that 1+1 (1-bedroom) apartments in the range of 1–1,200,000 Turkish liras (TL) are in demand, 2+1 at about 1,700,000 TL and 3+1 from 2 up to 2,200,000 TL.
Buying a home in Turkey has become more profitable than renting
Rent, as we’ve already said, changes from month to month and owners raise it without concern about the officially permitted annual percentage, often greatly exceeding it. That is, when you rent an apartment, in a month or 2, you may need to pay more for it than you’d expected. Or you’d have to move out and hastily look for a new option. And you can’t even guarantee that the same thing won’t happen again.
How much does it cost to rent an apartment in Turkey’s resort areas now?
The following information was published in a reliable and accurate Telegram channel called “All about Turkey. Olga Varava's channel":
“Apartment 1 + 1 in an ordinary house. Purchase price €60,000, rent €400/month, €4800/year.
Apartment 1 + 1 in a new complex with developed infrastructure. Purchase price - €80,000, rent - €500/month, €6000/year.
Apartment 2 + 1 in an ordinary house. Purchase price - €100,000, rent - €600/month, €7200/year.
Apartment 2 + 1 in a new complex with developed infrastructure (de luxe option). Purchase price - €150,000, rent - €800/month, €9600/year.
The profitability is 6–8% per annum and in my opinion, these are excellent indicators for both Turkey and the world. The properties that now earn above 10% were bought a few years ago at prices 30% lower. But people didn’t know or count on such a significant increase in profitability when they bought them back then.
Of course, these figures are just a guide and there are always pros and cons.
People who bought property a few years ago now receive 10-15% per year, especially if for some reason, they managed to rent out their homes at prices above the average.
Players in the Turkish property market believe that now, rental rates are noticeably "raised" and a "rollback" is possible with a return of profitability of 5-6% a year. But let's be mindful of inflation, a steady increase in property prices, as well as the stable demand from foreigners. As an informant for residents of Mahmutlar (one of the most popular districts in Alanya) told Turk.Estate, “last month, there were so many foreigners that Turkish faces on the streets in the daytime are almost a rarity.”
The people poured into the resort regions "to sit out troublesome times" and it’s understandable why they would do that. So people who buy housing now will be able to earn more from renting out in 2-3 years than people who hesitate about buying an apartment later.
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Demand for expensive high-status housing is growing among foreigners
The General Director of Bahaş Holding Abdyussamet Bahadir, commenting on the consequences of the Russian-Ukrainian conflict, says that foreigners still prefer to invest when they buy a home rather than buying for personal residence. And now, with the current political events, this trend has stayed the same. Buyers tend to invest in premium and branded residential complexes, mainly in Istanbul and Antalya. He said that, according to his information, many wealthy foreigners are waiting for when they can still invest in property in Turkey – that is, as soon as the money transfer ban is lifted.
It's worth keeping in mind that at the time of writing, you can transfer up to $ 5,000 per month to Turkey to relatives with supporting documents.
What about buyers with average and moderate incomes – are they also migrating to Turkey to buy buying property? They are. The Russian Federation ranks 3rd after Iran and Iraq among the countries whose citizens Turkey sells the most residential real property. By the way, Ukraine is one of the countries where the demand for Turkish property is also growing rapidly. Abdyusammet Bahadir said that according to information received by his company from partner agencies, as soon as the confrontation between Russia and Ukraine is over, both Russians and Ukrainians will take measures to buy a large amount of property in Turkey. This is because it’s a kind of guarantee for a safe life where they don’t have to worry about their family, lives, they can open a business, save money, get a residence permit and, in the future, citizenship without any problems.
“The significant preliminary demand is plain to see. The migration of buyers with both high and medium incomes can occur after the end of the armed conflict; all of them are waiting for a solution to the problem with the money transfer. As soon as this issue is settled, expect a twofold increase in buyers from these categories of investors,” the expert said.
Imminent demand peak awaits Istanbul and Izmir
The president of the Association of Russian and Turkish Entrepreneurs (RTİB) Naki Karaaslan is sure that western sanctions will directly affect the "route" of Russian investments in residential property. With outgoing funds from European property markets, foreigners will look for homes in large cities with a developed social infrastructure and if possible, by the sea. So, experts say that Istanbul and Izmir are likely to be of interest.
Naki Karaaslan also stressed that in any case, even before getting any economic benefits, the priority is restoring peace. Only in recent years, tens of thousands of Turkish-Russian marriages have happened. Now, it’s extremely difficult to see close relatives in both countries and especially support them financially. It’s a difficult and unhappy situation for many people.
As real estate players suggest, on the one hand, this can "spur" the process of buying apartments and houses in Turkey – those who looked for a home for themselves or loved ones in previous years and didn’t buy, will now the feel the urgency to purchase. On the other hand, it’s impossible to ignore the difficulties of transferring funds because now all transactions have to happen through banks.
But also, in addition to Antalya, there’s an obvious increase in potential investment interest in Turkish cities with coastal access. These are Istanbul and Izmir.
According to data by TÜİK, in 2021, foreigners bought 58,476 residences across Turkey, which is 43.5% more than in 2020. Russians became owners of 5379 housing units, 885 of them in December 2021 alone.
Current events will shake up the Turkish property sector
Much of the above are obvious benefits for the Turkish property market. But because of the conflict between Russia and Ukraine, there are also difficulties that potential buyers and Turkish developers as direct sellers of housing (companies or owners selling “secondary housing”) have faced. These come from the consequences of anti-Russian sanctions. The ban of the Russian Federation on foreign transfers limits. The President of the Turkish Property Professionals Association (Emlak Profesyonelleri Derneği - The Turkish Property Professionals, or TTPP), Yakup Uslu, suggested that this concerns Alanya where many Russians buy housing.
Here is what he told Yeni Alanya reporters: “The Russian ruble has lost a lot of value and the property market will bear the brunt. The purchasing power of Russians is decreasing rapidly. Also, our clients are citizens not only of Russia but also Ukraine and who also bought serious volumes. That’s why this war will greatly affect both construction and property.”
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Turkey is plan «B» for Russians
The president of the Association for the Promotion of Real Property Abroad (GİGDER), Omer Faruk Akbal, said that Russians who invested an average of 50-100,000 euro in buying housing in Turkey, have upped the ante now. As part of discussions at recent business meetings, it was found that the average amount to buy a home in Turkey has reached 200,000 euro.
Omer Faruk Akbal describes the investment of Russian citizens in Turkish property as "Plan «B» after sanctions were tightened."
According to official data by the Central Bank of the Republic of Turkey, Russia's total investment in Turkish projects has already exceeded $7,700,000,000 Also, this isn’t just about buying a home but also points to joining in important logistics projects and the largest Russian investment at the moment - the Akkuyu nuclear power plant in Mersin.
It’s worth noting that Turkish companies coming into Russia also bring billions of dollars. But the construction market suffered more than others: the cost of 150 projects of various kinds by members of the Turkish Contractors Association in Russia reached $22,000,000,000 and projects in Ukraine reached $3,000,000,000. If the armed conflict doesn’t end soon, Turkish contractors will face huge risks to $25,000,000,000-projects.
There’s no need to explain how tourism has suffered. Many people who first come to Turkey as a tourist are fascinated by the sea, sun and nature and that’s why they decide to stay longer in the country or buy a home.
So the armed conflict between the Russian Federation and Ukraine directly affects the Republic of Turkey. The country is interested in peace being restored as soon as possible so everyone who wants to buy an apartment or house in Turkey can realize this dream.
Conclusion:
At the time of this article's publication, the Hürriyet newspaper published interesting information. Starting on February 24, 2022, 14,000 citizens of the Russian Federation arrived in Turkey. The vast majority of them claim that they plan to stay here permanently.
Accordingly, a considerable percentage of them are considering buying their own housing - now or in the not-too-distant future. And many have already begun to look into it.