As per data released by the Turkish Statistical Institute, housing sales to foreigners in 2023 fell 48.1% year-on-year to 30,005 units. This is the lowest figure in 6 years, since 2017. The share of foreign buyers in total transactions, which was 4.5% in 2022 (sometimes averaging as high as 5%), fell to 2.9% in 2023.
The 'net' inflow of foreign investment, which had set a record of USD 6 billion the previous year (2022), decreased by 43.3% to USD 3.56 billion in 2023.
So far, analysts have only summarised the results for the first quarter of this year: housing sales to foreigners from January to March 2024 fell by 48.0% year-on-year, totalling 5,685 units. Here's a quick overview of foreign investor transactions in January, February and March.
'Net' investment by foreigners in Turkish property in the first quarter also fell by 41.9%. Two significant factors contributed to this decline: firstly, the minimum amount required to obtain 'citizenship by investment' was raised to USD 400,000 on 13 June 2022. Secondly, the cost of housing for foreigners seeking residence permits increased from USD 75,000 to USD 200,000 on 16 October 2023. It was necessary to obtain Long-term citizenship by naturalisation, which requires nearly continuous residence in the country for five years, also played a role.
Although the officials did not refuse to issue a residence permit to new owners who purchased a property for less than USD 200,000, this type of residence permit did not grant the right to obtain citizenship. This significantly dampened the enthusiasm of foreign buyers, as many either anticipated buying or already owned properties in off-plan projects in Turkey.
The negative factors that indirectly contributed to the decrease in the number of transactions and the total inflow of investment in foreign currency through housing sales included the rise in property prices in dollars (as property in foreign currency is not cheap), concerns about earthquakes risks and at the beginning of the year, the so-called 'pent-up demand' in the context of upcoming presidential elections.
Content:
- Should we wait for an 'investment thaw'?
- 2023
- Here's the dynamic:
- Dynamics over several years
- By categories of residence permits
- By province
- What's up with the 'investment thaw'?
Should we wait for an 'investment thaw'?
Despite the current situation, Turkish experts expect a 'thaw in foreign investments'. The article will conclude with the developments that make such optimistic projections feasible. In the meantime, let's examine the recent dynamics of residence permits issued to foreigners and draw some conclusions.
2023
The foreign population residing in Turkey decreased by 253,293 compared to the previous year, 2022, reaching a total of 1,570,543. Of these foreign nationals, 48.6% are male and 51.4% are female. The leading nationalities are from Iraq, Afghanistan and Germany. Outside the top three, but still within the top ten, are nationals from Turkmenistan, Iran, Syria, Azerbaijan, Uzbekistan and Kazakhstan.
The main reasons are also quite clear: the restrictions imposed on issuing tourist residence permits across the country have led to many individuals who had previously rented flats in Turkey, some for years, not just recently, being denied this visa. As a result, they were forced to return home or move to other, more 'long-term tourist-friendly' countries.
These statistics do not include foreigners with visas or residence permits valid for less than 90 days who are, in a sense, equal to tourists, nor Syrians staying in Turkey under temporary protection status who are essentially, refugees). However, the data does account for those with work visas or valid residence permits through lease, ownership, marriage, etc. Additionally, it includes holders of identity documents that replace residence permits e.g., those with international protection and holders of 'blue cards' who have renounced their citizenship of the Republic of Turkey.
Here's the dynamic:
| 2022 | |||
|---|---|---|---|
| Country | Total | Men | Women |
| Total number of foreigners | 1,823,836 | 902,124 | 921,712 |
| Iraq | 275,305 | 140,973 | 134,332 |
| Afghanistan | 186,160 | 109,123 | 77,037 |
| Germany | 110,453 | 54,532 | 55,921 |
| Turkmenistan | 116,447 | 59,037 | 57,410 |
| Iran | 117,026 | 56,827 | 60,199 |
| Syria | 99,360 | 51,385 | 47,975 |
| Azerbaijan | 68,884 | 31,558 | 37,326 |
| Uzbekistan | 61,754 | 18,691 | 43,063 |
| Kazakhstan | 45,530 | 18,845 | 26,685 |
| Ukraine | 50,357 | 13,977 | 36,380 |
| Egypt | 33,040 | 18,618 | 14,422 |
| Kyrgyzstan | 24,485 | 7,122 | 17,363 |
| Austria | 21,311 | 11,525 | 9,786 |
| Palestine | 26,278 | 15,523 | 10,755 |
| 2023 | |||
| Total number of foreigners | 1,570,543 | 762,672 | 807,871 |
| Iraq | 217,476 | 109,851 | 107,625 |
| Afghanistan | 164,131 | 95,538 | 68,593 |
| Germany | 114,293 | 56,712 | 57,581 |
| Turkmenistan | 110,349 | 52,514 | 57,835 |
| Iran | 101,164 | 47,384 | 53,780 |
| Syria | 79,952 | 40,257 | 39,695 |
| Azerbaijan | 70,971 | 33,287 | 37,684 |
| Uzbekistan | 54,594 | 17,010 | 37,584 |
| Kazakhstan | 44,133 | 18,437 | 25,696 |
| Ukraine | 40,483 | 11,463 | 29,020 |
| Egypt | 28,451 | 15,848 | 12,603 |
| Kyrgyzstan | 22,477 | 6,781 | 15,696 |
| Austria | 22,102 | 11,934 | 10,168 |
| Palestine | 21,612 | 12,358 | 9,254 |
Dynamics over several years
Here is the data from previous years:
- 2005 — 178,964 people
- 2015 — 422,895 people
- 2018 — 856,470 people
- 2019 (first time surpassing the 1 million bar) — 1,101,030 people
- 2020 — 886,653 people (partly affected by the pandemic)
- 2021 — (sharp influx due to political events in Ukraine) — 1,314,181 people
- 2022 — 1,354,094 people
To summarise, in 18 years, the number of foreigners residing in the Republic of Turkey has increased more than fivefold, from 179,000 to 1,107,000.
In 2023, 247,062 foreigners had to leave. Of these, 10,254 were Ukrainian citizens who returned to their home country, leaving 36,982 Ukrainians instead of 47,236.
By categories of residence permits
In 2023, the distribution of foreigners in Turkey by residence permit type was as follows:
- Short-term resident permit (tourist): 638,764
- Student residence permit: 161,426
- Family residence permit: 117,579
- Other types of residence permits (including those for guarantee, medical treatment, etc.): 189,263
Interestingly, Iraqi nationals ranked first among foreigners living in Turkey with short-term residence permits. Iranians held the highest number of student residence permits, while Azerbaijanis had the highest number of citizens who married in Turkey and obtained a family residence permit.
By province
As of 31 December 2023, of the more than 1.1 million foreigners living in Turkey with official permits, the province of Istanbul held first place. Almost precisely half, 556,578 citizens of other countries, resided there on residence permits, work visas, etc., either temporarily or permanently. The number of residents in this prominent Turkish metropolis decreased from 705,556 people on 19 January 2023 to 556,578, on 31 December, a reduction of almost 149,000 people.
The province of Antalya ranks second with 117,052 people. As noted, the number of people in this category decreased by 40,523 from 19 January to 31 December 2023, dropping from 157,575 to 117,000.
A large number of residents with residence permits were also recorded in the following provinces: Ankara (70,098), Bursa (51,537), Mersin (43,944), Izmir (25,576) and Mugla (20,453).
The region with the fewest foreigners was Tunceli province, with just 52. This was followed by Muş (83), Bitlis (204), Ardahan (278) and Bayburt (280).
What's up with the 'investment thaw'?
Economists have raised concerns about the decline in direct foreign investment inflows into the country. In response, some measures have been announced in recent months and there are indications of unofficial 'concessions' being made.
Regarding official information, foreigners have been assured that the process of opening accounts in Turkey will be simplified, as Turk.Estate has detailed here. Additionally, there are increasing talks from local realtors that the previous widespread refusals for primary tourist residence permits have now been replaced by a certain percentage of approvals. This is unsurprising: strict restrictions were introduced to comply with the law, which stipulated that the number of foreign residents in any province should not exceed 25% of the total population. Many foreign citizens, who did not receive their renewals of their previous short-term residence permits or 'primary' have dispersed, creating an available 'quota'. Turkey is very interested in selling residential property to citizens of other countries. Since many realtors have discussed this, there is likely truth to the situation.
In addition, some banks are finding loopholes for transferring funds to individuals in Turkey, such as options in mobile applications with minimal commission, etc.
Thus, there is a green light for those wishing to buy property in Turkey and move.