TÜIK recently published housing sales statistics for August 2021. The number of residential real estate transactions amounted to 141,400 units.
Content:
- Record number of transactions with foreigners
- Foreigners bought about 10% of housing in Istanbul and 18% in Antalya
- 34,000 transactions after lowering the threshold of instant citizenship
- Expert opinions
Record number of transactions with foreigners
According to published figures, residents of other states bought 5866 housing units in August. This figure is the highest in several years after October 2018 when 6,266 transactions were made in Turkey.
Residential real estate sales to foreign investors in August increased by 50.7% compared to the same month in 2020.
During this month, Iranian citizens purchased the most housing in Turkey; 911 houses or apartments. Iraq (900 transactions), Russia (451 transactions), Afghanistan (313 transactions), and Kuwait (264 transactions) also entered the top 5 last month.
Also among the leading countries are Germany (262), Kazakhstan (176), the USA (173), and Azerbaijan (138).
Citizens of Great Britain, China, Ukraine, Yemen, Sweden, Egypt, and other countries are also interested in housing in Turkey and buy apartments or houses in the republic every month.
From January to August, housing sales to investors from abroad increased by 47.6% compared to the same period in 2020 and 30,849 residential real estate units were sold in Turkey.
Considering the number of sales for 8 months of the year, the current 30,849 transactions are the best indicator for the entire period.
In 2020, this figure was 20,896, in 2019 - 27,479, and in 2018 - 18,540.
Foreigners bought about 10% of housing in Istanbul and 18% in Antalya
Istanbul ranked first in August with 2,729 signed contracts (out of 24,286 deals in total). Foreign investors bought 11.2% of them.
The resort capital of Turkey Antalya ranked second with 976 deals. Ankara is in third place (400 transactions), Mersin is in fourth (242 transactions), Yalova is in fifth (233 transactions).
From January to August, 151,221 residential real estate units were sold in Istanbul, of which 14,788 (9.8%) were sold to foreigners.
As for Antalya, the resort capital of Turkey, the share of foreigners among homebuyers from January to August 2021 increased by 3.8% compared to the same period last year.
Their share among buyers from January to August changed to 16.9% (5897 out of 34,827 transactions).
Turkey will have broken the annual record of sales of residential real estate to foreigners by January 2022. The country wants to increase this figure from 3.8% to the figures of some European countries popular with those looking for housing abroad. There, the share of non-resident investors reaches 10%.
For these purposes, qualification requirements for realtors, who are leaders in the international housing market, are being tightened in the country. Real estate agents will need to know other foreign languages besides English.
Home sales to foreigners have increased in Turkey after the government decided to grant "instant citizenship" to those who buy residential real estate for $250,000 or more. Previously, the minimum entry threshold to obtain citizenship in a matter of days was twice as much at $500,000. And such a large purchase has also become more convenient because buyers do not need to spend $250,000 on 1 house. They can buy, for example, several apartments for this amount.
Ahmet Büyükduman, an expert at an Istanbul real estate appraisal company, said that home sales to foreigners which slowed down last year due to the epidemic, "gained momentum" this year due to the depreciation of the Turkish lira (TL), the successful opening of the country after quarantine, and a "normalization project" launched by the authorities this summer.
The expert clarified that the share of foreigners buying housing in Turkey is about 3.5% if we count in units. But if we evaluate it from the point of view of trade turnover, this figure is about 7-8%. And he said that the share of foreigners in the turnover of primary housing in Istanbul alone was approaching 15% which increased housing prices in this market.
Ahmet Büyükduman also said that the amount of money that foreign investors spent on purchasing housing in Turkey was twice the amount of locals buying housing. Demand from abroad has increased due to the granting of citizenship in exchange for buying real estate amounting to $250,000.
Although the housing sales market has slowed down compared to the previous year, it has become active since June. The specialist stressed that on August, 6-7,000 residential real estate units were sold every day across the country. This figure is good.
34,000 transactions after lowering the threshold of instant citizenship
Foreigners have bought 134,100 houses or apartments in Turkey after the authorities adopted a decree on the immediate granting of citizenship to those who buy real estate for $250,000 or more. Furthermore, Russians entered the top 4 countries by transactions, losing to Iraq and Iran but ahead of Afghanistan.
Expert opinions
Chairman of the Board of Özyurtlar Holding Tamer Özyurt: "Don't wait for a decline in housing prices, this won't happen in the market."
"Sales figures to foreigners published by TÜİK at the end of August did not surprise us and once again inspired hope in the market players. The Turkish real estate sector has been considered a "haven of peace" for foreign investors for many years. However, it is worth remembering that the rise in construction prices causes problems in the domestic market. Unsurprisingly, prices will keep rising after that. We need new funding models to address the consequences of these problems. The same investors who decide to postpone the purchase and not buy housing now may face a significant increase in prices in 2022 and beyond. I want to warn against this those who are determined to buy a house or an apartment but vainly hope for a reduction in prices."
Chairman of the Board of Akkuş Group Abdülkadir Aksu: "Foreigners buy housing to live in Turkey."
"Foreign investors trust the Turkish market. And most buy a house or an apartment. Statistics have shown that only 1 in 4 foreigners who purchase residential real estate in our country focuses on obtaining citizenship. What does this mean? Foreigners invest in properties in Turkey and citizenship is not the only factor that determines such an investment decision.
The average term of homeownership by foreigners in the country is about 5.7 years."
General Director of Bahaş Holding Abdüssamet Bahadır: "If financial conditions become more flexible, the number of sales will also grow in the market."
"With the increase in the number of resident foreigners, the growth of housing sales to citizens of other states continues in the market despite the pandemic. If residents of other countries are going to Turkey and investing in real estate more and more, it means that they see its potential.
However, there is the question about finances: firstly, it is not always easy to bring a great amount of money to Turkey from abroad. Secondly, many people would get mortgages if interest rates were "softer". At the moment, the level of credit usage by foreign investors is low. If banks and credit institutions become more flexible in lending to foreigners, the contribution of the foreign sector to the Turkish economy will increase significantly.
On the other hand, many countries are willing to sell housing for cryptocurrency. It is also becoming popular in Turkey in a variety of areas. If there is a legal basis, the requests of foreign investors who cannot obtain bank loans in our sector and/or who have difficulties transferring money to Turkish accounts will be satisfied with payments in cryptocurrency. This situation will boost both the construction industry and the country's economy."
İhsan Çulhalık, Chairman of the Board of İnsay Yapı: "Expats' interest in Turkish housing pleases us."
"The real estate sector is the safest investment tool in the world. It provides a large inflow of foreign currency into the country.
Although the rise in housing prices due to costs on the domestic market and high loan rates has interrupted domestic investments, expats' interest in Turkish housing pleases us.
The further away, the more funds residents of other countries are now investing in housing. And now 10% of investors who come to our company to buy real estate are citizens of other countries."
GİGDER President Ömer Faruk Akbal: "We are about to reach 50,000 transactions with foreigners per year."
President of the Real Estate International Promotion Association (GIGDER) Ömer Faruk Akbal stressed the dynamics of the United States in the ranking of countries in which citizens buy a lot of housing in Turkey. The USA - a country that accepts many immigrants - has begun to "immigrate". Americans bought more homes in Turkey and ranked eighth last month by the volume of residential real estate purchased (from 58 units in August 2020, this figure increased to 173 in August 2020; the increase was 198%).
The ever-growing volume of housing sales to foreigners will reach 50,000 transactions by the end of 2021: "Istanbul, Antalya, Ankara, and Mersin top the list but there is also an increase in the number of transactions in Yalova, Bursa, and Izmir. Today, many regions of Turkey are attracting more and more investors. It is great both for our industry and the country as a whole."
Chairman of the Board of the Istanbul Association of Builders (İNDER) Nazmi Durbakayım: "Savings in foreign currency and gold are spent on housing in Turkey."
Nazmi Durbakayım said that despite the sharp increase in construction materials costs, sales figures in August were encouraging. "Despite the increase in interest rates as well as housing prices, there is demand. Moreover, Turkey recorded the highest figure for the year including foreigners. This shows how viable the demand for residential real estate is.
The bulk of the 801,995 sales of apartments or houses sold in the country in 8 months were purchased for cash from personal savings such as foreign currency and gold. Sometimes, people get loans from employer companies. The share of mortgage sales in the total volume of transactions remains about 20%."