Analysts shared information with foreign investors on the number of real estate transactions in Turkey for the period of January to June 2024. Turk.Estate has prepared an overview with detailed statistics and the latest trends.
Content:
- Final figures
- Investments to obtain citizenship
- Istanbul as the top destination
- Potential goals and case scenarios
Final figures
Sales number keep declining. Let's turn to statistics on real estate in Turkey. 35,383 transactions were concluded in the first 6 months of 2022. The number of properties sold decreased by 45% (to 19,275) compared to the same period in 2023. The trend keeps going on in 2024: the number of real estate transactions in the most popular Antalya and Istanbul decreased by another 45.7% in the first 6 months of this year: to 10,461 units. Meanwhile, many foreigners switched from Antalya, Alanya and Istanbul to Dubai housing.
The statistics on sales of real estate in development projects in Turkey to foreigners in Q2 2024 are as follows:
- January — 2,061 housing units were sold, of which Russians purchased 555 lots. This is followed by citizens of Iran (208), Ukraine (127), Iraq and Kazakhstan (99 each);
- February — 1,846 (Russia — 395, Iran — 200, Iraq — 112, Ukraine — 105);
- March — 1,778 (Russia — 411, Iran –—182, Ukraine — 129, Iraq — 82);
- April — 1,272 (Russia — 293, Iran — 117, Ukraine — 91);
- May — 2,064 (Russia — 437, Iran — 207, Ukraine — 171);
- June — 1,440 (Russia — 332, Iran — 156, Ukraine — 102).
Based on reports, foreigners accounted for 1.8% of all housing sales in June 2024. Overseas buyers preferred cities, such as Istanbul, Antalya and Mersin, almost every month to buy apartments in Turkey.
Moreover, Antalya, the "resort capital" of Turkey, ranks first to make a deal: 3,868 out of the 10,461 housing units purchased in six months make up nearly 40%. Antalya has been a leader in concluding deals with international buyers since 2022.
Foreigners purchased 3,606 properties (apartments or houses in Turkey) in Istanbul, the "silver prize winner", in January-June 2024. Unlike resorts, this city is popular all year round, so the demand for housing here is consistently high.
According to data published by the Turkish Institute of Statistics (TÜIK), other areas in great demand from foreign buyers include:
- Mersin — 942 lots in six months;
- Ankara — 248;
- Yalova — 238;
- Bursa — 229;
- Izmir — 182;
- Kocaeli — 170;
- Mugla — 155;
- Sakarya — 134.
Analyzing the causes of the drop in foreign housing sales, a highly debated topic in the real estate and construction industry, Selman Özgün, chairman of the Board of Directors of Helmann Yapı Holding, said that the reduction in the number of transactions, which began in 2023, would continue until the end of this year: "We expect that the volume of deals will be 22,000-23,000 by the end of the year. Considering that two years ago, home sales to foreigners broke a record — 67,490 units — the decline is quite sharp."
The reason is simple: there could be an increase in transactions if the rules for issuing a residence permit for buying residential real estate (TAPU) were less strict. Anticipated legislative loosening is necessary, as the country needs direct cash injections into the treasury. Thus, Turkish players in the construction industry are seeking to reorient the attention of overseas buyers from the UAE back to their country in the near future.
Speaking about the situation, Mr Özgün also noted: "We believe that it is necessary to separate immigrants and international investors. There are some difficulties with issuing a residence permit to foreign investors. Without a residency permit, they are unable to reside here, have access to utilities or use several services." Therefore, foreigners do not stay in Turkey as long as they would like. This means that overcoming bureaucratic obstacles for them should be normalized or "facilitated".
High prices are another factor leading to the decrease in the amount of transactions: Turkey is no longer as profitable for investors as it used to be, as the cost of housing is growing rapidly in both Turkish lira and dollars. Therefore, foreign investors prefer to choose other countries. "For example, you can sell villas in Turkey in such areas of Istanbul as Güngören, Bağcılar and Esenler, and buy apartments in sought-after areas of Spain and the United States," the expert recalled.
As a result of the circumstances, local market players are considering the option of providing some benefits to foreign nationals, for example, to create more incentives for obtaining visas, residence rights and citizenship: "We must put forward a more detailed and precise programme," said Selman Özgün.
Investments to obtain citizenship
Despite the overall decline in sales in the first 6 months of this year, the number of buyers purchasing housing to obtain a Turkish passport has doubled, analysts said. According to data announced by EVA Gayrimenkul Değerleme, 43.6% of real estate investments were made by foreign nationals in Turkey in the first six months of 2024 to obtain local passports. This figure was 18.6% over the same period last year.
It is interesting to note that 73.2% of the real estate purchased to obtain a Turkish passport is located in Istanbul.
Additionally, Istanbul, Antalya and Mersin are the top three cities preferred by citizens from other countries making up 85.9% of all transactions.
The list of the most popular destinations also includes Yalova, Ankara, Kütahya, Bursa, Izmir, Mugla and Kocaeli.
As for the nationality of buyers who purchase apartments in development projects in Turkey to obtain a passport, Iran ranks first. It is followed by citizens of the Russian Federation, China, Iraq, Afghanistan, Palestine, Pakistan, Egypt, Ukraine and Sudan.
Istanbul as the top destination
Foreigners concluded 4,559 real estate transactions in Istanbul in the first 6 months of 2024. 89.9% of the total volume consisted of lots bought for the purpose of obtaining citizenship quickly.
The following districts of the megalopolis are in the top 3: Esenyurt, Beylikdüzü and Başakşehir. They are followed by Küçükçekmece, Bağcılar, Büyükçekmece, Avcılar, Kağıthane, Şişli and Kadıköy.
Potential goals and case scenarios
Istanbul and Antalya remain leaders among foreign buyers. The opening of a new international airport in Mersin is contributing to its increasing popularity. Due to the development of transport infrastructure, Mersin may soon turn into another popular resort, along with Antalya, Alanya, Kemer, Marmaris, Fethiye, etc., especially if airlines hurry up to launch direct flights there from different countries. In this scenario, there will be an increase in demand for residential real estate in Mersin leading to a rapid rise in prices.
If some "closed" areas for obtaining residence permits are reopened in Antalya, it will attract more buyers. Some foreigners are willing to spend $200,000 on a property in their favourite place and live there for several years on a residency permit before applying for citizenship as part of the procedure, instead of giving $400,000 to get a passport. There are rumours about the "opening" of areas attractive to buyers of residential real estate. As experience shows, when rumours spread among experienced real estate agents, there is some truth in them.