In the previous review, we looked at the general trends in the housing market in everyone’s favorite Turkey. Today we will continue to sum up the results of the first half of the year, this time from the point of view of a foreign investor: how much real estate was bought by non-residents of the country where they choose housing more often, whether they buy real estate for citizenship and how much they earn on rent. There are a lot of questions, one topic is more interesting than the other – so let’s finally get started!

The highest demand on record

Last time I wrote that the demand for real estate in Turkey is unprecedentedly high. However, the dynamics with which demand from foreigners is growing is much more impressive – 20,488 transactions or + 44% in 5 months compared to the same period in 2020. And this is not yet data for July – so the final score will be even higher. Some experts are already predicting that by the end of the year the number of sales will exceed the symbolic mark of 50 thousand transactions.

And if we compare June 2021 to June 2020, then the increase will be simply stunning – 4748 transactions per month or + 185%. In June 2020, let me remind you, there were 1664 sales. 4748 transactions with foreigners for the month before last, this is the highest figure in the entire history of observations. This is a historic moment – literally.

But if we look closely, we will see that the dynamics for the first half of the year, although positive, is uneven. The reason for this is the lockdown, which rolled into the market in waves, alternating with peaks due to deferred demand. Therefore, record and disastrous months replace each other throughout the year.

Here are the figures for the first half of this year:

• June – 4748 transactions;
• May – 1776 (lockdown);
• April – 4077;
• March – 4248;
• February – 2964 (lockdown);
• January – 2675 (lockdown).

There is no complete data for July yet, but it can be assumed that the June dynamics will continue, since this month instead of a lockdown, the authorities switched to a policy of “normalization” – that is, to stimulate the economy.

As for the cities, the most impressive dynamics in Istanbul. There, in the first half of the year, foreigners purchased 10,108 properties, of which 2257 in June – which is almost half of all June sales in Turkey.

Local analysts attribute such a rapid growth in demand in Istanbul to the construction of a new canal between the Black Sea and the Mediterranean Sea, where residential and business complexes with very developed infrastructure will be located.

This channel is very interesting for investors from Asia, so they are already looking for a place to live closer to the new business location. Among the leaders in the purchase of housing here are Iranians and Iraqis.

But Europeans and especially immigrants from the CIS are increasingly choosing Antalya and neighboring provinces, where the atmosphere is more conducive to rest than to work. It turns out very interesting – immigrants from hotter Asian countries tend to the cooler climate of European Turkey, and Europeans, on the contrary, often go to the sultry southern latitudes.

The average check for foreigners and what affects it

According to the GİGDER association, the average check for the first half of the year for the purchase of housing amounted to 150 thousand dollars. At the same time, more than $3 billion of foreign direct investment entered the industry in 5 months. This allows us to expect an inflow of 6 or even 7 billion dollars by the end of the year – this will also be a record.

Such dynamics has already spurred prices to new heights – on average in the country they increased by 29% in the first half of the year, and in large cities – by 24-32%. Interestingly, developers are likely to expect further price increases. This is evidenced by the fact that they have increased the volume of investments in new facilities by more than 42%.

Another trend affecting the price is the growth of competition among foreigners – this market is increasingly segmented. So, previously immigrants from regions neighboring Turkey or from countries where there is a large Turkish diaspora (Germany, for example) dominated.

However, starting this year, the authorities are heading to attract investors from far abroad – we are talking primarily about the countries of South and East Asia, where India and Singapore are named among the highest priority targets. Also, the Turks intend to intensify their activity in Africa. If this plan is successful, then the competition for every square meter, especially in the premium segment, will become even higher, as will the prices.

GİGDER analysts predict that immigrants from Africa and the Far East will occupy a market share of 25% each in the coming years. Thus, displacing the representatives of the CIS and other regulars of Turkey. But for our compatriots, this is also good news – it means that housing purchased for investment will be bought from you even more willingly.

We also see a pronounced regionality – Russian-speaking home buyers have chosen Antalya as their base location. And we did the right thing – we also moved our central office here a few years ago.

Rent: is it possible to make money on it in Turkey?

This summer, you can not just make money on it – in order NOT to make money, you have to try very hard. Because demand and prices are rising literally every day. However, there is a nuance here – the rental market, especially short-term, is not entirely transparent. Therefore, it is almost impossible to calculate it accurately.

And it is opaque, including because the country has an official threshold for raising rents, which this year is 14.55% – it cannot be exceeded. But it is relevant only when the contract is extended, and if the contract is new, then the appetites of the owners are regulated only by demand and the market, as well as the tax burden.

The analysis of rental rates, which directly depend on demand, comes to our aid. The average increase in rates in the country was 17.43% or from 9.26 to 11.18 Turkish liras per square meter. However, this indicator does not reflect the realities much, because, depending on the province and district of the city, growth can be either + 1% or + 70% per year.

This year’s list of leaders may seem unexpected to the reader from the outside, because the Top is not only tourist centers, but also more modest provinces. For example, Karaman became the undisputed record holder with an increase of + 70%. Mersin (60%) lagged behind him a little, as well as Afyon, Diyarbakir, Nevsehir, Tekirdag, Giresun, Istanbul, Antalya, where the increase was 35-50%.

At the same time, in the city of Istanbul itself, the increase is highly dependent on the area and can range from 30% to 70%, where Besiktas, Umraniye and Atasehir are in the lead. In Antalya, the dynamics are lower, but everything is also very dependent on the location, especially when it comes to villas in the province around the city.

For a “house by the sea” with an area of 90-120 square meters, they now ask for 7-10 thousand liras per week, but for a serious villa with an area of 200-300 square meters, they can demand up to 50 thousand Turkish liras weekly, which is an order of magnitude higher than a year earlier.

Surprisingly, even with such high prices, it is becoming increasingly difficult to find a vacant villa by the sea in a good area. Because the region also demonstrates high business activity – out of 83 companies registered in the free zone of Antalya province, 31 legal entities have a foreign founder. These people live right there.

Plus, the province and the “southern capital” itself literally attract Russian-speaking foreigners, who now not only rest here, but also live throughout the year, often working remotely – hence the demand, and, accordingly, the growth of rental rates by 25% or more.

Why foreigners choose Turkey: the opinion of foreigners themselves

According to surveys, 83.2% of foreigners who bought a house in Turkey in the last 6 months are completely satisfied with their purchase, which is a very high figure in the world. At the same time, 7 out of 10 investors intend to purchase another property. Foreigners have felt the profit and want to take advantage of the favorable situation to the fullest.

An earlier survey conducted by GİGDER at the beginning of the year explains these results well. Then investors were asked about the key advantages of Turkey, among which they chose the 5 main criteria that they pay attention to when buying: good price, location, landscape and view, profitability, as well as infrastructure and quality of construction. All these points are rated very high in Turkey.

No less in demand is the motive for obtaining Turkish citizenship – usually the second, while maintaining your main passport. According to official data, 40 thousand clients issued citizenship after the purchase of real estate under a simplified procedure per year – and this does not take into account their family members. If we take into account that about 45 thousand objects are sold to foreigners per year, then it turns out that most transactions end with obtaining citizenship.

Turkey does not disclose the financial information of its citizens to other states, which is very attractive to those for whom the tax regimes of their countries become a burden. Even if people plan to use it only when they enter during the holidays, they still take it – if they give it, why not? Moreover, in our agency, all services for obtaining citizenship are free in the case of purchasing housing.

Inference

There can be only one conclusion here – if you intend to buy comfortable housing in fabulous and generous Turkey, then you better hurry. Otherwise, all the fun will be sold out to you. Expert Property employees know exactly which properties are optimal and can draw up any documentation – and almost all of our services are free if you purchase housing from us.

Do not waste time, because time is money. Contact me or our specialists right now!

Yours Tatiana Güneş