Boom in the market
According to the Turkish Statistical Institute (TÜIK), the number of sales in the housing market in the country has more than doubled over the year. Apartment prices have increased by an average of 3.4 times compared to May last year, and in some regions, for example, in Antalya and Istanbul, more than fourfold. At the same time, the number of contracts with foreign citizens has increased almost 5 times.
The rapid fall of the lira against the euro and the dollar has made square meters in the Turkish provinces more accessible to foreigners. In addition, the local population began to invest in apartments and houses in order to protect savings from inflation, which reached a record level of 73% year-on-year in May.
Of course, the real estate market was significantly affected by the outbreak of hostilities on the territory of Ukraine on February 24, 2022 and the subsequent sanctions against Russia, to which Turkey did not join, mainly for economic reasons. The state in which the resorts beloved by many are located remains one of the most loyal to the citizens of the Russian Federation. Planes continue to fly to Ankara, Istanbul, Antalya, Izmir. A number of Turkish banks accept transfers from Russian banks that are not disconnected from SWIFT, as well as Mir cards issued by non-sanctioned banks.
Thus, Turkey is a fairly close, accessible state for flights, in which, as in other countries, it is difficult, but possible to make transactions. Some residents of Russia and Ukraine began to consider the long-familiar tourist oasis as a destination for relocation. According to the Turkish Statistical Institute, Russians have been leading among foreigners investing in real estate for the second month. The number of home buyers in Turkey and among Ukrainians has increased.
Changes in legislation
Recall the changes in Turkish legislation adopted in April-June 2022, which affected the demand for apartments and houses in the country.
From June 14, 2022, the threshold for the value of real estate under the citizenship by investment program has been raised from $250,000 to $400,000.
From May 5, 2022, in order to obtain a residence permit for the purpose of subsequent citizenship, it is necessary to invest in square meters not any amount, as it was before, but $75,000 for large cities and $50,000 for small settlements. For registration of a tourist-type residence permit, which is issued for a period of 6 months to 2 years with the possibility of extension, there are no restrictions on the volume of investments.
Starting from July 1, 2022, quotas will be introduced for the number of residence permits issued in some areas of Turkey. The possibility of obtaining a residence in certain locations of the republic will actually be closed.
In June 2022, a regulation was adopted according to which it will be impossible to increase rents by more than 25% in the country until July 2023.
The measures taken by the Turkish government are aimed at some restrictions for foreign investors, as against the background of the economic crisis, rising prices, rising cost of living, the discontent of the local population is growing, for whom buying and renting an apartment becomes inaccessible (there is also a boom in the rental market).
Real estate market according to the results of the 2nd quarter of 2022
We talked with the heads of Turkish real estate companies about how economic circumstances and legislative changes have affected the situation on the market, and whether it is worth investing in apartments and houses in the republic today.
What motives currently prevail among buyers?
Sergey Volchenkov, Development Director at Tolerance-Homes: The main motive now is to buy real estate for permanent residence. Many seek to obtain citizenship, if the budget allows, or to issue a residence permit.
Aysun Tekce, Director of marketing in Tekçe Overseas (Antalya Homes): Inflation is rising all over the world. And the best way to save savings from depreciation is to invest in real estate. In addition, Turkey is a beautiful country with a wonderful climate. This is always one of the main reasons for buying real estate here. Taking into account recent events, it is important for buyers from Russia and Ukraine to purchase an apartment in order to obtain citizenship and a residence permit.
Ksenia Baldzhi, Executive Director at Liga Real Estate:A common reason for buying a home recently time – permanent residence registration, people are looking for «a spare airfield ». In addition, there are many investors in the market, as due to high demand, the price is also growing, new regions are being developed.
What type of housing is most often bought?
Ksenia Baldzhi: Apartments of layouts «1+1» (with one bedroom) and «2+1» (with two bedrooms) – are the most popular in terms of resale and rent. For permanent residence, choose «2+1», «3+1» and duplexes.
Sergey Volchenkov:Foreigners most often buy housing for themselves, choose cities that have everything for permanent residence. Many are considering options that are suitable for obtaining citizenship.
Aysun Tekce: Most of the transactions – 90% – fall on apartments. The main reason for this is the urban transformation of territories. Land prices in Turkey are high, so cities are growing up, there are a lot of skyscrapers.
Did the increase in the price threshold for obtaining a residence permit for the purpose of subsequent naturalization affect the demand?
Sergey Volchenkov: This is a question on which there is a lot of incorrect information. The threshold has not been raised yet, so the issuance of a residence permit is still taking place according to the old rules. When the change comes into force, it will apply only to those who want to obtain Turkish citizenship in the future. Previously, people who bought real estate could apply for citizenship after 5 years of residence in the country. For those who want to get a passport in this way in the future, the required investment threshold will be from $75,000 for large and tourist cities and from $50,000 for regions.
Ksenia Baldzhi:The investment threshold for a regular residence permit has not been increased, the threshold for a cumulative residence permit has been increased. Now it is still possible to issue a tourist residence permit when buying real estate of any value, which will give the right of residence with a timely extension, but will not allow the owner to apply for citizenship after 5 years.
Has the increase in the price threshold for obtaining citizenship affected the demand?
Sergey Volchenkov: The demand was high until June 12, 2022, when the limit for obtaining citizenship was another $250,000. However, I must say that there are still a lot of people interested in this program, since even $400,000 is not too high a threshold to obtain citizenship for the whole family.
Aysun Tekce: We don't see a significant negative effect right now, but the changes have been made recently. Given the reaction of the Turkish public, we predict that the limit will be increased even more.
Ksenia Baldzhi: Yes, the increase in the price threshold affected. When the events of the military operation began, all those who postponed this issue indefinitely began to receive citizenship, citizenship transactions exceeded the usual transactions for the acquisition of "real estate for recreation". Plus, the record fall of the lira and the need for an influx of currency into the country also prompted the authorities to increase the threshold.
Does the economic crisis in Russia affect the foreigners who have movedcountry?
Aysun Tekce: The economic situation mainly affects the local population. Foreigners who have moved to Turkey have an income above a certain level, and most of them receive earnings outside Turkey in euros or dollars.
Ksenia Baldzhi: Does not affect. If you look at the ratio of the lira to the ruble-tenge-euro-dollar, Turkey is still very affordable.
Which regions/cities are in the greatest demand now? Have there been any changes in preferences?
Ksenia Baldzhi: A promising direction – Mersin. This city is still more affordable than the Antalya region, although prices here have increased by almost 40% over the year. In Alanya, the new district of Demirtas, Gazipasha is being developed. People started buying more for the future, stopped being afraid of undeveloped areas, realizing that development is a matter of a couple of years.
Sergey Volchenkov : Those who come for permanent residence choose cities such as Antalya, Istanbul, Mersin, where there are more advantages not just for recreation, but also for life, work, and education of children. For people who prefer quiet cities with a leisurely rhythm, Alanya is suitable.
Aysun Tekce:Istanbul and Antalya have always been the main points of attraction and remain so to this day. We also see an increase in demand for Bursa, although not very significant. For purposes such as obtaining a residence permit or citizenship by investment, Istanbul and Ankara are mainly preferred. For a quiet life in a region with a good climate, choose cities along the coastline, such as Antalya, Alanya, Bodrum.
What regions/cities/locations would you recommend to a foreigner with a budget of up to 100,000 euros?
Sergey Volchenkov: Mersin, Antalya, Alanya
Ksenia Baldzhi:Mersin
Aysun Tekce:Yalova, Ankara
with a budget of up to 200,000 euros?
Sergey Volchenkov: Antalya, Alanya
Ksenia Baldzhi:Mersin, Alanya (Demirtas, Mahmutlar, Avsallar, Gazipasha)
Aysun Tekce: Bursa, Alanya, Antalya
with a budget of more than 200,000 euros?
Sergey Volchenkov: Antalya, Alanya, Istanbul
Ksenia Baldzhi:Alanya
Aysun Tekce:Istanbul, Bodrum
to obtain a residence permit?
Sergey Volchenkov: Antalya, Istanbul, Mersin
Aysun Tekce: Antalya, Yalova, Bursa, Ankara
to obtain citizenship?
Sergey Volchenkov: Antalya, Istanbul, Mersin
Ksenia Balji: Istanbul in terms of an adequate ratio of cadastral and market prices.But, I must say that in all the above-mentioned areas, you can find real estate for a residence permit and citizenship.
Aysun Tekce: Istanbul, Ankara
Author: Elizaveta BARSKIKH
Photos from the website were used depositphotos.com
