Residential property sales in Turkey maintained their upward trend to clinch their best March ever, data showed Friday, also propelled by the pace in interest from foreign buyers.
The rise comes amid declining supply and soaring prices, but industry representatives say data demonstrated that households continue to view real estate as an attractive investment tool.
House sales jumped 20.6% year-over-year to 134,170 units last month, the highest March figure to date, the Turkish Statistical Institute (TurkStat) said.
It is up from 111,241 units in the same month a year ago and followed annual rises of 113.7%, 25.1% and 20% in December, January and February, respectively.
Sales in March were well below 226,503 houses that changed hands in December.
The data also showed March mortgaged sales rose 38.8% from a year earlier to 30,271, accounting for 22.6% of the total sales in the period.
The January-March sales jumped 21.7% year-over-year to 320,063 units, the institute said.
"The acceleration of sales at a time when the supply of new houses is decreasing throughout the country once again registers the fact that real estate is a safe haven," said Coldwell Banker Turkey Country President Gökhan Taş.
"And despite the growing cost pressure, such a picture also shows how much demand in the country is driven by need," Taş told Anadolu Agency (AA).
Russians pour in
Sales to foreigners rose 31% in March to 5,567 units, the TurkStat said, with Iranian citizens topping the list as they purchased 784 properties last month.
Iraqis with 741 units bought and Russians with 547 were the next biggest buyers of Turkish properties, it added.
Istanbul, Turkey’s largest city in terms of population, had the lion’s share of sales to foreign buyers – 2,245 units.
The Mediterranean resort city of Antalya followed with 1,434 properties and the capital Ankara came in third with 347.
Nazmi Durbakayım, the head of the Istanbul Constructors Association (INDER), said the fact that sales exceed the 5,000 limit demonstrates that the foreign exchange inflow maintained its pace.
Foreign home sales from January through March jumped 45.1% on an annual basis to 14,344, according to the data.
The figure also marked the highest first-quarter sales ever to foreign buyers.
Iranians topped the list with 2,256 units bought, followed by Iraqis with 1,887, the data showed.
Purchases by Russian citizens surged by 63.6% year-over-year to 1,535, the data showed.
Wealthy Russians are pouring money into real estate in Turkey and the United Arab Emirates (UAE), seeking a financial haven in the wake of Moscow’s invasion of Ukraine and stifling Western sanctions, many property companies say.
Sanctions imposed since the Feb. 24 invasion include Russia's exclusion from the SWIFT banking system and targeting individuals, mainly oligarchs considered close to Russian President Vladimir Putin.
While Turkey and the UAE have criticized the Russian offensive, Ankara opposes non-U.N. sanctions on Russia and both countries have relatively good ties with Moscow and still operate direct flights.
Ankara is trying to balance its close ties with both Russia and Ukraine and has positioned itself as a neutral party trying to mediate.
Many Russians and Ukrainians fleeing the war have flown to join their relatives residing in Turkey, while others opted for renting or real estate purchases.
Citizenship-for-homes threshold
The house sales data comes as foreigners looking to buy homes in Turkey to become Turkish citizens will now have to pay more.
The amount that foreigners have to pay for a property and commit to keeping it for at least three years to get a Turkish passport is about to be increased to $400,000, according to a decision discussed at the Cabinet meeting this week.
Ankara adopted the citizenship-for-homes scheme in 2017. A year later it cut the minimum price to $250,000, from $1 million, to attract foreign buyers.
Some 7,000 foreigners received citizenship via home purchases between 2017 and 2020, the government said last year.
The revised regulation may negatively impact sales to foreigners, said Ömer Faruk Akbal, head of the Real Estate Overseas Promotion Association (GIGDER).
Turkey has been generating up to $7 billion a year and has been among the top 10 nations in house sales to foreigners, Akbal told AA.
In addition to the real estate, those eligible for citizenship include foreigners who are determined to have made at least a $500,000 investment in the country.
It also includes foreigners who have employ at least 50 people, those who have deposited at least $500,000 into Turkish banks and kept it there for at least three years, those who have purchased and kept for three years at least $500,000 in government debt, or those who have made a venture capital or property fund purchase of at least $500,000.
Foreign home sales hit a record 58,576 units in 2021, a 43.5% year-over-year increase. The previous annual record was set in 2019 with 45,483 units sold to foreign buyers.
Sales had also accelerated as a depreciation in the Turkish lira made Turkish property more attractive to foreign buyers, with the authorities pursuing the new economic policy of low interest rates to boost credit, exports and investments, saying it would help the country weather inflation.
To support the drive, Turkey’s central bank had brought down the benchmark policy rate by 500 points since September to 14%.
The real estate industry has set a $10 billion revenue target from foreign home sales for this year, according to GIGDER's Akbal, who says the first quarter affirmed that the industry sales were "pretty successful."