Turkish real estate piques Western buyer interest amid record sales

Foreign buyers purchased a record number of residential properties in Turkey from January through August of this year, data showed Tuesday, as the real estate market rebounds from the fallout of the coronavirus pandemic.

Buyers from Western nations particularly showed high interest as some 30,849 houses were sold to foreigners in the first eight months, a 47.6% year-on-year increase, the Turkish Statistical Institute (TurkStat) data showed.

Sales have been maintaining an upward trend through most of this year, except for a brief disruption in May after the government imposed a tough but brief lockdown due to surging COVID-19 cases. All measures were lifted in June.

It was May that saw the lowest level of this year as sales to foreigners amounted to only 1,776 units before rebounding to 4,748 in June, 4,495 in July and 5,866 units in August.

The August figure marked a 50.7% year-on-year increase and the second-highest monthly sales level ever after 6,276 units were sold in October 2018.

The metropolis Istanbul had the lion’s share with 14,788 units sold to foreigners, followed by the southern holiday resort Antalya with 5,897 units, the capital Ankara with 1,988, Mersin with 1,410, and Yalova with 939 units.

Iraqi citizens topped the list among nations as they purchased 4,631 properties from January through August, followed by Iranians with 4,600 units, Russians with 2,575, Afghans with 1,819 and Germans with 1,186.

Among others, Kuwaitis and Americans bought 873 and 871 residential properties, respectively, during the eight-month period, the data showed.

Overall house sales in Turkey saw a 21.7% decline to 801,995 units in the first eight months as the rise in borrowing costs continues to weigh on the market. Mortgage sales fell 67.9% from a year earlier to 152,096 units, the data showed.

In August alone, sales were down 17% year-on-year to 141,400. Mortgaged sales dropped 64% to 27,375.

Cheap loans extended to ease economic fallout from the pandemic drove the 11.2% year-on-year rise in the overall house sales in the country in 2020, when nearly 1.5 million houses, an all-time high, changed hands.

Western footprint

Ömer Faruk Akbal, the chairperson of the Real Estate International Promotion Association (GIGDER), noted the upward trend in sales to foreigners, saying they inched closer to the year-end sale target of 50,000 units.

Akbal also stressed the ever-growing interest of buyers from the U.S., who have jumped to rank eighth in house purchases in Turkey among nations.

Americans had purchased 58 properties in August a year ago, and now the figure tripled to 173 this past August.

All this data, Akbal said, shows how attractive the Turkish market has become in international real estate in terms of climate, health and tourism values.

“Today, many different geographies are also displaying more and more interest in Turkey. This is also pleasing for our sector and for our country.”

Nazmi Durbakayım, the head of the Istanbul Constructors Association (INDER) also stressed the fact that the U.S., along with Germany, has entered the top 10 nations in Turkish residential property sales.

Durbakayım said they expect around 15,000 more houses to be sold in the remaining four months.

“Thus, we think that we will reach a new sales record by surpassing the peak of 45,483 units achieved in 2019,” he noted.

The momentum with the summer months could continue through the end of the year, according to Helmann Yapı Chairperson Selman Özgün.

Despite the outbreak, Özgün said Turkey has had a good tourism season, which reflected on sales to foreigners.

The sales numbers are not a surprise, said Özyurtlar Holding Head Tamer Özyurt.

“The Turkish real estate sector, which is considered a safe port, has always been a prior business line that attracts investment. Foreign investors still see Turkey as a safe haven,” Özyurt said.