July property sales data published by the Turkish Statistical Institute (TurkStat) report strong bullish sentiment in foreign property sales with an increase of 46.7% from the same time last year.
Turkish Foreign Home Sales By Area
The jump in July home sales represents a significant increase to 4,192 with Istanbul being the favorite location of choice for foreign buyers recording 1,903 property transactions.
Strong demand for the Mediterranean lifestyle in Turkey’s sunny southern city of Antalya reported 764 property transactions.
Turkey’s capital city of Ankara is third place in popularity with foreign buyers recording 249 home sales.
The city of Bursa in Turkey’s northwest in the foothills of Mount Uludağ near the Sea of Marmara reported 217 property transactions to foreign buyers.
Lastly, Yalova city in the north-western part of Turkey near the eastern coast of the Sea of Marmara transacted 177 home sales to foreign buyers.
Turkish Foreign Home Sales By Country
Iraqi buyers led the composition of July home sales to foreign nationals in Turkey with 734 real estate transactions, followed by Iranian citizens who purchased 464 homes.
Second-holiday homes are popular with the Gulf Cooperation Council (GCC) buyers with citizens from Kuwait and Saudi Arabia purchasing 219 and 218 homes respectively. In near equal numbers to GCC buyers, Russian citizens recorded 215 home sale transactions.
Foreigners Enjoy Increased Purchasing Power
The bullish sentiment by foreign property buyers stems from a variety of contributing factors, the most notable being the depreciation of the Turkish Lira and the subsequent increase in purchasing power for holders of foreign currency.
Factors Contributing to the Record in Foreign Home Sales
Beyond the value attained from the devaluation of the Turkish Lira, recent Government tax incentives, citizenship programs, and geopolitical stability and other opportunities are all contributing factors fuelling the record numbers in foreign home sales.
18% VAT Exemption
The Turkish Government has recently passed a law for the exemption of eighteen percent value-added tax (VAT) payable on real estate transactions purchased in foreign currency.
Turkish Citizenship Program – Pathway to Citizenship
A recent Turkish Government immigration incentive with the introduction of the Turkish Citizenship program that awards a fast-track pathway to Turkish citizenship to any foreigner who purchases property in Turkey at no less than $250,000 USD in value. Clearly, a strong message and an enticing incentive to attract foreign investment, considering the former entry-level requirement to qualify for citizenship were set at one million dollars in real estate value. Learn more about how to obtain Turkish citizenship?
Off Plan Interest-Free Installment Options
While several Turkish banks offer mortgages to foreigners, not all foreign buyers qualify. Seeing an opportunity, several Turkish property developers offer interest-free installment options for off-plan purchases. This developer-led payment plan incentive lowers the cash-flow barriers to entry and has opened the doors to non-cash foreign buyers and individuals who are unable to secure a Turkish mortgage. Check apartments for sale by installment without interest.
Geopolitical stability has returned to Turkey after the provincial elections concluded in 2019. For the next four years, political leadership remains unchanged, creating an environment for political stability.
Turkish Lira Outlook
Post-election results, professional currency traders maintain a short bias on the Turkish Lira, meaning market sentiment forecast further Lira weakness and depreciation. This is great news for Turkey’s real estate and tourism industry as foreign currency holders gain greater value and purchasing power, a proven catalyst that stimulates the tourism and real estate industries.
Real Estate in Turkey Offers Value
Current real estate prices in Turkey are low compared to historical values, and significantly lower compared to property values in the European Union, United Kingdom, USA, and the Gulf States. The combination of value and the convenience of flight connections a few hours away to Europe, Britain, and the Middle East make the proposition of homeownership at such levels very attractive and one of several contributing factors fuelling record home sales to foreign buyers.
Construction Confidence Index rises 6% in August
Turkey’s Construction Confidence Index rose 6% in August with an increase in construction order book value up 7.5% and the total employment expectation indices up 5.1% compared to the previous month. Signs of confidence in the construction industry with greater order book sales and higher employment all support investor confidence in the real estate industry.
Turkey’s Economic Forecast (GDP)
Gross domestic product is the total value of all goods and services produced in a country in a year. It is considered an important indicator of the economic strength of a country, and a reliable indicator that provides the state of a country’s economy and standard of living. The higher and more stable a country’s GDP, the better the economic situation. According to the International Monetary Fund (IMF), Turkey’s Gross Domestic Product (GDP) is forecast for rapid and continual growth until 2024.