Back in 2015 when foreign capital flow to
Turkey began to slow down, the Turkish government came up with the idea of
giving foreigners Turkish citizenship in order to revive the real estate
market.
The law, issued earlier this year granted
the right to obtain of Turkish citizenship to those who invest at least $ 2
million in Turkey or buy property worth of $ 1 million and retain it for three
years without any other conditions.
The law granted the citizenship to those running
business within Turkish at least 100 Turkish workers or deposit $ 3 million in
Turkish banks for at least three years or buy government bonds worth $ 3
million.
Turkey's property sales have rebounded in Turkey after issuing the law and foreigners continue to buy at the same pace by the end of 2017, Turkey may end this year with a new record in the real estate sector, Turkish analyst Mehmet Mutin Gulic said on the Monitor website.
According to Ministry of Economy analysis,
real estate purchases accounted for half of FDI in Turkey from January to
September. In the first nine months of 2016, Turkey attracted just over $ 9
billion of foreign direct investment, including $ 2.9 billion gone to real
estate, which accounted for 32.6% of the total.
In the same period of this year, the total
value of foreign direct investment fell to about $ 7.3 billion, but real estate
purchases rose to $ 3.68 billion, or about 50.2% of the total, the first time
that real estate purchases exceeded foreign direct investment.
Analysis reveal that foreign purchases of
real estate rose to $ 2.6 billion in 2012, $ 3 billion in 2013, $ 4.3 billion
in 2014, $ 4.2 billion in 2015 and $ 3.9 billion last year.
Based on the average quarterly figure for
the period from January to September, total sales this year could break a
record to about $ 5 billion.
Gulic attributed this upward trend to the devaluation of the Turkish lira, which made Turkish homes cheaper. Citizens of increasing unrest in the Middle East are on the top of the list of foreign buyers, and Turkey's attraction to the Middle East as a more stable and liberal Muslim country.
Citizens of Iraq, Syria, Iran, Kuwait and
Saudi Arabia occupy prominence among foreign buyers.
According to official data, foreigners
bought 2,677 houses in Turkey in October with an increase of 71% over the same
month last year. In the first ten months, sales amounted to 171,818 with an
increase of 21.3% over the same period in 2016.
The Saudis took the lead of the foreign
buyers list in October with 528 properties, followed by Iraqis with 344
Azerbaijanis with 278, Kuwaitis with 154 and Russians with 125 properties.
President of the Ozyurtlar group " Tamer Ozyurt" believes that increased instability in the Middle East is an important factor in Middle Eastern buyers' interest in purchasing homes in Turkey. "With the deterioration of calm and stability in the Gulf, Turkey's attractiveness has increased as a safe area," Ozyurt said.
Eltan Elmas, president of the Developers
Association, predicted that November and December would see another increase in
sales.
"The Saudis have great potential and are buying abnormally now" said Mojadat Guler, chief executive of Nova Holding.
According to Guler, property sales to
foreigners will reach $ 5 billion by the end of the year, but he regrets that
Turkey offers little to up-middle income buyers and thus lacks a high turnover
rate.
"Our prices are very low, and if we can target the high-income level, real estate sales to foreigners in Turkey could rise to between $ 10 billion and $ 20 billion a year," Guler said.