Turkey’s buoyant real estate market sees record sales to foreigners

Sales of Turkish homes to foreigners hit an all-time monthly high in November, also taking 11-month sales to their highest level on record, official data showed on Tuesday, as a depreciation of the Turkish lira made purchases cheaper for those buying with hard currency.

Sales to foreign buyers jumped 48.4% year-on-year last month, according to data from the Turkish Statistical Institute (TurkStat). The 7,363 properties sold was the highest monthly level since the data series began in 2013.

This figure exceeds the previous record of 6,630 units set in September.

By far the largest number of foreign buyers were Iranian citizens, followed by Iraqis and Russians.

The housing market was generally buoyant in November, with overall sales up 59% year-on-year to 178,814 homes, according to figures from TurkStat.

The data comes amid high exchange rate volatility after the Central Bank of the Republic of Turkey (CBRT) cut its benchmark policy rate by 400 basis points to 15% since September. The bank is expected to cut rates again on Thursday.

The lira fell to a record near 15 against the US dollar on Monday, before rebounding after the central bank intervened for the fourth time in two weeks to support the currency.

The lira touched 14.4 to the dollar on Tuesday before recovering some losses to 14.192 at 0605 GMT.

Real estate sales to foreigners were strong throughout the year, rising 39.4% in the first 11 months to 50,735 units, exceeding the annual threshold of 50,000 for the first time even before the end of the year.

The industry is now marching towards a level that could reach 57,000 units by the end of the year, according to industry representatives. The previous annual record was set in 2019 when 45,483 homes were sold to foreigners in 12 months.

$10 billion revenue target for 2022

“We had set a revenue target of $7.5 billion from foreign sales for 2022. With the latest developments, we have revised it upwards to $10 billion,” said Faruk Akbal, Chairman of the Real Estate International Promotion Association (GIGDER).

Akbal said he expects foreigners to diversify their portfolios as the dollar appreciates, also pointing out that improving relations with Gulf countries will lead to greater interest in the property market from investors. of the region.

Foreigners spent more than $196,000 on average per house in the July-September period, he added, just below the $250,000 price – the minimum price for Turkey to grant passports to foreigners. foreigners – a regulation that has led to increased sales over the past decade.

“We aim to end 2022 with a basket price of over $200,000,” Akbal told Anadolu Agency (AA).

The most popular location for home sales to foreigners in November was Istanbul, with 2,922 sales, followed by the southern resort town of Antalya and the capital Ankara.

Sales in Antalya exceeded the 10,000-unit threshold for the first time in the first 11 months, Helmann Yapı Chairman Selman Özgün said.

“We have finally surpassed the target we set for ourselves of 10,000. We reached the level of 10,557 in 11 months… We also experienced the highest monthly figure ever in November with 1,917 units. We expect to reach 12,000 units by the end of the year,” Özgün said.

Iranians were the main buyers from January to November with 8,594 units, followed by Iraqis with 7,622 and Russians with 4,494.

Among others, Afghans bought 2,508, while Germans and Americans bought 2,062 and 1,265 houses respectively.

Total home sales in Turkey actually fell 9.2% to 1.26 million units in the 11-month period, compared to a year earlier.

The data also showed November mortgage sales jumped 61% from a year earlier to 39,366, accounting for 22% of the period total.

Last year, sales jumped on cheap credit, as the central bank lowered its key rate to ward off the impact of the coronavirus pandemic and state banks increased lending, prompting property developers to launch campaigns for buyers.

Low-cost loans drove the 11.2% year-over-year rise in overall sales in 2020, when nearly 1.5 million homes, an all-time high, changed hands.

Foreigners bought around 40,812 properties throughout the year, down 10.3% year-on-year from 45,483 units in 2019. This is still the second annual figure the highest ever recorded.

Adding to disruption from pandemic-related restrictions earlier this year, tight monetary policy has increased borrowing costs and weighed on sales.

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Penny D. Jackson