How have changes in Turkey's immigration policy affected the real estate market?
How does the closure of districts affect immigration status in Turkey?
How has the real estate market in Turkey changed and what does it mean for buyers?
Plans to restrict residence permits
In May 2022, the Turkish authorities announced their intention to significantly reduce the number of visas for foreign citizens. The country's Interior Minister, Suleyman Soylu, emphasized that the percentage of foreigners in certain regions should not exceed 20%. The final decision on this matter was announced at the end of June, and it was prompted by the increase in the number of migrants, primarily from Middle Eastern and Central Asian countries such as Iraq, Turkmenistan, and Syria.
Serious migration issues
The situation with illegal migration in Turkey remains extremely serious, as there are currently over 3.7 million Syrian refugees in the country. Foreigners often compete with local residents for jobs, which causes dissatisfaction among the population. These circumstances are exacerbated by the overall economic difficulties that Turkey is facing.
The economic situation in the country
Inflation rose to 73% year-on-year in May, while the sharp depreciation of the Turkish lira against other currencies is leading not only to rising prices for goods but also to increased costs for real estate and rent.Over the past year, housing prices have increased by 172%.Many Turkish families are facing difficulties in purchasing their own homes and are increasingly forced to allocate significant funds for rent.
Interest in Turkish real estate
Nevertheless, interest in the Turkish real estate market from foreign buyers continues to grow, opening up new opportunities for investors. In April and May of this year, the majority of foreign investors in the Turkish housing market were citizens of Russia. After February 24, Turkey became particularly popular among the citizens of this country, which was thoroughly analyzed in recent materials about the changes in the perception of Turkey.
New restrictions on obtaining citizenship
However, the authorities' desire to attract foreign investors through favorable conditions for obtaining residence permits and citizenship is seen as a factor that has negatively impacted the already difficult economic situation in the country. In May 2022, new restrictions were introduced on obtaining citizenship through investments and residence permits with the right to a passport.
Changes in the "Ikamet" system
These changes pertain to the so-called "ikamet" — a tourist residence permit that could previously be obtained with fewer difficulties by providing a rental agreement or proof of property ownership. This type of residence permit is issued for a period ranging from six months to two years, granting legal status for living in Turkey, including the ability to study in public schools and access to other forms of adaptation.
Social and economic consequences
Ultimately, the new measures concern not only migration policy but also the socio-economic aspects of interaction between local residents and foreign citizens. It is important to recognize that these changes are occurring against the backdrop of escalating economic difficulties faced by the republic. Therefore, the new rules may create additional problems for both foreign citizens and Turkish citizens, necessitating careful analysis and the search for optimal solutions for all parties involved.
Introduction
There are options for extending one's immigration status; however, there are restrictions at the initial stage of obtaining a residence permit. Since July 1, 2022, a ban has been in effect concerning foreign citizens who rent housing and are applying for a residence permit for the first time. As a result, they may face rejection.
Restricted areas for obtaining a residence permit
A similar fate awaits those who already had a residence permit but want to change their address to another one located in the so-called "closed" zone. In this case, obtaining a new residence permit will be impossible. Unfortunately, even those who own property in such areas, previously acquired, will not be able to obtain an initial residence permit, regardless of the duration of ownership. However, it is possible to extend an already existing ikamet.
Geography of closed areas
As for the geography of the mentioned "closed" zones, the list includes 1,169 properties. It includes some famous areas that are well-known to the citizens of the CIS. Among these zones, we can highlight:
Alanya (Mahmutlar, Kestel, Avsallar, Kargicak)
Mersin (parts of the districts of Akdeniz, Erdemli, Gülnar, Mezitli, Silifke, Tarsus, Toroslar, Yenişehir)
Istanbul (some areas of Şişli, Fatih, Esenyurt)
Real estate market reaction
How did the real estate markets react to these changes? We reached out to representatives of major Turkish agencies that serve foreign clients to get their opinion.
Expectations and reality
Was anyone aware of the closure of over a thousand districts for obtaining primary immigration status? Sergey Volchenkov, who is the development director at Tolerance Homes agency, noted that this decision was expected, but many details remained unknown until recently. On May 16 of this year, the Turkish immigration authorities published a list that included 781 districts in 25 provinces. Later, the Minister of Internal Affairs added that this list would be expanded starting from July 1.
Issues with submitting applications
Who has been affected by the issue of closing these areas? Ksenia Balzhi, the CEO of Liga Real Estate, mentioned that the current migration services no longer consider applications for primary residence permits. People who have already obtained their status can extend it. However, new residence permits are not being issued, regardless of ownership documents, rental agreements, or refugee status.
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Influence on demand
How does the closure of districts affect demand in this segment? Anastasia Kezik, the marketing director of Alanya Property Sales, reported that there is currently a slight decrease in interest in real estate in Turkey. This is due to the fact that many of the most popular areas have become inaccessible for obtaining immigration status. In Alanya, for example, places like Kestel, Kargicak, and Mahmutlar, which have a large number of foreigners living there, are now difficult to obtain residence permits in.
The last of these regions is even jokingly referred to as the "blessed carpet" of the former Soviet Union. We can see how investor interest is shifting to other, less sought-after areas.
Changes in the Turkish real estate market
Recently, there have been significant changes in the Turkish real estate market, especially concerning those areas that previously attracted a lot of interest from foreign investors. Housing prices in these popular locations have started to decline, and buyers are showing increased interest in other, less well-known regions. How are builders and potential property buyers responding to these changes?
Reactions of developers to the changes
Anastasia Kezik, representing the association of builders and entrepreneurs, reports that the organization has prepared a request to reconsider the new legislation. This is necessary to protect the rights of buyers, especially those who have invested in properties that are not yet completed. In places like Alanya, where authorities have imposed restrictions on property purchases by foreigners, construction work is still actively ongoing.
There are plans to commission many new residential complexes in 2023-2024. However, potential buyers are approaching the purchase of housing in such complexes with particular caution, as there have been issues with refunds from companies for clients who paid for apartments in installments. Ultimately, new residents may face a situation where they are unable to use their housing for an extended period.
Changes among foreign buyers
There have also been changes among foreignreal estate buyers. Previously, many invested in properties during the early stages of construction, hoping to resell them at a higher price, but now such deals may turn out to be unprofitable. Locals are not showing interest in these offers, and the number of foreigners preferring short-term rentals has significantly decreased.
Problems with obtaining a residence permit
As for those who have already purchased an apartment in an area closed to foreign buyers and have not managed to obtain a residence permit, the situation is also complicated. As Anastasia Kezik reported, one of the managers faced issues obtaining a residence permit after the purchase. She was advised to either sell the property or simply wait it out.
Ksenia Balzhi adds that for those who have become homeowners, the only option left is to wait. One can register at their place of residence in another, more open area, but for that, one actually needs to live there.
The immigration services provide an additional month after the visa-free period ends for finding housing.
However, the address specified in the documents must match the actual place of residence.
Turkish legislation does not allow for fictitious registration, which can lead to penalties.
Tips for potential buyers
For potential real estate buyers in Turkey, Sergey Volchenkov advises paying attention to open areas that are becoming increasingly popular, but this also leads to rising prices. If you intend to purchase property in areas closed to foreigners, it is recommended to wait until the end of the month when the holidays are over and initial information about the number of residency applications submitted and the decisions made on them becomes available.
Ksenia Balzhi also notes that those who haven't made a purchase yet should consider available areas without restrictions.
Conclusion
Thus, the real estate market in Turkey is showing significant fluctuations, and potential buyers should carefully analyze the situation and explore all possible options before making a final decision.
Conclusion
In conclusion, I want to emphasize that the recent changes in Turkey's migration policy have had significant consequences for both foreign citizens wishing to obtain residency and the local population. The ban on the initial acquisition of "ikamet" in several popular areas jeopardizes the dreams of many potential investors and tourists. This decision, which has resulted in serious economic circumstances within the country, exacerbates already existing issues such as high inflation and rising real estate prices.
It is easy to notice that this measure is aimed at protecting the interests of local residents, but at the same time, it creates new barriers for foreign investments, which play a key role in the growth of the real estate market. It is important to consider that the demand for real estate in Turkey remains high among foreign buyers, especially from residents of CIS countries. However, their opportunities have been limited, which could lead to a slowdown in economic growth and a decrease in investment inflow.
Highlights:
Change in migration policyaffects foreigners who wish to obtain a residence permit.
Ban on the initial issuance of "ikamet"in traditionally popular areas.
The importance of protecting the local population and its interests.
Limiting capabilities forforeign investmentsthat can slow down economic growth.
The situation requires careful analysis and possibly a reassessment of approaches to immigration policies. Opening new opportunities for foreign citizens will not only contribute to the development of the real estate market but also enrich cultural exchange, which, in turn, will help Turkey maintain its status as an attractive destination for living and investment.
Prospects
So, we are witnessing a clear conflict between the country's economic interests and the desire to protect the local population. Time will tell whether Turkey can find a balance between these two important aspects and how the real estate market will change in the near future. We will closely monitor the situation's developments and hope for a solution that is appropriate for both Turks and foreign citizens.
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