How have the crisis and military actions affected the real estate market in Turkey?

According to the latest data presented by the Turkish Statistical Institute (TÜİK), the housing market in Turkey has shown significant growth recently. Over the past year, the number of real estate transactions has more than doubled, and apartment prices have increased on average by 3.4 times compared to May of last year. In some sought-after regions, such as Antalya and Istanbul, this figure has risen by more than four times. One interesting trend is the sharp increase in contracts signed by foreign citizens, which has nearly quintupled.

Key factors driving market growth

The main factor behind such active growth is considered to be the sharp decline in the value of the national currency—the lira—against foreign currencies (euro and dollar), which has made the real estate market in Turkish cities more attractive to foreign buyers. Local residents, faced with record inflation that reached 73% year-on-year in May, have also started to actively invest their savings in real estate to protect their capital.

The influence of the international situation

An important factor that has influenced the real estate market is the military operation of Russia against Ukraine, which began on February 24, 2022. Immediately following this situation, international sanctions were imposed, but Turkey, considering its economic interests, did not join them. This country, known for its beautiful resorts, remains one of the most welcoming for Russians.

• Air connections with major cities such as Ankara, Istanbul, Antalya, and Izmir are ongoing.
• Many Turkish banks continue to accept transfers from Russian financial institutions that are not disconnected from the SWIFT system.
• Work with "Mir" cards issued by banks not subject to sanctions is also ongoing.

Trends in the real estate market

Thus, despite the challenges that have arisen, Turkey remains an accessible country for flights and real estate transactions. More and more Russians and Ukrainians are considering this country as a potential destination for relocation. According to statistics, Russians have held the leading position among foreign real estate buyers in Turkey for the second consecutive month, and there is also an increase in the number of Ukrainian investors.

Changes in legislation

Recent changes in legislation, enacted from April to June 2022, which have had a significant impact on the real estate market, cannot be ignored either.

• Since June 14, 2022The threshold for property value to participate in the "citizenship by investment" program has been increased from $250,000 to $400,000.
• Since May 5, 2022To obtain a residence permit with the possibility of converting it into citizenship, an investment of at least $75,000 is required in large cities and $50,000 in smaller towns.
• To obtain a tourist residence permit, which can range from 6 months to 2 years with the possibility of extension, there are no restrictions on the amount of investment.

Prospects of the real estate market

Thus, the current situation in the Turkish real estate market indicates the presence of numerous factors that are increasing interest among both local residents and foreign investors. In conditions of economic instability, other countries may seem less attractive, which opens up new opportunities for the housing market in Turkey. By keeping an eye on developments, one can conclude that this positive trend is likely to be long-term, providing a wide range of opportunities for advancing the real estate sector in the country.

Introduction of new quotas for residence permits

Starting from July 1, 2022, new quotas will be implemented in Turkey, limiting the issuance of residence permits in certain regions of the country. This decision will significantly reduce the opportunities for those wishing to obtain residency in a number of localities.

Limit on rent increase

In June 2022, a law was passed prohibiting rent increases of more than 25% within a year, until July 2023. The measures observed by the Turkish government are aimed at reducing the negative impact on foreign investors.

Response to economic challenges

This decision was a response to the growing discontent among local residents due to the economic crisis, rising prices, and increased living costs, which significantly complicates the process of purchasing and renting housing for the citizens of Turkey.

Activity in the rental market

In addition, there is a noticeable growth in the rental market. An analysis of the real estate market conditions for the second quarter of 2022 shows how economic conditions and changes in legislation have affected the current situation.

Experts' opinions on real estate purchases

We conducted interviews with representatives of Turkish real estate companies to understand whether it is worth investing in property in Turkey right now. Their responses indicate changes in buyer motivations.

Main motivations of buyers

Sergey Volchenkov, the development director of Tolerance-Homes, emphasizes that the main reason for purchasing real estate at the moment is the desire to obtain housing for permanent residence.

• Many people strive to obtain citizenship or, at the very least, to secure a residence permit, if their financial situation allows it.

Investing as a way to preserve funds

Aysun Tekce, the marketing director of Tekçe Overseas (Antalya Homes), points out the global issue of inflation. She believes that one of the best ways to protect savings from devaluation is through real estate investments.

The appeal of Turkey for living

It is important to remember that Turkey is famous for its wonderful climate and picturesque landscapes, which becomes a decisive factor for many when choosing a place to buy property. In light of recent events, citizens of Russia and Ukraine are also starting to show interest in purchasing apartments to obtain citizenship or residency permits.

People are seeking stability.

Ksenia Baldzha, the executive director of Liga Real Estate, adds that more and more people are looking for housing to establish permanent residency.

• People strive to find a "backup airfield" for their lives.

Growing interest from investors

This circumstance has also increased the number of investors in the market, as the high price growth has led to significant interest in new regions.

Housing type preferences

Regarding the most popular types of housing, Ksenia emphasizes that there is the highest demand for apartments with "1+1" and "2+1" layouts, as they are easy to resell and rent out.

• For permanent living, people are eager to choose apartments with layouts of "2+1", "3+1", and duplexes.

International buyers

Sergey Volchenkov also notes that foreigners typically choose housing for their own needs, paying attention to cities with developed infrastructure for permanent living.90%All transactions in the real estate market consist of apartments.

The impact of urban redevelopment on territorial development

In the modern world, transformations in urban construction have a significant impact on the development of various areas. In Turkey, the cost of land is quite high, which, in turn, leads to the active construction of multi-story buildings and skyscrapers.

The impact of innovations on obtaining citizenship

The question of how the increase in fees for obtaining a residence permit with the prospect of acquiring citizenship affects demand requires further clarification. Sergey Volchenkov emphasizes that there are many myths surrounding this topic. As of today, the minimum requirements for obtaining a temporary residence permit remain the same, and the approaches to issuance have not changed.

Conclusion

In conclusion, analyzing the current situation in the real estate market in Turkey, I have come to the conclusion that this segment is experiencing a real boom. The impressive figures reported by the Turkish Statistical Institute indicate a significant increase in both sales and housing prices. I note that the rate of price growth for apartments is simply astonishing: in some regions, such as Antalya and Istanbul, it exceeds 400%. The decline of the lira has created favorable conditions for foreign investors, which explains the increased number of transactions.

It is also important to consider how political and economic events, such as the military actions in Ukraine and changes in Turkey's legislation, have influenced consumer preferences. Against the backdrop of widespread inflation, investing in real estate is becoming not only a means of ensuring stability but also a way to preserve savings.

Interest of buyers

Currently, there is a noticeable interest from Russian and Ukrainian buyers, which makes Turkey particularly attractive for those looking for a new place to live or work. I also cannot help but mention that changes in legislation, such as new requirements for obtaining citizenship and residence permits, have spurred demand for real estate. These conditions make Turkey an ideal platform for investment.

Reasons for investing

• Economic growth:Increase in sales and rise in housing prices.
• Political stability:Turkey remains loyal to foreign citizens.
• Changes in legislation:New conditions for obtaining citizenship and residence permits.
• Climate and culture:Attractive living conditions in the country.

Taking into account all these factors, as well as the unique climate and cultural heritage of the country, I believe that investing in Turkish real estate is not just a financial decision, but also a step towards creating a new lifestyle. And despite the challenges faced by both locals and foreign investors, the market remains dynamic and open to new opportunities. If you are still unsure whether to invest in real estate in Turkey, I must emphasize: the best time to start is now.