Russians will accelerate sales of Turkish houses to foreigners to a record level in2022.

Russians tripled their number of real estate purchases in Turkey in2022, making them the main foreign buyers in the real estate market, triggering Western sanctions that hit their homeland due to the invasion of Ukraine.

"According to the Turkish Statistical Institute (TurkStat), Russians bought a record-breaking16,312 houses and topped the list of foreign buyers last year, displacing Iranians and Iraqis, who occupied second and third places respectively."

The data indicates a staggering203% annual growth and reflects how many Russians sought financial refuge in connection with Moscow's invasion of Ukraine and the consequences of Western sanctions..

Russian purchases accounted for almost a quarter of all sales to foreign buyers, which grew by15.2% year on year to reach a record67,490 units, according to the statistical agency.

While sales in2013 amounted to12,181 units.

Iranians purchased 8,223 homes last year, while Iraqis bought 6,241, according to the data.

Ukrainians who arrived to join their relatives, especially in the southern province of Antalya, also increased their purchases by 106.6% year-on-year to 2,574 units.

Among other citizens, Germans bought 2,705 houses, while Kazakhs bought 2,702.

Selman Ozygun, head of the construction firm Hellmann, spoke about the challenges faced in international trade and direct foreign investments last year, despite investors maintaining interest in Turkey, according to him.

Ozgün particularly emphasized that the interest of citizens from both countries has sharply increased after the Russo-Ukrainian war.

He said that Antalya stands out particularly and sees a 76.5% increase in home sales to foreign buyers compared to last year.

Sales of housing to foreign buyers accounted for 4.5% of total sales in Turkey in 2022, which is a slight decrease of 0.4% year-on-year to nearly 1.49 million homes.

Istanbul was the most popular place for foreigners to buyreal estate, with 24,953 homes sold.

Following her were Antalya, a popular vacation spot, with 21,860, and another southern province, Mersin, with 4,316.

Foreign buyers purchased 6,386 homes just in December, which is 18.6% less than a year ago, according to the data, accounting for 3.1% of total sales.

Russians once again topped the list of foreigners, purchasing 2,403 homes last month.

Nazmi Durbakayım, head of the Istanbul Builders Association (INDER), stated that sales to foreigners bring significant added value in the form of foreign currency inflow.

“We also hope that efforts will be made in 2023 to increase sales to foreign investors,” noted Durbakayim.

Meanwhile, total home sales in December fell by 8.2% year-on-year to 207,963 units.

The data also showed that mortgage sales decreased by 51.8% in December compared to the same period last year and by 4.8% overall for 2022, accounting for 18.9% of all sales for the year.

Istanbul had the highest share of sales in 2022, accounting for 17.5% or 259,654 units, followed by the capital Ankara (8.5%) and the Aegean province of Izmir (5.6%), according to the Turkish Statistical Institute.

The decline in overall sales occurred against the backdrop of reduced supply and rising prices, which again demonstrates how households continue to view real estate as an attractive investment tool for protection against inflation, which reached a 24-year high in October and then decreased over the past two months.

The annual inflation rate sharply decreased to 64.27% in December, down from 84.39% recorded in November 2022.

The decrease was mainly caused by the so-called favorable base effect and is the second consecutive decline after inflation peaked at 85.5% in October.

It is expected that the decline will become more pronounced in the first quarter of this year and may drop to 40% by mid-2023.

Last year, the government announced several measures to boost housing sales and address the issue of skyrocketing prices, which have more than doubled, as residents faced the challenge of finding affordable housing for rent or purchase.

The government has taken several measures to mitigate the effects of inflation, including capping rent increases and launching a large housing project for low-income families.

The chairman of Özyurtlar Holding, Tamer Özyurt, stated that the industry has left behind a year marked by prices that were very attractive to foreign investors, mainly due to the instability of exchange rates.

Özyurt said that foreign purchases supported the sector during the stagnation in the domestic market.

Özgün from Helmann expressed expectations that the interest of international investors in Turkish real estate will continue in 2023, and that Istanbul and Antalya will remain the most popular destinations.