Top property buyers in Turkey are Russians, record sales in April

Sales of residential real estate in Turkey rose nearly 40 percent in April from a year earlier, official data showed Tuesday. The upward trend continues despite high borrowing costs and sharp price increases.

The growth was also driven by interest from foreign buyers, especially Russians, who more than doubled their home purchases from a month ago as they seek financial refuge. Home sales rose 38.8 percent in April to 133,058 units, the highest in a month, the Turkish Statistical Institute (TurkStat) said. This follows a March record when sales reached 134,170, a 20.6% increase from a year earlier. Sales on an annualized basis''increased by 113.7%, 25.1% and 20% in December, January and February respectively.

The growth comes amid tightening supply and rising prices, but households continue to see real estate as an attractive investment vehicle that protects them from inflation, which has hit a 20-year high of nearly 70%. The government earlier this month announced several measures to boost home sales and cope with soaring prices, which are rising by nearly 100% annually, as residents struggle to find affordable homes to rent or buy.

The construction index in March rose 102% year-on-year, according to TurkStat. The residential real estate price index also rose 96% at an annualized rate in February,''showed data from the Central Bank. In Istanbul, the index rose 106% year-on-year.

The data showed that home mortgage sales in April rose 82.9 percent year-on-year to 32,030, accounting for 24.1 percent of total sales in the period. "It seems like everyone wants to invest in '\''safe haven'\'' real estate," said the chairman of Dap Holding. "They are right because neither foreign exchange nor gold has proven to be as lucrative an investment as real estate," he added.

The increase in sales this year comes despite mortgage interest rates exceeding 1 percent and prices rising, Yılmaz said. Istanbul, Turkey's largest city by population, had the highest share at 19.8 percent, or 26,330 home sales last''month. It was followed by the capital Ankara with 12,195 sales and the Aegean province of Izmir with 8,459, respectively, up 9.2% and 6.4% respectively.

Sales from January to April rose 26.2% to 453,121 homes despite high loan costs. The positive growth trend will continue because real estate is the most valuable hedge against inflation, Chairman Ege Yapı said. Current demand supports expectations, Kabaday added, noting that measures recently announced by the government will add momentum to sales in the future period.

In a program announced by President Recep Tayyip Erdoğan last week, cheap housing loans will be provided to those who convert their savings into''be provided to construction companies to complete certain projects if they promise to keep selling prices unchanged for a year. Erdogan said the loan program for construction companies is aimed at increasing the supply of housing, which will lead to a balance in prices.

Sales to foreigners rose 58.1 percent year-on-year last month to 6,447 units, TurkStat said. Russians topped the list among nations for the first time in April, increasing their purchases by 186.6% year-on-year to 1,152 homes against 547 in March. They were followed by Iranians with 905 and Iraqis with 714. Wealthy Russians are investing in real estate in Turkey and the United Arab Emirates (UAE), seeking financial refuge in the wake of Moscow's invasion of Ukraine and stifling''by Western sanctions, many real estate companies report.