DESPITE THE various economic and political challenges Turkey face, it seems foreigners are positive about the country’s future as they continue to invest in the property market.
This comes as housing sales to foreigners in Turkey increased by 78.30 percent in 2018, as compared to the previous year. According to the latest figures, houses sold to foreigners increased to 39,663 as compared to the 2017 figure of 22,234.
Iraqis, Iranians and Saudis are the leading nationals who have invested in houses in provinces outside Istanbul. The main reason for this increase is the struggle of the Turkish Lira against the US dollar.
Clear favoured areas are Istanbul, Antalya, Bursa, Ankara and Yalova provinces
Istanbul leads the favoured chart with 14,270 houses sold. Istanbul is then followed by Antalya with 7 938 houses, Bursa with 2720, Ankara 2133 and Yalova with 2 063.
Furthermore, the same figures show that sales in the Sakarya, Trabzon, Aydın and Mersin provinces can be ascribed to Istanbul as they also exceeded the 1 000 houses mark.
When it came to specific figures of foreign nationals buying, Iraqis came first with 8 205 houses bought. This equals to 20,7 out of the total sales while İranians rank second with 3 652 houses and Saudis are third with 2 718 houses. The Russians are in fourth place with 2297 houses, Kuwaitis are fifth with 2 199 and Afghans ranked sixth with 2 084.
Turkey takes measures to attract investments
Meanwhile, the Turkish government continues with measures to increase economic investment and shore up the Lira, which fell by 40% against US dollar this year due to jitters about President Tayyip Erdogan’s sway over monetary policy and a row with the US that has triggered reciprocal sanctions and trade curbs.
According to a new regulation made by the governing Justice and Development Party (AKP), foreigners can become citizens if they own property worth $250,000 for three years, down from a previous value set at $1 million, or if they hold $500,000 of Turkish debt for three years, down from a previous $3 million.
A slowdown in the housing market including lowering mortgage
The Turkish government introduced measures to tackle the slowdown in the housing market that includes lowering mortgage loan rates by state-lenders and discounts by well-known property construction firms.
According to the new rules, foreigners could qualify for Turkish citizenship if they meet the set criteria. The sharp reduction in the required foreign currency value applies to fixed capital investments and bank deposits, as well as for properties and bond holdings.
Lira slumps against major currencies
Mortgage sales have now declined by 79% as Turkey’s currency, Lira, slumps against major currencies, especially the US dollar.
The toing and froing of political parties, as the elections campaign has resumed, is also not helping economically. The other major factor has been the stand-off between Turkey and the US, largely caused by the ongoing Syria war.
The construction sector is among many in Turkey that have hit rock bottom as they experience slow growth. Now, economically-stricken Turks are highly cautious when investing in properties.
Uncertainty and vulnerability are estimated to rise in the sector. Houses sold through mortgages decreased by 79% in Turkey, compared to the same month of December of 2017. A total of 7148 residences were sold, according to the Turkish Statistical Institute (TUİK) figures as of December 31. The sales by mortgage occurred as 5,2% in total sales. İstanbul ranked first with 20,4 %, the other means 1 461 residences were sold in İstanbul in December 2018.
Construction sector shrinks in Turkey
On the other hand, the Turkish Statistical Institute has announced the Turkish economy grew by 1.6% in the third quarter of 2018. In the same period last year, the economic growth rate of the country was announced as 11,1% by the institute.
According to the latest figures announced by the institute, in the third quarter of 2018, the total value added by the construction sector has decreased by 5,3 % compared to the same last year’s the same period.
The charts also show that the final consumption expenditures of the state have also increased by 7,5% when compared to last year’s figures.