Russians are at the forefront of the most nationalities buying real estate in Turkey

Russians are at the forefront of the most nationalities buying real estate in Turkey

Residential property sales in Turkey rose nearly 40% year-on-year in April, as the upward trend continued despite higher borrowing costs and higher prices.

The increase in residential real estate sales reflected the pace of interest from foreign buyers, especially Russians, who more than doubled their home purchases compared to last month, as they searched for a safe haven for their money.

According to the Turkish Statistical Institute, home sales rose by 38.8% in April to 133,058 units, compared to 95,863 units a year earlier, marking the highest monthly level ever. This rate came on the heels of the highest sales figure in March until Now, when it reached 134,170 housing units, an increase of 20.6% year on year.

Sales figures had started to rise remarkably on an annual basis in December, January and February, respectively, and the rise comes amid declining supply and rising prices, but families continue to view real estate as an attractive investment tool to protect themselves from inflation that reaches to its highest level in 20 years, at nearly 70%.

The Turkish government announced earlier this month several measures to boost home sales and tackle high prices that have jumped nearly 100% annually, as residents struggle to find affordable homes to rent or buy. Is real estate in Turkey really a safe haven for money?

The data showed that residential sales in April rose by 82.9% from the previous year to reach 32,030 housing units, which represents 24.1% of the total sales in this period.

Ziya Yilmaz, Chairman of the Board of Directors of Dab Holding Company, said, "It seems that everyone wants to invest in safe haven properties. They are right in this matter, because neither foreign currencies nor gold have made the investment as profitable as real estate," explaining that the increase in sales this year comes Although interest rates on housing loans exceed 1%, costs and prices are insanely high.

New loan package

For his part, Enang Qabadai, head of the "Ige Yapi" construction company, told local media that the growth momentum will continue because real estate is the most valuable means of protection against inflation. He stressed that the current demand supports expectations and that the measures recently revealed by the government will increase the speed of sales in the coming period.

President Recep Tayyip Erdogan announced last week that cheaper housing loans would be offered to those wishing to convert their foreign exchange savings into Turkish lira or sell their gold to the central bank for use in buying homes worth up to 2 million Turkish liras.

He explained that the interest rates on loans per month will be 0.89% with a maturity of up to 10 years, and that loans of up to 2 million Turkish liras will be provided at a monthly rate of 0.99% and maturities of 10 years for homeowners for the first time. Loans with maturities of 36 months will also be provided to contracting companies to complete some projects if they promise to keep selling prices unchanged for a year, with the aim of increasing the supply of housing and achieving price balance.

Russians are among the top buyers of nationalities

Russians top the list for the first time Turkish Statistical Institute figures indicate that home sales to foreigners rose 58.1% year on year last month and reached 6,447 housing units.

Russian citizens topped the list among countries in April for the first time ever, boosting their purchases by 186.6% year on year to 1,152 homes from 547 homes in March. Iranians followed with 905 homes, and Iraqis with 714.

Many real estate companies say wealthy Russians are pouring money into real estate in Turkey and the United Arab Emirates, seeking financial sanctuary in the wake of Moscow's invasion of Ukraine and stifling Western sanctions. Many Ukrainians fleeing the war have also chosen to rent or buy property, which has accelerated Residential purchases reached 263 homes in April, an increase of nearly 186% from 92 homes a year earlier.

"After the war, the interest of Ukrainians in real estate increased and was no longer confined to Russians only," said Salman Ozgun, head of the Helman Yapi construction company, noting that this increase can be seen clearly in Antalya, a favorite holiday destination for both Russians and Ukrainians.

While Turkey and UAE have criticized the Russian invasion, Ankara opposes the sanctions imposed on Russia, as both countries have relatively good relations with Moscow, and the two countries still operate direct flights to it. It is noteworthy that the depreciation of the Turkish lira contributed to an increase in real estate sales in Turkey. And making it more attractive to foreign buyers, as the authorities pursued a new economic policy of low interest rates aimed at boosting credit, exports and investments, the Central Bank of Turkey cut the benchmark interest rate by 500 points since September to 14%.