As inflation surpasses an immense 70% in the country, Turkish citizens are turning to property as an inflation hedge. Understandably, people feel that their capital is safer in assets than in the bank, and domestic buyers are laying down their cash for residential real estate.
Demand is soaring across the entire residential market, with luxury properties particularly sought after. This is significant, as it means large cash investments are being deposited for high-priced properties. Coupled with the typical 50% down payment on mortgage loans, investment in Turkey’s luxury real estate is keeping the property market red hot and steering the country away from a housing bubble.
But can Turkey meet increasing demand? Due to supply chain issues caused by the pandemic, construction costs continue to climb, leading to limited supply in the market. As a result, the price for residential property has soared—with new builds, in particular, leading the charge.
The highest house price increase in Europe
In the Eurostat Housing Price Index, Turkey ranks first amongst European countries with a house price growth of over 400 percent from 2010 to 2021—that’s 10 times more than any other contender.
House prices have broken into the three-digit threshold, with growth exceeding 100% in the year to March; factoring in consumer price inflation, the real figure stands at around 30%, which is still very strong.
Moreover, a substantial proportion of Turkey’s construction materials are imported from the US and, although property sales are recorded in Turkish lira, house prices are unofficially tied to the U.S. dollar. With the USA’s currency strong, this is a reassurance for those interested in investing in Turkey’s real estate market.
An influx of foreign buyers
While the country’s current surge in demand is fuelled mostly by domestic buyers, Turkey has also seen an increase in interest from foreign investors.
Figures from TurkStat have revealed that sales to foreign buyers rose 58% y-o-y in April as the real estate market in Turkey attracts global attention.
Many foreign buyers are attracted by Turkey’s Golden Visa program. By purchasing a property with a value of $400,000 or more, overseas investors can acquire Turkish citizenship within 3-6 months.
Investors’ spouses and children under the age of 18 are also eligible for citizenship—and with it, visa-free access to over 100 EU countries.
The program also requires no minimum residence permit, which distinguishes it from other countries’ Golden Visa programs.
Alternatively, foreign investors may opt for Turkey’s Residence Permit where they can acquire citizenship for a lower investment price (of $250,000).
Demand for rental properties
In addition to property demand, the rental market also remains strong due to Turkey’s growing population and high visitor numbers. Its tourism industry is on the road to recovery following the pandemic, with the country a renowned tourist destination—famed for its ancient sites, cosmopolitan cities, and exquisite resorts along the Mediterranean coast.
Whether you’re interested in a holiday home, long-term investment or buy-to-let property, the real estate market in Turkey is definitely one to have on your radar.
Keen to invest in Turkey’s red-hot market? Contact us today to find your ideal property.