Is Turkey a Right Adress For Real Estate?
At the present time, given the instability of the geopolitical situation and fluctuations in the global currency exchanges, investors are faced with a choice – where is it better to invest? The most effective tools are investing in real estate, securities and bank deposits. These methods are rightfully considered traditional: they allow you to save money both in times of crisis and in calm times.
Now investing in real estate in order to preserve capital has become more popular than stocks and government bonds. Buying commercial real estate and housing and then reselling or renting it out is a winning investment strategy at any time. The current financial conditions of Turkey as a country have created a favorable environment for buyers from almost all countries.
The main characteristic that unites investments in real estate is the possibility of passive income and placement of capital at any time, regardless of the season, political and economic situation. Any situation on the market allows the investor not only to maximize the reliability, but also to profitably increase funds. Buying real estate in Turkey now, the investor receives a reliable financial guarantee and the possibility of earning income in the future. The real estate market is not as volatile as the securities market: there is no principle of waiting for the best price as you need to buy here and now. In the most popular areas for buying, prices do not fall due to growing demand, therefore, the value of housing and income will increase in the future.
It can be noted that in recent years, the national currency of Turkey went lower against the dollar. Property prices increased both in lira and in dollars and euros, but this did not affect the activity of developers and investors: for example, in 2020, despite quarantine restrictions around the world, foreigners purchased 41,000 properties, spending more than $ 7 billion. According to statistics, overall demand decreased by 11% compared to 2019, but for Iranians on the contrary, increased. Their number almost doubled in comparison to the same period of the previous year. The growth in segment activity stimulated the launch of new projects on the market. It also influenced the development of the internal infrastructure of residential complexes – additional social areas began to appear (fitness rooms, co-working spaces, cafes, venues for holding events on the territory).
In 2021, foreigners purchased a worth of 68,600 properties, including 64,500 homes and 4,000 plots of land, the total amount of investments exceeded 40 billion Turkish liras.
In the first half of 2022, Antalya bypassed Istanbul, which remained the leader for several years. The bulk of buyers are Russians (6877 properties), followed by citizens of Iran (5315 properties) and Iraqi (4405 properties). In July alone, foreigners purchased 1,421 properties in Antalya (30.6% of the total number of transactions). For comparison, only 1154 objects were sold in Istanbul.
Real estate abroad is acquired mainly for obtaining a residence permit and citizenship. The activity of passport programs offered by foreign countries has become an additional reason for investors’ interest in foreign properties. The most popular destinations among investors from around the world are Turkey, southern Europe and the Caribbean. The majority of buyers have assets exceeding $30 million (in Turkey, the average budget of transactions has increased by a million dollars). According to the Knight Frank agency, increased interest was also noted in commercial real estate abroad, which also allows you to apply for a residence permit or obtain citizenship.
The pent-up demand during the pandemic has led to increased purchases of foreign residential assets in Greece, the UK and Cyprus. But it is worth considering the rise in the cost of properties in European countries and the strict requirements for the terms of transactions, competition with citizens of other countries and the minimum threshold for obtaining a permanent residence permit. For example, to obtain a residence permit in Spain, you need to purchase real estate worth at least 500 thousand euros, in Portugal – from 280 thousand, and in the UK a residence permit is issued for investing in the country’s economy from 2,000,000 pounds. A residence permit in Turkey is provided already with the purchase of real estate from $75,000 of cadastral value.
If we consider the conditions for obtaining citizenship, then in the UAE (another popular investment destination for foreigners), it can only be obtained in exceptional cases. You can become a citizen of Malta by investing from 690,000 euros. The conditions of the Dominican Republic, at first glance, are very attractive – only $ 100,000, but one should take into account the high cost of flights and the low standard of living in the state.
How to get Turkish citizenship? The country is ready to accept an investor who has invested $400,000 immediately after the deal is closed. Having obtained citizenship, the investor becomes a full member of Turkish society, can receive state medical and social services and education in state educational institutions. A Turkish passport allows you to visit 110 countries without a visa, get a Schengen visa for up to 5 years, B-1 / B-2 and E-2 visas in the USA. The investor can retain the citizenship of origin (not renounce other citizenships) and obtain a Turkish passport for the spouse and children under 18 years of age.
The Turkish real estate market is undergoing a transformation. Turkey apartments and houses, which you can rent out or live in, are in great demand. For investors, the availability of infrastructure is important – in this case, Turkey is in a more advantageous position than, say, the Dominican Republic. The quality of construction is also worth noting: high state requirements and engineering standards force developers to be sensitive to the quality of housing. Interior finishing is made using natural materials, the selling price of units includes kitchen and bathroom sets (at the construction stage, the buyer can make changes to the layout or interior, creating housing literally according to an individual project). Modern Turkish real estate also implies a closed house territory, landscaping and parking, which, for example, in other countries can only be found in residential complexes of business class and above.
