Istanbul Last year, Türkiye witnessed a remarkable decrease in real estate sales to foreigners, opening the door for questions about the reasons that prompted one of the most prominent sectors of the Turkish economy to this decline.
While cities like Istanbul, Antalya, Missen are still main and major parties, global economic challenges have affected foreign buyers’ options.
On the other hand, Arab investments, especially from the Gulf states, are highlighted as an element that may carry a key to reactivating the real estate market, amid aspirations to compensate for this decrease and restore momentum in the sector.
General performance
The real estate market in Turkey witnessed a remarkable performance, as total sales increased by 20.6% compared to the previous year, recording a million and 478 thousand and 25 housing units, according to the statistics of the Turkish Statistical Institute.
This growth is driven by a noticeable increase during the period from January to November 16.4%, reflecting the continuity of demand in the real estate market despite the increasing economic challenges. Here is the most prominent cities that were best -selling for real estate:
- Istanbul topped the most attractive cities for buyers at 239 thousand and 213 units.
- Ankara came second with 134,46 units.
- Then Izmir is 80,398 units.
- While small cities such as Arman, Hakari, and Paport were recorded with the lowest numbers, with a total sales that did not exceed 2752 units.
December 2024 was characterized by strong performance, as real estate sales amounted to 212 thousand and 637 housing units, recording a significant increase of 53.4% compared to the same month of the previous year.
In terms of sales type:
- New real estate sales during the past year reached 484,461 units, an increase of 27.6% over the previous year.
- As for the real estate used, it acquired the largest share of sales, as it reached 993 thousand and 564 units, an increase of 17.4% over the previous year, to constitute 67.2% of the total sales.
- Regarding the mortgaged sales, in 2024, a decrease annually witnessed 10.8% to reach 158 thousand and 486 units only, despite achieving a big leap during last December, an increase of 285.3% compared to the same month of the previous year.
- As for the unsuccessful sales, it achieved remarkable growth of 25.9% during the past year, recording a million and 319 thousand and 539 housing units, reflecting the increasing role of real estate development companies in providing attractive financing options for buyers.
Foreign buyers
Real estate sales for foreigners in Turkey during the year 2024 witnessed a significant decline of 32.1% compared to 2023, to record only 23 thousand and 781 housing units, according to the statistics of the Turkish Statistical Institute.
The real estate sales share for foreigners has decreased from the total real estate market in Türkiye in a rapidly in recent years. In 2022, sales share for foreigners reached 4.5% of the total market, but it decreased to 2.9% in 2023, to continue its decrease in 2024 to a small percentage of only 1.6%.
At the cities level, Istanbul maintained the top of the most attractive cities for foreign investors with 8 thousand and 416 housing units, followed by Antalya with 8 thousand and 223 housing units, then Mersin with 2112 housing units.
As for nationalities:
- The Russians topped the list of foreign buyers by buying 4,867 housing units.
- The Iranians followed by 2,166 housing units.
- Then the Ukrainians with 1631 housing units.
Despite the significant decrease throughout the year, December 2024 witnessed a relative recovery in foreign sales, 2418 housing units were sold, an increase of 17.2% compared to the same month of the previous year. Nevertheless, these sales represented only 1.1% of total monthly sales.
Arab purchases
The Arab real estate purchases in Turkey witnessed a remarkable decline compared to 2023, according to the data of the Turkish Statistical Institute, which was reflected in the arrangement of some Arab countries in the list of the most purchased real estate countries.
For example:
- Iraq, which was ranked third in 2023 after Russia and Iran, decreased to fourth in 2024, as Iraqis purchases decreased from 1917 housing units to 1302 units, with a decline of about 32%.
- As for Saudi Arabia, it recorded a sharp decrease in purchases, from 810 units in 2023 to only 344 units in 2024, with a decline of about 57.5%, which led to a decrease in their arrangement among the most purchasing countries for real estate. In the same context, Kuwaiti purchases decreased from 822 units to 473 units, with a decline of 42.5%.
- At the level of Jordanians, purchases decreased from 384 units in 2023 to 195 units in 2024, with a decline of 49.2%. As for the Palestinians, they also witnessed a decrease from 333 units to 222 units, with a decline of about 33.3%.
Reasons for decline
Economic analyst Mustafa Akoch considered that the decline in real estate sales for foreigners in Turkey during the year 2024 is the result of a group of interconnected factors that reflect the dynamics of the local market and legislative and economic changes globally.
He explained to Al -Jazeera Net that the significant increase in real estate prices in recent years, driven by the costs of construction and inflation, made the market less competitive against foreign investors, especially the Arabs who were an important segment of buyers.
Akoch pointed out that the legal amendments related to nationality and real estate residency were one of the main factors that reshaped the map of foreign demand. The Turkish authorities raised the minimum value of real estate eligible to obtain citizenship to a value of 400 thousand dollars, and for real estate residency to 200 thousand dollars, which weakened the ability of investors with medium budgets to enter the market, and make investment in Turkey a less attractive option compared to countries that provide privileges Similar to lower costs.
On the economic side, Akoch explained that the high interest rates, which settled at 50% for 8 months before they decreased to 47.5%, prompted investors, including foreigners, to transfer their capital to banks instead of real estate, to take advantage of guaranteed and high returns without risks to remember.
He also touched on the impact of negative propaganda on racism towards foreigners, which specifically targeted Arab investors, and saw that they contributed to raising the concerns of some investors about the social environment for investment.
Akoch concluded his speech, stressing that the decline in real estate sales to foreigners is a natural reflection of the intertwining of these factors, calling for the reformulation of economic and legislative policies to increase the attractiveness of the Turkish market, especially in light of the strong competition from real estate markets in the region and the world.
