Iran's Trade With Turkey at $1.4b

EghtesadOnline: Iran’s trade with Turkey totaled $1.39 billion during the first seven months of 2020 (January-July) to register a decrease of 67% compared with the corresponding period of 2019, latest data released by Turkish Statistical Institute show.

News ID: ۷۵۰۸۹۰

05 September 2020

Iran exported $509.31 million worth of goods to Turkey during the period to register an 81.95% year-on-year drop. This is while imports stood at $877.9 million, down 37.06% YOY.

Bilateral trade amounted to $318 million in July to register a mild decrease of 0.54% compared to July 2019. Exports to Turkey accounted for $91.81 million of the figure, down 10.66% YOY, while Turkey’s exports to Iran stood at $226.19 million, up by 4.26% YOY.

The huge decline in bilateral trade comes, as the two countries have been hit hard by the new coronavirus pandemic since early 2020. However, the trend seems to be reversing in the past two months.

Iran-Turkey’s monthly trade had fallen to under $100 million in the past few months.

However, the Turkish Statistical Institute’s report shows bilateral trade in July reached $318 million to register a 19.26% rise compared to June.

Iran’s exports to Turkey in July increased by $6 million or 6.99% month-on-month, and its imports from Turkey increased by $43.35 million or 25.08% in July compared to June.

In a similar trend, June’s trade ($266.66 million) saw a 210.91% jump compared to May. Iran’s exports to Turkey increased by $43.47 million or 102.67% month-on-month, and its imports from Turkey increased by $137.7 million or 316.11% in June compared to May.

Biggest Foreign Buyers of Real Estate in Turkey

Having purchased 3,168 homes in Turkey, Iranians were the biggest foreign buyers of real estate in the neighboring country during the first seven months of 2020, figures released by the Turkish Statistical Institute show.

According to the report, Iranians were followed by Iraqis with 2,747 house purchases, Russians with 1,081, Afghans with 955, Germany with 559 and Azerbaijanis with 546, according to Turkstat.gov.tr.

Over January-July, Iranian’s home purchases in the neighboring country declined by 22.18% compared with last year’s corresponding period.

Foreigners bought a total of 17,185 homes in Turkey over the seven-month period, registering a 29.52% drop compared with the similar period of last year.

The decline is attributed to the outbreak of the coronavirus pandemic.

Out of the total sum, 7,948 homes were located in Istanbul, 3,323 in Antalya, 1,194 in Ankara, 524 in Bursa and 520 in Yalova.

In July alone, foreigners purchased a total of 2,772 real estates in Turkey, showing a 34.63% fall YOY. Iranians, Iraqis and Russians accounted for 540, 388, and 154 of the purchased homes respectively.

Around 854,126 real-estate deals were made in Turkey during the seven-month period, indicating a 40.5% growth compared with the same period of last year. House sales increased by 124.3% last month compared with July 2019 to reach 229,357.

In 2019, Iranians were the second biggest foreign buyers of real estate in Turkey with 5,423 home purchases while Iraqis with 7,596 deals were the biggest foreign buyers of homes in Turkey last year.

Iranians were followed by Russians with 2,893 purchases, Afghans with 2,191 and Yemenis with 1,564.

Foreigners bought a total of 45,483 homes in Turkey in 2019, registering a 14.7% rise compared with 2018.

Out of the total sum, 20,857 homes were located in Istanbul, 8,951 in Antalya, 2,539 in Ankara, 2,213 in Bursa and 1,696 in Yalova.

Capital Flight

After the "Turkuaz Kart" (Turquoise Card), a practice similar to the US Green Card application, was launched in 2016, it became possible to get Turkish citizenship by investing in the country as of 2017.

In September 2018, the lowering of the minimum investment limit in the Citizenship Through Investment Program to $250,000 in real-estate investments led to an increase in foreigners' interest in the country.

While a significant portion of FDI in Turkey has been made in the real-estate sector, there has also been a remarkable increase in indirect capital investment in recent times.

Reza Kami, a member of Tabriz Chamber of Commerce, says Turkey’s policy of granting the right to work and residence to foreigners via investment, the fact that Iranians can enter the neighboring country without visa and on top of that its positive attitude toward Iranians have given rise to Iranians’ making more investment there compared with the UAE, Cyprus and Georgia.

The foreign commerce sector of Turkey has also been attractive for Iranians over the past couple of years. By registering their businesses there, Iranian investors have secured an acceptable status in the neighboring country.

However, the real-estate sector is still the number one destination of Iranian investments.

Ali Farnam, an expert in housing and urban development, says when it comes to Turkey, it is more of capital flight than the outflow of capital with the purpose of investment in real estate.

The Turquoise Card system creates a long-term stability for investors. They can leave behind the uncertainties of Iran’s local market and invest in a country with lower risks.

Referring to financial transactions with Turkey, Farnam said, “Turkey gives Iranians the opportunity to pay property expenses in the rial. Interestingly, home prices in Turkey are lower than in Iran. The country’s transportation system, its tourist attractions and the ease of travelling from Turkey to other countries add to the appeal of investment there.”

Turkey Suspends Iran Flights Yet Again

Turkey, however, has once again put off resumption of Iran flights to October 2, according to Touraj Dehqani Zanganeh, the head of Iran Civil Aviation Organization.

“We are trying to resume these flights with the help of the Ministry of Foreign Affairs and other related offices,” he was quoted as saying by Azad News Agency.

Previously, Turkish Airlines had announced it would operate flights to five Iranian cities as of Sept. 1 for passengers who hold Turkish citizenship or permanent residency on Sept. 1.

On July 19, Turkey cancelled flight permits to and from Iran due the coronavirus pandemic.

“As we speak, passengers wanting to travel from Iran to Turkey have to take Qatar Airways flights to Doha and then take another plane to their final destination. That will add extra cost and time. Qatar Airways does not operate direct flights between Iran and Turkey,” ILNA quoted Reza Jafarzadeh, the spokesperson of the Civil Aviation Organization of Iran, as saying recently.

Earlier, Jafarzadeh said Turkey has not reopened its borders for Iranian tourists, as only Turkish citizens and those who hold work visas are allowed to travel to that country.

“Therefore, selling tour, transportation and accommodation services to the public before normal flights resume is unlawful,” he was quoted as saying by Mehr News Agency.

“Airlines must have control over ticket sales. They are only allowed to sell tickets after securing flight permits to foreign countries. Passengers are also advised to check the flight status at www.cao.ir before buying tickets.”