Iranians Biggest Foreign Buyers of Real Estate in Turkey

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

News ID: ۷۸۵۶۰۵

25 August 2020

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 2020, Iranians’ 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.

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 2,772 properties in Turkey, registering 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.

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 "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 industry, 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, which allows Iranians to enter the neighboring country without visa, and its positive attitude toward Iranians have encouraged Iranians to make more investment there compared with the citizens of 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 industry is still the number one destination of Iranian investments, thanks to the right to work and permanent residency its offers.

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

The Turquoise Card system creates 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 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.”

Flights Suspended Until September

Turkey has suspended all flights to Iran and Afghanistan until Sept. 1, despite its previous announcement that flights between the two countries for passengers who hold Turkish citizenship or permanent residency will resume on Aug. 4, secretary of the Association of Iranian Airlines, Maqsoud Asadi-Samani, told Fars News Agency.

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

IranAir, Meraj Airlines and Iran Airtour Airlines were scheduled to resume flights between the two countries last month after a four-month hiatus.

“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 adds extra cost and time. Qatar Airways does not operate direct flights between Iran and Turkey,” ILNA quoted Reza Jafarzadeh, the spokesperson of Iran Civil Aviation Organization, as saying.

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

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

“Airlines 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.”