Real estate trends shift as Turks now buy property abroad

Duvar English

In the January-September 2024 period, Turkish investments in foreign real estate increased by 14.7% in dollar terms compared to the same period last year, while foreign investments in real estate in Turkey decreased by 23.8% during the same period.

In his article focusing on real estate trends, Dünya newspaper columnist Naki Bakır stated, "While foreign exchange revenue from sales to foreigners is rapidly decreasing in Turkey, the volume of foreign currency that Turks are transferring abroad for purchases is steadily increasing."

With the impact of granting citizenship in return, real estate purchases by foreigners, which have rapidly grown over the last decade and become a significant income item in Turkey's current account balance, have experienced a major slowdown. 

In the first nine months of this year, the foreign currency that Turks transferred abroad for real estate acquisition has approached the amount brought by foreigners for the same purpose.

According to the latest balance of payments data released by the Central Bank, in the January-September period, the foreign currency spent by Turks on real estate acquisitions abroad increased from 1.33 billion dollars in the first nine months of 2023, when the upward trend began, to 1.53 billion dollars.

When converted using the Central Bank's average dollar exchange rate, the money transferred by Turks for real estate purchases abroad has approached 50 billion dollars.

Foreign real estate investments in Turkey decreased to 2.19 billion dollars during the January-September period. As a result, the foreign currency sent abroad for real estate purchases reached approximately 70% of the amount brought into the country for the same purpose. In the same period last year, this ratio was at 46%.

In 2023, after subtracting the capital sent abroad by Turks for real estate purchases from the foreign currency brought into Turkey for the same purpose, the net inflow in this area amounted to 1.54 billion dollars. This year, the net inflow decreased by 57%, dropping to 662 million dollars.

As of the end of September, foreigners purchased 2.88 billion dollars worth of real estate in Turkey, while Turks' purchases abroad reached 1.98 billion dollars. On an annual basis, the net inflow in reciprocal real estate investments amounted to 900 million dollars.

Why Turks buy property abroad?

According to the journalist, the majority of Turks buying real estate abroad have been from the new affluent class that emerged due to income distribution disparities. This group consists of "investor" type buyers as well as individuals seeking to settle abroad long-term for their children's education and careers.

The trend has further increased due to the economic crises in the United States and Europe, which led to real estate prices decreasing to relatively affordable levels.

The journalist stated, "One of the main factors driving affluent individuals to purchase property abroad is the fact that rental income in foreign countries is increasing at a much faster rate than the sales price of real estate. The advantage of earning rental income in dollars while spending in Turkey makes purchasing property abroad attractive. Meanwhile, the growing visa issues faced by Turkish citizens are also pushing them towards buying real estate abroad, as it offers opportunities such as residence permits and dual citizenship."