Turkey maintains its status as the fastest-growing global real estate market, showcasing resilience even amid a cooling period and the ongoing conflict in the Middle East.
The Turkish Statistical Institute (TurkStat) reports a 9.5% decrease in property sales in September compared to the previous year, with a more pronounced 16.4% drop from August. While mortgage purchases, a significant market component, experienced a 50% reduction from August and a 38% annual decrease, cash transactions, representing the majority, saw a relatively modest 11% year-over-year dip.
This slowdown followed a substantial surge in house prices, soaring by an impressive 96% by the end of June, outpacing the global average of 3-4%, according to data from Knight Frank, a residential property consultancy. Simultaneously, Turkey’s central bank implemented a significant shift in monetary policy, raising target rates from 8.5% in June to a robust 35% in October to tackle persistent inflationary pressures.
Despite these challenges, Turkey’s real estate market remains robust, with asking prices holding relatively steady in US dollar terms, even amidst the devaluation of the Turkish lira. Online property search platform Housearch.com asserts that Turkey continues to attract property investors, projecting an anticipated cumulative average annual growth rate of 8% leading up to 2027.
The annual decline in property sales to foreign buyers in 2023 is attributed to the “high base effect” of 2022, a record year with 67,490 homes sold to foreigners.
While recent Middle East conflicts have raised concerns, Turkey’s criticism of Israel has not deterred investors, and the region’s growing instability may even fuel increased demand, mirroring the surge observed during the 2017-2018 conflict with ISIS. This period witnessed affluent migrants relocating to Turkey, resulting in a doubling of annual property sales to foreign buyers.
