Real estate is one of the most significant drivers of the Turkish economy and will continue to be in the future. Currently, the real estate sector in Turkey represents 19.5% of the gross domestic product, which brings significant investment potential for the sector.
Starting from 2012, the Turkish real estate sector witnessed a huge boom in real estate market activity following the structural changes made by the Turkish government to allow citizens of 183 countries to buy real estate inside Turkey in order to attract more foreign buyers. This was reflected in the definition of the real estate sector itself where wide prospects for investment in Turkey opened up!
Following these measures, foreign investors have come to Turkey to own properties, taking a large share of total purchases, and increasing real estate sales five times between 2012 and 2015.
The Turkish real estate market witnessed a large number of Arab clients from the GCC region between 2013 and 2016. Soon after, and for the past three years, the market started attracting many clients from China and South Africa. Now, many Pakistani nationals are choosing Turkey as their new home.
In 2017, the Turkish government issued a new law allowing foreigners who purchase property at a value of 1,000,000 USD to obtain the Turkish nationality. Shortly after, the government reduced the necessary value of the property into 250K USD to obtain the Turkish passport. This contributed to a massive surge in the number of buyers and people looking to call Turkey their new home, especially in Turkey’s economic capital, Istanbul.
According to data issued by the CBRT (Central Bank of the Republic of Turkey), in January 2010, the house price index in Turkey stood at 45.4, and by September 2020 it had risen to 146.7. The data revealed that the house prices in Turkey increased three-fold, while houses in developed countries only witnessed a 50% increase in prices during the same period.
The demand drivers of the Turkish real estate sector such as the country’s crossroads geographical location, urban renewal and development projects, strength in the construction sector, and demographic advantages support the Turkish real estate market and will continue to do so in the future.
With the Covid -19 pandemic taking the world’s economies by storm, the real estate market in Turkey is expected to be affected by the restrictions. New development projects are expected to be less than usual causing the demand and consequently the prices to increase. It is then advised that those intending to buy property in Turkey start the process as soon as possible to take advantage of the current state of the real estate market in Turkey.