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Turkish overseas property purchases in decline

Global property markets have seen immense disruption during 2020 as a result of COVID-19. While most property markets have suffered during this period, property stats for Turkey have been exceptional during 2020.

The only sector of the Turkish property market which appears to be fluctuating, however, is the number of properties purchased amongst foreign buyers.

Although the majority of 2020 has seen a decline in overseas property purchases, July statistics began to show signs of strength.

This article discusses the ongoing state of the Turkish property market in 2020, as well as the future of overseas property purchases.

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The Turkish property market in 2020

On the whole, the Turkish property has been relatively stable during 2020 so far, with property sales up 23.5% in the first half of the year.

Turkey’s statistical authority announced that the first six months of 2020 saw a total of 624,769 residential property sales and 1,058,448, including commercial property.

As ever, Istanbul saw the majority of these sales, with 106,311 residential properties sold within the area during this period. Following behind was Ankara with 69,078 sales and Izmir with 39,331 sales.

June also began to see property sales within Turkey rapidly increase. The month saw 190,012 units sold, which was a 109.7% increase from June 2019.

Ahmet Erkurtoglu, the deputy head of the Contractors’ Association of Istanbul’s Anatolian Side stated that it is likely that 2020 will close with improved property sales in comparison to 2019.

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Turkish overseas property purchases in 2020

Whilst the Turkish property market has been strong on the whole; overseas property sales have certainly taken a hit.

Turkstat has confirmed that overseas property purchases fell by 24.7% during the first eight months of 2020 in comparison to the same period in 2019.

Erkurtoglu stated his surprise that China was within the top five foreign buyer countries for Turkish overseas property sales and is hopeful that Chinese demand will continue to remain healthy.

Out of the 624,769 properties purchased between January to June this year, just 14,262 of these came from foreign buyers. This figure is significantly down from 19,952 in the first half of 2019.

Once again, Istanbul was the most popular location for overseas property purchases with 6,902 sales. Antalya saw 2,708 purchases from foreign buyers during this period, and Ankara saw 964 sales.

The number one country for overseas property purchases in Turkey during this period was Iran with 2,628 properties sold. Iraq came in at number two, followed by China, Azerbaijan and then Russia.

Figures for June 2020 showed that foreign property purchases in Turkey dropped to 1,664, down from 2,689 the previous June.

However, it was July when things started looking up for the Turkish overseas property market, with sales increasing by 8% with 3,893 units sold.

Future of the Turkish property market

Agents have identified that the Turkish property market has perhaps performed better than most as a result of low-interest rates by public lenders. It’s forecast that if this trend continues, property purchases will continue to be on the rise.

One aspect that could threaten this progress is unfair price hikes being introduced by some homeowners. Nizameddin Aşa, president of the Istanbul Chamber of Real Estate Commissioners and Consultants, said that whilst demand soared following the announcement of low-interest rates, only 5% to 10% of demand resulted in sales as a result of these unreasonable price increases.

Atalay Demirbaş, CEO of Demand Grup Construction, believes that the Turkish property market could potentially see more sales in the next two months than what is usually seen in a year of low-interest rates continue and price hikes are prevented.

Though demand from foreign buyers dwindled during the first half of 2020, the fact that a slight increase occurred in July, suggests that demand could improve over the coming months.

This year Turkey also made it onto a list of 25 most profitable real estate investment markets for foreigners. Turkey made it to number 14, beating many popular destinations for foreign buyers such as Spain and Portugal.

The critical factor for the impressive ranking was down to Turkey’s thriving tourism market and affordable prices. As long as prices remain attractive and tourism continues to thrive, it’s expected that foreign demand will be on the rise.