Balance Valuation Chairman of the Board of Directors Baki Budakoğlu said that with the increase in the real estate value to be taken for application for Turkish citizenship from 250 thousand dollars to 400 thousand dollars, higher profile investors will come to Turkey and the luxury housing market will become active.
The legal regulation allowing foreigners to acquire real estate from Turkey entered into force in 2012 and with this law, those who invested 1 million USD in Turkey were given the opportunity to become Turkish citizens. As a result of the regulation made in 2018, the investment amount required for Turkish citizenship was re-determined as 250 thousand USD, and from this point on, house sales to foreign citizens gained a serious momentum.
According to TUIK data, while the number of residences sold to foreign citizens in Turkey was 2017 in 22.234, after the amount was reduced to 250 thousand USD, Turkey became the focus of attention of foreign investors and a total of 2021 sales were made in 58.576. At the Cabinet Meeting dated 13.04.2022, it was decided to increase the required investment amount from 250 thousand dollars to 400 thousand dollars in order to obtain Turkish citizenship.
Rapid increases in real estate prices
Baki Budakoğlu, Chairman of the Board of Denge Değerleme, evaluating the issue said, “Although there is no legal change yet, this change is expected to come into effect by being published in the Official Gazette in the coming days. After the change, if the real estate or real estates worth at least 400 thousand USD are not sold for 3 years, those who fulfill the conditions will be able to acquire Turkish citizenship. To interpret this change in terms of its possible effects on the real estate market; In the period when the amount of 2018 thousand USD was determined in 250, we can say that there was a surplus of housing stock throughout Turkey, especially in Istanbul, and in the following years, as a result of the slowdown in the amount of housing production and the demand of domestic and foreign investors, the surplus of housing stock melted and real estate prices increased rapidly. said.
Istanbul is relatively affordable compared to equivalent cities around the world.
Budakoğlu stated that 2018 thousand USD is a very high amount in terms of purchasing power in the market conditions where the housing stock was at a record level in 250. It is seen that these amounts are starting to be seen as a reasonable level in the luxury housing segment in holiday resorts such as. As a Balance, within the scope of our study that we carried out in 2021 comparing world metropolises, we prepared an index based on 50 important cities around the world, based on luxury residences in city centers with the same investment amount, appealing to the high-income group, and examined how many square meters of housing can be purchased in which city. In our study, when we examined the world's 50 leading big cities, we revealed that Istanbul is in the 45th place and although the housing prices for Turkish citizens are high, we have reached the conclusion that Istanbul is relatively affordable when evaluated over the purchasing power of foreign investors. ” he said.
Higher profile investor expected to come to Turkey
Budakoğlu pointed out that since 2021, when this research report was prepared, real estate prices have increased considerably throughout Turkey, especially in Istanbul, and said, “When we look at today's current prices, real estate prices in our country are still reasonable compared to the purchasing power of foreign investors. With this arrangement, it would be appropriate to say that after the amount required for citizenship reaches 400 thousand USD, a higher profile investor will come to our country.” said.
Russian investors turned their route to Turkey
Referring to the effects of the Russia-Ukraine war, Denge Valuation Board Chairman Baki Budakoğlu said, “We know that Russian investors have started to turn to Turkey in order to obtain citizenship, especially after the sanctions were imposed on Russia with the Russia-Ukraine war. It is a well-known fact that Russian investors generally have more purchasing power compared to Middle Eastern investors. Since it is also known that the real estate prices in Turkey are affordable compared to the world scale, we can say that as a result of all these, our country will become a little more selective in terms of investor profile in the future and investors with a higher profile and high purchasing power will be attracted.” said.
The luxury housing market will move
Budakoğlu stated that they think that with the increase in the investment amount, the demand of the investors will turn to luxury residences, the luxury housing market will become more active and the value increase in the luxury housing market will accelerate: We foresee that the number of investments may decrease, but the total investment value entering our country from these sales will reach equivalent levels compared to the period in which the 250.000 USD rule was applied, or even pass as an amount in the medium term, that is, the market will reach equilibrium by selling lesser but higher-priced houses.”
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