Wealthy Russians pour money into real estate in Turkey

Turkish home sales surged 107.5% in May over last year to 122,768 houses, data from the Turkish Statistical Institute showed on Wednesday, with Russians topping foreign buyers for a second consecutive month.

Sales to foreigners jumped 235.7% year-on-year to 5,962 units, the institute said, as they sought to take advantage of a government schemed that awards Turkish citizenship to those who who buy homes.

Sector officials said sales to foreigners surged before a law raising the scheme’s minimum purchase value to $400,000 from $250,000 went into effect this week.

Gul Gul, founder of real estate sale company Golden Sign, said foreigners piled into the real estate market after the measure was announced last month.

“Foreigners made intense purchases so as not to be affected by the price increase,” she said.

Russian citizens topped the list again in May with 1,275 houses, from 1,152 in April. They were followed by Iranians and Iraqis. Russians and Ukrainians made up for more than 25% of the sales to foreigners, according to the data.

Wealthy Russians are pouring money into real estate in Turkey and the United Arab Emirates, seeking a financial haven in the wake of Moscow’s invasion of Ukraine and Western sanctions, many property companies say.

Makbule Yonel Maya, general manager of TSKB Real Estate Appraisal, said aside from the higher limit for citizenship, sales to foreigners had also risen due to the higher demand from Russians after the Ukraine conflict broke out.

Sales to foreigners also bring foreign currencies into Turkey’s economy, helping support the lira as it remains under selling pressure.

Sector officials estimate that $10 billion were brought into the economy in 2021 thanks to house sales to foreigners, with sales standing at 58,576 units.

Separately, the data also showed May mortgaged sales rose 177.8% from a year earlier to 29,335, accounting for 23.9% of the total sales in the period.