As Turkish Lira Depreciates Many Foreign Rushed To Buy A Home In Turkey
FOREIGNER HOUSE SALE REACHED 9,992 UNITS IN THE FIRST 3 MONTHS
In March 2021, with the rise in US Treasury bond rates and the dismissal of Turkish Central Bank President, the TL fell sharply, foreigners rushed to Turkey to buy housing. A record was broken in March with the sale of 4,285 homes to foreigners. Total sales reached 9,992 units in the first 3 months of 2021.
Turkish Statistical Institute (TurkStat) announced the data on home sales. According to TurkStat data, a total of 4 thousand 285 houses were sold to foreigners in March, and the record was broken in the sale of houses to foreigners in March.
With this data, total house sales to foreigners in the first 3 months of 2021 reached 9,992 units. In January February 2021, 2,712 houses were sold to foreigners and 2,995 houses were sold in February.
HIGHEST INCREASE IN SUDANESE CITIZENS
Based on their nationality, Sudanese citizens increased the number of homes they received in March by 62 percent compared to the previous month, from 35 to 57. Sudanese were followed by Russians, who increased the number of homes they took from February by 61 percent from 259 to 419, and Ukrainians, who increased by 55 percent from 60 to 93.
In March, Iranian citizens took the first place by purchasing 663 houses from Turkey, followed by Iranian citizens in Iraq with 644 houses, the Russian Federation with 419 houses, Afghanistan with 302 houses and Kazakhstan with 166 houses, respectively
IMPACT OF DEPRECIATING TURKISH LIRA
The depreciation of the Turkish lira was instrumental in the record-breaking of home sales to foreigners in March. The dollar/TL, which fell below US $ 7 in March thanks to the strict monetary policies implemented by former Central Bank President Naci Agbal, who was dismissed by President Erdogan, began to rise again with the rise of US Treasury rates and approached the level of 8.
Agbal, who raised his policy interest by 200 basis points above market expectations on March 18, was dismissed by President Erdogan on March 20. Agbal's dismissal had a shock effect on the markets, with the dollar/TL rising as high as 8.48.
TURKISH ASSETS CHEAPER DUE TO EXCHANGE RATE DIFFERENCE
It would not be wrong to link the data in question with the increase in the exchange rate, said: “Turkish assets have become cheaper due to the exchange rate difference. For foreigners to get citizenship, they need to buy 250 thousand dollars of housing from Turkey. Nothing has changed here, but falling prices on a dollar basis may have raised the appetite of foreigners." said.
The recession prevailed in the housing market, said: “in addition to the rise in foreign currency, prices fell on the basis of both foreign currency and TL, whose sales continued. I think this downturn has also had an impact on sales. In addition, the partial normalization steps that came in March may have affected sales." said.
250 THOUSAND DOLLARS BECOMES A TURKISH CITIZEN WHO BUYS A HOUSE
By the regulation made at the end of September 2018, the requirement for fixed capital investment of $ 2 million in the acquisition of Turkish citizenship was reduced to $ 500 thousand, and the limit of $ 1 million in the purchase of real estate was reduced to $ 250 thousand. Investors who do not withdraw their investments or deposits in banks for 3 years or commit not to sell the real estate they buy for 3 years are given the right to become Turkish citizens for life.
INCREASE IN FOREIGN CURRENCY BOOSTS BUYING POWER OF FOREIGNERS
Istanbul Real Estate Brokers Club chairman of the Board of Directors made statements, "The first comment that came to my mind about this was that ‘the increase in exchange rates increases the purchasing power of foreigners'. I'm a real estate agent in the Bosphorus, and in my area, there's not a lot of sales to strangers. Because most of the sales to a foreigner are to get citizenship. Sales in the Istanbul Bosphorus, while prestigious property sales, I believe that if qualified / permanent foreign investment comes to our country, the number of rich / spending a lot, foreigners who want to buy property in Bosphorus will also increase." said.
