Sharp Decline in Foreign Investment
Türkiye’s once red-hot real estate market is now facing a cold shower, as foreign investment dwindles precipitously. According to a recent report by EVA Real Estate Appraisal Consultancy, sales to international buyers plunged by a staggering 71% in the first quarter of 2024 compared to the same period last year. This dramatic downturn is largely attributed to the exorbitant price tags attached to properties.
Contraction in Transactions and Square Footage
The number of transactions involving foreign purchasers also contracted by 45%, with the total square footage acquired plummeting from 1.6 million to 471,000 square meters. These figures align with data from the Turkish Statistics Institute, which reported a 48% year-on-year decline in foreign home purchases.
Decrease in Average Property Prices
The average price paid by foreign investors has also undergone a significant correction. GİGDER, the Real Estate Service Exporters’ Association, reported a decrease from $268,368 to $170,719 per property. Furthermore, a grim outlook prevails among GİGDER members, with nearly half anticipating a sustained decline in foreign sales over the next three months.
Historical Demand from Diverse Foreign Buyers
Historically, Türkiye’s real estate market has enjoyed robust demand from a diverse range of foreign buyers, including Russians, Iranians, Iraqis, Ukrainians, Germans, and Kazakhs. However, even these groups have curtailed their investments. The most pronounced decline was observed in purchases from Gulf countries, with a precipitous 74% decrease in square footage acquired.
Istanbul’s Market Takes a Hit
Istanbul, the crown jewel of Türkiye’s real estate market, has not been spared from the downturn. Despite its enduring appeal to foreign buyers, the city witnessed a sharp 67% decrease in square footage purchased and a 42% drop in the number of transactions.
Factors Behind the Decline
Experts attribute the decline in foreign investment to a perfect storm of factors, including skyrocketing property prices, economic headwinds, and geopolitical uncertainties. As the market grapples with these challenges, the future trajectory remains clouded, with the possibility of either a protracted downturn or a potential resurgence.