It’s no secret that Turkey is a hot favourite with Arabs, both tourists and investors.
Tourists from Iraq, Kuwait, Saudi Arabia and other Gulf countries now make up nearly 40 percent of Turkey’s 42 million annual visitors, according to an official tourism organisation.
However, Arabs aren’t just visiting - they’re buying, too. Between January and July this year, sales to foreign nationals were up 24 percent over last year. And at the top of the list are Iraqis, who snapped up 2031 properties during the first seven months of the year. Saudis took the second spot, buying 1420 properties. Arab visitors now make up the bulk of foreign real estate acquisitions. Let’s take a look at the factors behind Turkey’s popularity with Middle Eastern investors.
Who and where
Most buyers hail from Kuwait, Iraq, the UAE and Jordan. Arab billionaires - and royal families from the Gulf region - are snapping up seaside residences in chic Istanbul Bosphorus areas: Kandilli, Vanikoy, Bebek and Yenikoy, where prices can reach US$100 million. Other buyers are seeking out villas near Sapanca Lake and Kartepe, and interest in the historic city of Bursa is growing.
Arab buyers tend to prefer the Black Sea region, with the province of Trabzon growing in popularity among both Arab tourists and buyers.
Seven reasons Turkey is first on the list for Arab investors
1. Property is a great investment
House sales and house prices have been increasing steadily since the recession. According to TurkStat, in 2008 there were 427,000 property sales in Turkey. Contrast that to the million properties sold last year, and it’s clear the real estate market is very healthy indeed. Prices have kept pace with sales, with a 18.96 percent increase this year over 2014. Istanbul prices soared by 27.57 percent. These price rises show no signs of slowing as demand far outstrips supply, especially in larger cities like Istanbul. The government is trying to address the huge demand for new housing with urban transformation, but is still falling short, pushing prices up drastically.
2. Arabic infrastructure is better than ever
With Arabic-speaking hotel staff, tourist guides and other hospitality workers, it’s never been easier for Middle Eastern visitors to enjoy Turkey. However, it doesn’t stop there. Arabic-speaking local real estate agents and lawyers mean navigating the property market is a breeze. You can even find Arabic-speaking interior designers and architects ready to help. New communities of Arabic speaking investors and residents are encouraging a cultural shift in Turkey, making investment and relocation for lifestyle easier than ever.
3. The hotel business is thriving
Arab tourists are flooding into the country, driving up demand for hotels, which are experiencing a new wave of investment. And who better to serve these new visitors than Arab hotel owners? Middle Eastern holidaymakers tend to eschew Mediterranean destinations and head to the Black Sea coast, especially Uzungol and Trabzon, where the coastline is green and the weather slightly cooler than the southern destinations. Numbers of Arab-owned hotels on the Black Sea are growing as entrepreneurial buyers seek to capitalise on this new wave of tourism. While supply waits to catch up with demand, locals are leasing their homes to the Arab tourists in need of accommodation.
4. It’s easier than ever to invest
The passing of a new law in 2012 making it easier than ever for foreigners to buy real estate in Turkey precipitated a wave of investment from countries in the Middle East. The abolishing of the rule of reciprocity - under which only citizens of countries which allowed Turks to own property could buy Turkish real estate. The removal of this law has opened the doors to many foreign investors - including Arabs.
Foreign buyers can also buy more real estate - the maximum of 2.5 hectares is now 60 hectares.
5. It feels like home
Turkey’s position as a bridge between the east and west means it’s a comfortable place for people from the Middle East to live and work - and in fact, around a million Arabs now live in Turkey. With mosques galore, familiar food, religious events and even architecture reflecting its Middle Eastern heritage, Turkey is a home away from home for many Arabs. Now, many language schools in Istanbul are offering Arabic courses, and shops have sales positions for Arab speakers.
6. Turkey's a safe haven for tourism and investment
The Arab spring triggered a wave of tourism and investment in Turkey that shows no sign of abating. Although it’s weathered its storms, Turkey’s economy remains stable. Buyers seeking an investment haven outside the more volatile parts of the Middle East and tourism away from traditional favourites like Syria, Egypt, Tunisia and Lebanon are flocking to cities like Istanbul and Antalya for new opportunities.
7. Great connections
Istanbul’s third airport is set to be the second largest in the world. It will connect Middle Eastern countries and Turkey’s largest city in a way that’s never been achieved before, with hundreds of flights to major airports throughout the Middle East next week. Logistical proximity is crucial to investment - more than 70 percent of Turkey’s 42 million annual visitors arrive by air. New ties between Turkey and the Middle East will only serve to increase investment opportunities for Arab buyers.
If you’d like to know more about investing in Turkey, please contact us.
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