The Turkish government is planning to further boost property sales to foreigners by offering work permits to those buying property over a certain level.
This measure is a follow-up to 2013’s year-long residence permit offered to those buying their first property in Turkey, and, like this incentive, aims to increase home ownership amongst foreign buyers.
The golden visa scheme - residency awarded to property buyers - has been successful in Turkey and in other countries throughout Europe. With the added bonus of a work permit added to the mix, Turkey is likely to further boost its property sales.
The minimum property purchase price for a work permit has yet to be established, but experts are speculating that the limit will be on the high side, possibly around half a million Euros.
Countries offering real estate purchase incentives:
Industry boost will be led by Gulf buyers
Head of the Association for Residential Developers and Investors Omer Faruk Celik, said the measure could transform the Turkish real estate industry. “If you give citizenship there will be more demand, particularly from the Gulf countries. Our revenues from foreigners will at least double,” Celik said.
Turkey is increasingly selling its property to Middle Eastern buyers, with the majority of buyers - especially in Istanbul - hailing from Saudi Arabia, the UAE, Kuwait, Qatar, Libya, Palestine, Syria and Iraq.
The next measure? Citizenship will likely be the next offer on the table, although it’s not clear whether this will be automatic or after a period of years following that initial residency permit. Presently, citizenship is automatic after five years of continuous residency. But we might see in the future an easier for path for those buying property over a certain level.
$4 billion annual property sales
In 2011, revenue from Turkish real estate was $2 billion. In 2015 that amount had more than doubled to $4.156 billion.
Investors from the Middle East are now the foremost investors. Stats from April show that Iraqi citizens bought 276 properties in April, more than any other country. This was followed by Saudis (165 properties), Afghans (115) and Russians (96).
Istanbul is still at the top, attracting the most foreign buyers. In April 540 properties were sold to foreigners. In total, 1581 properties were sold to foreigners across Turkey.
Fastest rising house prices in Europe
Despite the uncertainty engendered by bordering Syria, and the country’s role in the refugee crisis, Turkey still has the fastest rising house prices in Europe and the Middle East, with values up by 91.3 percent over the past five years.
These exponential price rises are due to rapid economic growth and the almost as rapid urbanisation of Istanbul. Turkey has a large youth population who are quickly increasing their earning power. Naturally, these young upwardly-mobile types are keen to invest in property. This has prompted a surge in institutionalised mortgage lending, which is still relatively phenomenon in Turkey. More banking power has driven demand, which in turn has helped push prices up.
Strong levels of foreign investment are also helping prices move, with investors attracted to healthy mid-term and long-term capital gains in the fastest-growing property market in the northern hemisphere.
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