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Wealthy Russians seek financial havens in Turkey by snapping up property

Sales to foreigners have risen due to the higher demand from Russians after the Ukraine conflict broke out. Picture: Oktay Karataşoğlu/Pixabay

Sales to foreigners have risen due to the higher demand from Russians after the Ukraine conflict broke out. Picture: Oktay Karataşoğlu/Pixabay

Published Jun 16, 2022

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ISTANBUL - Turkish home sales surged 107.5% year-on-year in May to 122 768 houses, with Russians making up the highest number of foreign buyers for the second consecutive month.

Data from the Turkish Statistical Institute shows that sales to foreigners jumped 235.7% year-on-year to 5 962 units, as they sought to take advantage of a government scheme that awards Turkish citizenship to those who buy homes.

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Sector officials said sales to foreigners surged before a law raising the scheme's minimum purchase value from $250 000 (R4 million) to $400 000 (R6.4m) came into effect this week.

Gul Gul, founder of real estate sale company Golden Sign, says 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.”

Russian citizens topped the list again in May with 1 275 home purchases, 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 as they seek financial havens following Moscow's invasion of Ukraine and Western sanctions, many property companies say.

Makbule Yonel Maya, general manager of TSKB Real Estate Appraisal, says that, 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.

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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 (R160bn) was brought into the economy in 2021 thanks to property sales to foreigners, with sales standing at 58 576 units.

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