Foreign buyers swooped into Turkey’s property market in the wake of the historic lira crisis and purchased more homes in the last six months than in all of 2017.
Last August, Turkey’s currency lost one-third of its value in a single week, making goods (and homes) that much cheaper to hordes of tourists and prospective home buyers overseas carrying anything from British pounds to Iraqi dinars. The lira stabilized to an extent in the following months, but as of late last week was still about 30% weaker than a year ago. The exchange rate is about US$1 to 5.3 Turkish lira.
The buying opportunity has not been lost on foreigners, who bought double the number of homes in September than they did in the pre-crisis month of July, according to government statistics published last week.
"We definitely made sales off the back of the currency movement, though for some people, it was just fortuitous that it happened at that moment," said Julian Walker, director of Spot Blue International Property Ltd., a London-based Turkish real estate portal targeting foreigner buyers. "It was an extra bonus."
For example, a grand coastal villa selling for 5.5 million lira would have cost a U.S. buyer roughly $1.146 million in July but only $859,000 in September off the exchange rate alone.
Sales to Iranian buyers more than quadrupled in that time, making them the second largest cohort of foreign buyers in 2018. Meanwhile, the number of sales to both Algerians and Jordanians tripled. Besides the discount foreigners are getting on the exchange rate, the Turkish government has also eliminated a pricey 18% value-added-tax on real estate purchased with foreign currency.
Turkey also saw an influx of buyers from the West. Germans more than doubled their activity in the Turkish housing market, as did Americans, who landed in Turkey’s top 20 for the first time in at least four years, according to the government data.