Turkish citizenship sales boost housing market

A shrinking economy in Turkey has led the Country into recession for the first time in 10 years. With inflation hovering around 20 percent and a currency crisis that has seen the Turkish lira lose nearly a third of its value, it is no surprise that housing sales have declined in Turkey.

As Turkey's economy works hard to recover from a difficult year, government officials are optimistic about its future growth. The Country's Finance and Treasury Minister Berat Albayrak believes Turkey's economic growth will reach 2.3 percent by the end of this year. In the meantime, the government is implementing new strategies to support different industries. Housing is one of them – and Ankara's plan to boost housing sales seems to be paying off.

The Turkish Statistical Institute recently announced a 25 percent annual fall in house sales. However, as Turks struggle to invest, for foreigners with some capital, especially in Gulf countries, it may be the right time to buy a house in Turkey.

In an effort to battle the decline in house sales and boost the economy, Ankara has eased its criteria for foreigners to obtain Turkish citizenship through investments. Foreigners who buy a house worthy of 250,000 U.S. dollars and do not sell it in three years will be eligible for citizenship. This is down from the previous one million dollars. Foreigners who don't want to buy property can also choose to make a bank deposit of 500,000 dollars – It used to be three million dollars. Another way is to employ at least 50 people – instead of a hundred.

Avi Alkas, the chairman of international real estate giant Jones Lang LaSalle. /CGTN Photo

Avi Alkas, the chairman of international real estate giant Jones Lang LaSalle in Turkey says there are reasons why foreigners are buying property. He says that "Turkey is becoming more attractive for shopping, for medical tourism, that's why, not only for their own uses, but also to make businesses from Turkey outbound, and also Turkey is becoming a more interesting target. That's why some business leaders are also preferring to buy properties in Turkey nowadays." Alkas says Istanbul's location has made it attractive for business owners who travel frequently.

The number of house sales to foreigners in 2018 increased by almost 80 percent compared to the previous year, breaking all-time monthly records. A lot of interest has come from Arab states, especially Iraq. Some lawyers point out that for Iranian businessmen, Turkish citizenship can be beneficial.

Tourists in Istanbul, Turkey. /CGTN Photo

Muharrem Erdogan, founder and CEO at Erdogan Law Firm who specializes in citizenship laws says they have received the highest number of applications from Iran. He states that "due to the sensitive conditions in their own Country, because of sanctions imposed on Iran, businessmen face serious problems. They can't even open a bank account here, because of the embargo in Iran, none of the banks want to do it." By obtaining Turkish citizenship, Iranians are able to overcome all the obstacles sanctions cause for their business practices.

Whether it is to overcome sanctions or for visa-free entry to dozens of countries Turkey has agreements with, or to make use of the Country's position between Asia and Europe – many foreigners are finding out the Turkish citizenship offer attractive. Though real estate sales will give a boost to the economy – it's not clear how much it can make up for the drop in domestic demand in Turkey.