In relation to countries such as Bulgaria, Greece, and Spain, promises for high profits were made to buyers and investors. However, after witnessing inconsequential market growth in the past five years, Russians began selling houses in distant lands to buy property in Turkey. Although considered as a newcomer in the real estate battle, Turkey has managed to slip into the new favorite directories of Russian buyers due to the ease of purchasing commercial and residential units as well as its flair for huge market growth.
In this article, we will discuss why Russians prefer purchasing houses, villas, commercial units, and apartments in Turkey.
Reasons for the increasing demand by Russians for the Turkish real estate
It is interesting to note that commercial units hold equal importance in the eyes of Russian investors as housing. While the latter is mostly bought for individual occupancy or for the purpose of owning a holiday home in the progressive country, commercial property is desirably looked upon for its significant ROI. Russians consider Turkish real estate as an asset that has the potential to generate passive income and to obtain greater resale values. Some of the rock-solid reasons why Russians prefer investing in Turkey rather than other nations are listed here:
- Turkey has moderate and a pleasant climate in comparison to Russia’s extreme cold weather.
- It is one of the most popular holiday destinations for Russian tourists as the airline fares are low and the standard passport holders are exempted from VISA applications for their transit to and out from Turkey for 60 days.
- Property prices in Turkey are low as compared to rates in European countries.
- The exchange rate of the Turkish lira against foreign currencies has made it affordable and budget-friendly for Russians to buy real estate in Turkey.
- The country has a low cost of living in comparison to the lifestyle and living expenses in Russia.
- Turkey offers VAT exemptions to foreign real estate buyers along with other tax-saving benefits.
- The architectural layouts and high-end urban models of Turkish properties especially high-rise apartments and newly-built projects with breathtaking sea-views.
- The attractive opportunity to acquire Turkish Citizenship and relaxed real estate regulations for foreign investors lure Russians to buy commercial units and holiday homes in Turkey.
- The Turkish passport offers visa-free access to 110+ countries in the world and the Citizenship by real estate investment program has offered solid ground to Russians for availing the Turkish nationality.
What are the most preferred locations in Turkey for Russians?
Most Russians see Turkey as an ideal tourist destination, the foremost reason why they are investing in its real estate sector. As a trend, they mostly choose houses located near the sea or near the city center. The most preferred cities are Bursa, Alanya, Izmir, Ankara, Istanbul, Fethiye, and the Mediterranean coastal regions.
The typical Russian buyer falls in the age group between 35 to 50 years old. They also opt for buying villas and apartments in resorts with the purpose of renting or reselling them in the future, thereby netting optimum profits.
What drives Russians to acquire Turkish citizenship?
Initially, the pre-decided amount for obtaining Turkish citizenship by real estate investment was $1 million. However, in 2019, the government significantly slashed the amount to $250K, making it an affordable deal for foreign property buyers. The program attracted numerous investors from all over the world but Iranians, Iraqis, and Russians remained the top real estate buyers throughout the years. In the wake of price reduction, tax benefits, and simplified government regulations, it has sky-rocketed the demands for Turkish real estate.
Turkish citizenship further furnishes crucial benefits to Russian investors such as:
- Visa-free access to countries such as Singapore and Japan.
- Possibility of obtaining US citizenship through an American investor visa after grabbing the Turkish passport.
- Low-interest rates offered by Turkish banks.
Turkish real estate market for Russians
According to the Turkish Statistical Institute, approximately 1.2 million housing units were sold in Turkey in the period of January-August 2020. The residential sale was up by 42.6% as compared to the same phase last year. Research shows that Russians are among the top five most active and consistent foreign real estate buyers in Turkey.
If we take into account the housing sales data of 2019, nearly 1.35 million properties were bought in Turkey. For the first time, Russians were among the most dynamic buyers with one of the highest numbers of Turkish real estate ownerships. The share of foreigners recorded nearly 46,000, which displayed a surge of 14.7% over the previous year’s data of 2018.
Real estate experts attribute the steady surge in the interests of Russian buyers is because of the nominal housing prices in Turkey. The depreciation of the Turkish lira has further paved the way for Russians to purchase properties in the country.
Investing in Turkish real estate with Extra Property
In comparison to other nations, Turkey has a relatively stable economy with strong banking systems combining an environment of high liquidity and low-interest rates. As an increasing number of foreigners have started to visit the stunning transcontinental country, Turkey is recording high figures of tourists and holiday home buyers. The booming tourism, hospitality, and real estate industry have altogether contributed to higher demands for residential and commercial properties.
Extra Property has rapidly earned its reputation as the best-in-class real estate consultancy in Turkey. Having assisted clients from countries such as Russia, Germany, Canada, Iran, Iraq, the US, and the UK, among others, we have gained deep insights into the real estate market, Turkish laws, and regulations for Turkish Citizenship by investment program.
For more information, connect with our best-in-class real estate team here.