Global cities experienced only modest growth in home values from April through June, as much of the world faced some form of economic lockdown. While, three Turkish cities witnessed astronomical price growth that led the entire global index, Mansion Global reported.
House prices in 150 urban centers rose by an average of 3.4% in the second quarter of 2020 compared to the same period last year, according to Knight Frank’s Global Residential Cities Index, published in October. While it marked a very slight downtick from the 3.6% annual growth recorded in the first three months of the year, the massive economic disruption caused by the pandemic appears not to have had an immediate impact on city home prices.
Indeed, there were still pockets of extreme growth particularly in Turkey, where astronomical price growth in three cities led the entire index. The Turkish port Izmir, the country’s third most populous city, saw home prices shoot up 28.1% in the year through June, followed by Ankara, the capital, with 26.4% growth and Istanbul, with 20.2% growth year-over-year.
A mixture of strong demand, fed by large population growth, and declining supply has helped prop prices. A weak lira has also helped draw foreign interest in Turkish real estate, particularly among buyers from Gulf countries, according to Knight Frank.
After Turkey, the Philippines capital of Manila; St. Petersburg, Russia; and Seoul all saw annual price growth over 15% in the second quarter.
Seoul and Manila were, however, outliers on a continent where price growth slowed in the second quarter of this year. Asian cities, on average, saw the lowest annual growth—under 3%—of any region in the second quarter.
Meanwhile, the number of markets with negative price growth expanded in the second quarter, likely reflecting the increased economic uncertainty.
Abu Dhabi and Dubai trailed the entire index with prices falling 8.3% and 6.6%, respectively. They were joined by a slew of Indian cities, including Delhi and Mumbai, with major annual price falls.
As for the world’s luxury hubs, Hong Kong—among the most expensive real estate market in the world—saw home prices slip 2.7% in the latest index. New York City saw prices rise 1.7% year-over-year.
Sweden, without a formal lockdown, recorded higher price growth than most other European cities. In Stockholm and the port city of Malmo, prices rose more than 6% in the year through June.
The Spanish capital, Madrid, and the Malaysian capital, Kuala Lumpur, came in the 129th and 130th places, with house prices falling by 0.8% and 1.2%, respectively.
Turkey ranks 14th among world's most advantageous real estate markets for foreigners
Separately, in a research that listed the 25 most advantageous real estate investment markets, Turkey secured 14th place, thanks to its affordable prices, growth projections and stable tourism market.
According to the report, conducted by the US-based international real estate investment company Remote Ventures, Turkey ranked fourth among the fastest growing markets and third among the cost of living.
The 'Top 25 Global Real Estate Markets in 2020’ index revealed the 25 most advantageous real estate investment markets among 200 countries it reviewed, and Turkey placed high with features like growth rate, cost of living, income taxes and transaction costs, in addition to tourism sector growth.
It is worth mentioning that foreign residential sales in Turkey significantly increased following the reciprocity law launched in 2013, contributing to the country’s real estate sector, which came to the fore as one of the leading markets along the Mediterranean coastline. These laws and regulations have made the country more competitive.
Foreign sales-born income has surpassed $6 billion in Turkey since the implementation of the reciprocity law, breathing new life into the sector.
Turkey’s home sales report 2015 - 2020
Turkey’s residential property sales surpassed 7 million homes during the past 5 years as locals bought 6.9 million houses while foreigners purchased 154,871 residences, according to the article, based on data from the Turkish Statistical Institute (TÜIK).
Istanbul: Turkey’s favorite city for property
Istanbul, the biggest city in Turkey, ranked as Turkey’s favorite city and top tourist destination with home sales of 1.2 million, Ankara followed with 720,124, Izmir with 412,488, Antalya with 313,735 and Bursa with 265,715.
Many Anatolian provinces have seen over 50,000 houses sold each in the last five years in metropolitan areas.
Notable increase in foreigner interest in Turkish homes
Foreigners have been interested in buying a property in Turkey for the last five years, as they purchased nearly 155,000 residences.
Foreigners’ favorite spot for house purchases has been Istanbul with 61,734 residences being sold, followed by Antalya, Bursa, Yalova, capital Ankara and Sakarya.
Turkey’s homes sales by nationality
Iraqis have become the biggest buyers of Turkish property since January 2015, purchasing over 30,000 residences. Iran, Saudi Arabia, Russia and Kuwait followed Iraq’s lead, with each group purchasing at least 10,000 residences.
The first eight months of 2020 have seen increasing interest by the Chinese, who bought 575 houses in the January-August period and moved to the eighth rank among foreigners buying the most property.
Foreign buyers became Turkish citizens
Foreign residential sales showed a rapid increase in the last year due to the high exchange rate and legislative amendments that eased the minimum requirements for acquiring Turkish citizenship, which has led investors from all over the world to benefit from this opportunity and acquire residential property in the country.
Under regulations introduced on Sept. 19, 2018, foreigners who own real estate in Turkey worth a minimum of $250,000 – down from $1 million – are eligible for Turkish citizenship.
According to the Interior Ministry's General Directorate of Population and Citizenship Affairs, some 2,611 foreign buyers became Turkish citizens a year after the amendments were introduced.
Foreigners were first able to buy property in 2001, and since then Turkish authorities have continually revised and simplified the process to attract investment in the housing market from overseas. Buying a house or owning a property in Turkey can be completed in just one day.
Turkey offers a golden opportunity for settlement and investment, offering a distinguished opportunity to obtain Turkish citizenship for the family during a record period. Akarkom team of real estate consultants is ready to help you choose the most suitable properties according to your budget and requirements from within a bouquet of carefully selected villas, apartments and shops.
Edited by Ziyad Veis based on knight Frank, Mansion Global, World Property Journal, and Remote Ventures.