Sliding lira leads to foreigners buying Turkey homes at record pace

Currency fell to a record low of 14.99 liras against the dollar on Monday, representing a halving in value this year

Residential buildings in Istanbul, Turkey. Iranians account for the highest number of Turkish home purchases, followed by Iraqis and Russians. Bloomberg

Turkish house sales to foreigners jumped about 50 per cent to a record level in November, data showed on Tuesday, bringing in billions of dollars in foreign exchange as a lira slump made purchases significantly cheaper for those buying with hard currency.

Against a background of more than 20 per cent annual inflation, the property market was generally buoyant in November, with overall sales surging 59 per cent annually to 178,814 properties, the Turkish Statistical Institute figures showed.

"People seeing housing as a means of defence against inflation was instrumental in the sharp sales rise in November" and lower state bank loan rates had an impact, said Makbule Maya, general manager of TSKB Real Estate Appraisal.

The lira slumped to a record low of 14.99 against the dollar on Monday, representing a halving in value this year. At its current level of 14.2 it is more than 40 per cent weaker than at the start of September.

Altan Elmas, chairman of the Konutder housing developers and investors association, said foreign currency inflows due to house sales in the 11 months to November amounted to about $8.5 billion, exceeding its forecast.

"We can reach $10bn by the end of the year. The biggest support for the new economic programme in the period ahead will come from property sales to foreigners," he said.

President Recep Tayyip Erdogan has backed aggressive interest rate cuts to support his new programme that stresses exports and credit – despite soaring inflation and widespread criticism of the policy from economists and opposition politicians.

The 7,363 homes sold to foreigners in November represented the highest monthly level since the data series began in 2013. By far the highest number of foreign buyers were Iranian citizens, followed by Iraqis and Russians.

Property sales to foreigners have been strong throughout the year, rising 39.4 per cent in the first 11 months, while total house sales actually fell 9.2 per cent in the 11-month period, compared to a year earlier.

The most popular place for house sales to foreigners was Istanbul, with 2,922 sales, followed by the southern resort of Antalya and the capital Ankara.

The data also showed November mortgage sales climbed 61 per cent from a year earlier to 39,366, accounting for 22 per cent of the total in the period.

Last year, sales surged due to pandemic-era cheap loans from state banks, prompting property developers to launch campaigns for buyers.