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Turkey home sales down, but Russians still active buyers

people person, human, building Reuters/Murad Sezer
The number of homes sold in Turkey over the first two months of 2023 was down 4.4% year-on-year
  • Istanbul most popular location, with 18.7% of sales in February
  • Foreign buyers account for 4% of sales, a 27% year-on-year drop
  • Kuwaiti and Saudi buyers biggest investors from the Gulf

Turkey recorded an 18 percent year-on-year drop in the number of house sales in February, the same month in which an earthquake killed more than 44,300 people and caused $34.2 billion worth of damage.

The latest data from the Turkish Statistical Institute also found that sales to foreign buyers were down 27 percent year-on-year in the same month.

However, Russians continued to be active investors, accounting for more than a third of homes bought by overseas buyers.

Foreign buyers accounted for only 4 percent of total sales, with 3,350 sales to overseas investors in February, 19.4 percent down on January 2023 and a 27 percent drop compared to February 2022.

Russian buyers accounted for 1,183 homes sales in February, or 35 percent of all sales to foreign buyers. Reflecting the overall trend, this was down from the 1,557 sales to Russian buyers in January 2023.

Iranian buyers followed with 446 sales, followed by Iraqis (173), Ukrainians (142), Kazakhstanis (133) and Germans (124).

Kuwaiti buyers were the biggest investors from the Gulf, with 73 homes bought, followed by 62 sales to Saudis.

A total of 80,031 homes were sold in February, compared to 97,708 in January 2023 and 97,587 in February 2022.

Istanbul was the most popular location, accounting for 14,980 sales, or 18.7 percent of homes bought last month. The capital city Ankara saw 8,235 house sales and İzmir recorded 5,031, 10.3 and 6.3 percent respectively.

Overall, the number of homes sold in the first two months of 2023 was down 4.4 percent year-on-year.

The dip in sales comes as the World Bank reported last month that the two major earthquakes which hit Turkey on February 6 caused $34.2 billion in damage.

The bank estimated that the earthquakes would knock at least one percentage point off Turkey’s GDP growth, which was estimated to be around 3.5 to 4 percent for 2023.

The UN Development Programme put the cost even higher, estimating it would exceed $100 billion.

The slowdown in economic activity was reflected in the latest Purchase Managers Index for February, compiled by the Istanbul Chamber of Industry and S&P Global, which remained unchanged at 50.1. Any score below 50.0 indicated contraction in the economy.

"The terrible earthquake in February impacted the Turkish manufacturing sector during the month, with supply chains and production lines affected in particular,” said Andrew Harker, economics director at S&P Global Market Intelligence.

“Hopefully we will see signs of recovery in the affected areas and across the sector as a whole in the months ahead."