Turkish property sales jump may temper on market turmoil

• Sales up 20% in first quarter
• Almost 111,000 units sold in March
• Hard to access funds unless rates fall

Turkish property sales rose by 20 percent in the first quarter, but recent political unrest and economic uncertainty from mid-March onwards may weigh on the market.

The number of property transactions rose to 335,786 in the three months to March 31 compared with the same period last year, according to data issued this week by state statistics agency Turkstat.

March sales of almost 111,000 units were just slightly lower than for each of January and February, the data showed.

Political unrest stirred after the March 19 detention and subsequent arrest of Ekram İmamoğlu, the opposition mayor for Istanbul widely seen as a rival to President Recep Erdoğan, on charges of corruption.

This saw the stock market fall more than 12 percent and the lira touch record lows, though both have since regained some ground.

Combined with turmoil over US trade policy and the impact on the global economy, the events of March could cast a shadow over the real estate sector, according to Ulvi Özcan, executive board chairman of the İstanbul Real Estate Brokers Club.

“Due to the latest political and social processes in the country in mid-March, I feel people turned to alternative means of investment,” he told AGBI. 

The recent rise in global gold prices reflected a shift toward more liquid forms of investment, rather than illiquid assets like property, said Özcan. 

“Our sector is not a flexible one, you cannot pull out immediately.”

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The recent uncertainty may also see the Turkish central bank pause on interest rate reductions, after it lowered its key lending rate to 42.5 percent in early March, down from 50 percent. 

Unless rates fall further, accessing funds for property purchases is likely to remain difficult, said Özcan.

“For those with fixed or middle class incomes it is impossible for them to get credit loans – the rates are very high,” he said. 

Top 10 Turkish residential property sales by nationality in March

Russia	274
Iran	153
Ukraine	124
Germany	97
Iraq	72
Azerbaijan	68
China	59
Kazakhstan	54
Afghanistan	46
Saudi Arabia	33

By contrast to activity among Turkish nationals, first quarter residential sales to foreigners dropped almost 20 percent to just short of 4,600. March sales fell 11.5 percent.

Maintaining a long-term trend, Russian nationals dominated, buying 275 properties in March, followed by Iranian passport holders, Ukrainians, Germans and Iraqis.