Purchases of homes by Russians helped underpin an expansion in Turkey’s real estate industry in June as sales rose at the slowest pace in nine months.
Home sales increased by an annual 11.7 percent to 150,509 units in June, the Turkish Statistical Institute said on Tuesday. The growth compared with a rise of 31.4 percent in the first half of the year. Still, sales in June were at their highest since December.
Russian citizens led a spending spree by foreigners — sales of homes to non-Turks soared by an annual 72.7 percent in June to 35,383 units, the institute said. Russians purchased 1,887 homes, Iranians 987, Iraqis 807 and the Chinese 377. Germans were the biggest Western buyers, acquiring 329 properties.
Sales of homes to Ukrainians totalled 301 units.
Turkey, a NATO member, has strongly criticised the Russian invasion of Ukraine but has refused to follow the West and impose sanctions on Russia or Russian citizens, leaving them free to invest in the country. Turkish President Recep Tayyip Erdoğan travelled to Iran on Tuesday for talks with Russian President Vladimir Putin and his Iranian counterpart Ebrahim Raisi.
Turkey’s property market has been booming and prices have soared after people purchased homes to protect their wealth against inflation, which surged 78.6 percent annually last month. But housing is becoming less affordable and the jump in inflation is leading to higher interest rates on housing loans despite a series of rate cuts by the central bank late last year ordered by Erdoğan.
The construction industry has proven a key driver of Turkey’s economic growth and businessmen close to Erdoğan have come to dominate the sector in recent years.
Purchases of homes via mortgage loans increased by 40.6 percent in June alone to 40,610 units. Mortgage financing was used in 27 percent of purchases, the institute said.
Residential property prices jumped by an annual 127 percent in April, according to the latest data published by the central bank. Interest rates on mortgages now average 18.7 percent compared with 16.9 percent in November last year, according to central bank data.
(This story was updated with Ukrainian purchases in the fourth paragraph.)