ANKARA: Russians looking to bypass Western sanctions and Ukrainians seeking to flee the war are driving a property boom in Turkey, with prices in some areas more than trebling in recent weeks.
As part of the sanctions imposed on Russia, several banks in the country have been excluded from the SWIFT messaging system. Oligarchs close to President Vladimir Putin have also been targeted.
But Ankara is not party to the Western financial sanctions and has not halted direct flights with Russia. That means Russians have the opportunity to build a new life in Turkey, and can take their cash, gold and cryptocurrencies with them.
After Iranians and Iraqis, Russians are the third-largest buyers of Turkish property. According to official figures, in February alone, they bought 509 houses, almost doubling the figure for the same period of last year. Ukrainians bought 111 properties in the month.
The spike in interest was noted by Turkish property website Emlakjet.com.
“Searches by Russians rose by 61 percent compared to the previous month,” its CEO Tolga Idikat told Arab News.
“The highest number of property searches by Ukrainians occurred in February when the political crisis reached its peak. Their demand is mostly concentrated in the Mediterranean resort town of Antalya, while they prefer villas and single-family houses.”
The number of searches by Russians in March more than doubled year on year, while those made by Ukrainians rose by 30 percent, Idikat said.
The increase in demand has driven up prices by at least threefold and made them euro-denominated, while real estate agents are predicting a supply shortage in the months ahead, he added.
“The number of houses cannot match the demand, which increases day by day. The currency advantage that foreign investors have also pushes prices up,” Idikat said.
Unlike Russians, who mostly want to live in Turkey, Ukrainians are looking for short-term deals, usually for about three or four months, as they expect to return home after the war, he added.
Russians’ preferred destinations are Istanbul, Antalya, the western city of Izmir and the northwestern city of Bursa. They are looking for properties both to buy and rent.
Under Turkish law, Russians who buy a property worth $250,000 and keep it for at least three years are entitled to a Turkish passport. The slump in the value of the Turkish lira is also a draw for buyers.
There are currently about 30,000 Russians and 9,000 Ukrainians living in Antalya, mostly in Konyaalti and Manavgat districts.
In response to the spike in demand, several real estate websites, including Emlakjet, are now promoting their properties directly to Russian buyers.
“Although we haven’t yet offered a special content for Russian and Ukrainian house-seekers, some of our members have begun publishing notices in the Russian language,” Idikat said.
The housing spike is a boon for Turkey, which is set to lose out on tourism revenue as a result of the Russian invasion of Ukraine. Tourism accounts for about 3.8 percent of the country’s GDP, and more than a quarter of all visitors last year were from Russia and Ukraine — 4.7 million from the former and 2.1 million from the latter.
“Turkey is quite exposed to the economic shocks caused by Russia’s invasion of Ukraine,” Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington, told Arab News.
So a short-term boost to real estate markets could help to soften the economic blow, he said.