Some of you will have heard of the new bill recently passed regarding the Turkish property market, or more specifically regarding which nationalities can buy property in Turkey.
When the Turkish property market was first opened to foreign buyers in 2002, foreigners were allowed to buy only in a few zones. And because of the so-called reciprocity clause, only those from countries that allowed Turks to buy were allowed to buy in Turkey. The zones were then dropped in 2005, but reciprocity remained.
In May this year, the Turkish government passed a bill putting an end to reciprocity and potentially opening up the Turkish property market to nationals from hundreds more countries.
However, it wasn’t a blanket end to reciprocity allowing everyone to buy property in Turkey; the government said that it would publish a new list of nationalities that would be allowed to buy in Turkey under the new legal system.
Since Aug. 6, nationals from 183 countries have been allowed to buy in Turkey, although there are some restrictions, including countries that share a border with Turkey, which apply mostly to border properties. The law also increases the amount of land foreigners can purchase in Turkey without needing special permission from 2.5 hectares to 33 hectares.
Some Big Hitters
Nationals of Russia, China, and India were all banned from buying in Turkey because of reciprocity but are now allowed to buy under the new law. Although Chinese and Indian buyers will need approval of the Turkish Domestic Affairs Ministry, and Russia can’t buy in Turkish cities near the Russian border, incoming buyers from these three emerging economic powerhouses are expected to add millions in revenue to the Turkish property market. But by far the biggest sales boost is expected to come from the newly-allowed-to-buy Gulf Arab states of UAE, Saudi Arabia, Yemen, Lebanon, Libya, Kuwait, Qatar, Jordan, Egypt, and Bahrain.
Arabs like to vacation and invest in other Arab states, and failing that, in Muslim countries.
Thus, the Arab Spring protests that shook the Arab world effectively took a scythe to Turkey’s competition for Arab tourism and investment. Egypt is a prime example; it had been one of Turkey’s main competitors for Arab and international tourism before the Arab Spring, but the Arab Spring deposed the government and left an unstable power vacuum, which was unsafe for family holidays and unappealing for investment.
At the same time, Turkey’s popularity in the Arab world was being increased even further because of its firm stance on Israel over the recent Flotilla incident in the strip. The fact that the Turkish government had spent the 18 months prior to the Arab Spring increasing relations with nations around the world, including the gulf, and that this led to many visa-free travel deals between Turkey and Arab states, including Syria, Jordan, Lebanon, and Libya, has all helped to increase Turkey’s popularity in the Arab world. As a result, it is expected that the Arab nationals newly allowed to buy property in Turkey will add $2 billion per year in additional revenue to the property market.
Already Breaking Records
The new law didn’t come into effect until the new list was published Aug. 6, but the latest data from the Turkish central bank shows that foreign purchases of Turkish property in May completely smashed previous records.
In May, foreign buyers purchased $1.1 billion dollars worth of property in Turkey, some 4 times the total amount purchased in the whole of 2011 and a new record for monthly sales.
This was before Turkey opened its doors to any additional nationalities, and indeed most of the buyers came from within Europe. It is thought that they plan to sell the properties on now that the law is passed.
Those Not on the A-List
But it is not all peaches and cream, as many nationals were still left facing severe restrictions on purchasing property in Turkey, and others remained banned altogether.
Although on the list, Greek nationals are banned from buying in its bordering areas, all shore cities, and in Istanbul (28 cities in total). Azerbaijan (Nahcivan), Bulgaria, Iran, Iraq, and Georgia are in the same boat when it comes to inability to buy in their border cities. Nationals of Palestine, Seychelles, Iran, and Iraq are in the same boat as those from China in that they need approval of Turkish Domestic Affairs Ministry. Meanwhile, Iranian citizens must not have any UN sanctions against them and Iraqis must get permission from both Domestic Affairs and Foreign Affairs Ministries.
Liam Bailey is a UK freelance journalist, he follows the work of Turkey property developer Wise Move Homes, specialists in Altinkum property.
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