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Second Home Market in Surprisingly Good Health

Despite continued uncertainty in the social and geo-political arena and the fact that tourist visitors have largely stayed away from Turkey in 2016, this has had nowhere near the impact that was expected on foreign property investment – indeed, recently released figures make for relatively cheery reading.

This year has been the worst on record (in recent memory) for Turkish tourism; with estimated revenue losses at around 11 -12 billion US$, leading many industry insiders to declare that 2016 should be considered a ‘lost year’.
Tourist visitor numbers (for the year)are estimated to be down by around 45% compared to 2015 – for some countries, the estimate is much greater – the numbers for Russian tourist visitors, for example, are down by an estimated 90%.

Tourism, through both direct and indirect revenues,  contributed nearly 13% of all Turkish GDP in 2015 so its importance to the economy can not be over-stated.
Tourism is one of the primary drivers of the ‘second home’ market. Whilst the tourism figures make for dismal reading, it could be that the figures for foreign property sales bring some cheer back into the equation.
One could be forgiven for assuming that house sales (to foreigners) have decreased significantly in line with the dramatic fall in tourism numbers – however, somewhat perversely, the reality is quite the opposite and  foreigners continue to buy property in Turkey by the 000’s !!!.
The latest statistics from the Turkstat (TR Statistical Institute) show that in the 10 months up to October, foreigners had purchased 14.776 properties in Turkey, compared to 18.567 for the same period in 2015. Given that, as mentioned previously, foreign ‘second home’ purchases are almost inextricably linked to the tourist visitor numbers, these figures (albeit a downshift of 20%) make for surprisingly good, if unexpected, reading.
Middle Eastern buyers took the top 3 places for foreign purchases – first place went to Iraqi nationals, with a total of 2.507 units purchased – second and third places went to Saudis (1.446 units) and Kuwaitis (1.379 units) respectively. The European region (for many years the mainstay of foreign property investment) was also well represented, with over 5000 units being purchased by a mix of Russians, Brits, Dutch, Ukranians and Scandinavians.
Istanbul, as expected, was the most popular choice amongst foreign investors, with 4.360 units sold – Antalya province, including Alanya, was once again the most popular resort choice, with 3.628 units sold.
With the lifting of the Russian ban of charter flights to Turkey, continued charter flight fuel supplements and a massive expo drive planned (112 expos in 56 countries), it is expected that the 2017 tourism season will show a significant improvement on 2016 and this can only impact positively on the second home market. 

written by Steve Hand – Elite Group, December 2016

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