Foreigners buy Turkish homes at record pace as lira slides

Turkish house sales to foreigners jumped nearly 50% to a record level in November_ data showed on Tuesday_ bringing in billions of dollars in foreign exchange as a lira slump made purchases significantly cheaper for those buying with hard currency.

Against a background of more than 20% annual inflation_ the property market was generally buoyant in November_ with overall sales surging 59% year-on-year to 178_814 properties_ the Turkish Statistical Institute figures showed.

"People seeing housing as a means of defence against inflation was instrumental in the sharp sales rise in November_" said TSKB Real Estate Appraisal general manager Makbule Yonel Maya_ adding that lower state banks loan rates had an impact.

The lira slumped to a record low of 14.99 against the dollar on Monday_ representing a halving in value this year. At its current level of 14.2 it is more than 40% weaker than at the start of September.

Altan Elmas_ chairman of the Konutder housing developers and investors association_ said foreign currency inflows due to house sales in the 11 months to November amounted to some $8.5 billion_ exceeding its forecast.

"We can reach $10 billion by the end of the year. The biggest support for the new economic programme in the period ahead will come from property sales to foreigners_" he said.

President Tayyip Erdogan has backed aggressive interest rate cuts to support his new programme that stresses exports and credit - despite soaring inflation and widespread criticism of the policy from economists and opposition lawmakers.

The 7_363 homes sold to foreigners in November represented the highest monthly level since the data series began in 2013. By far the highest number of foreign buyers were Iranian citizens_ followed by Iraqis and Russians.

Property sales to foreigners have been strong throughout the year_ rising 39.4% in the first 11 months_ while total house sales actually fell 9.2% in the 11-month period_ compared to a year earlier.

The most popular place for house sales to foreigners was Istanbul_ with 2_922 sales_ followed by the southern resort of Antalya and the capital Ankara.

The data also showed November mortgage sales climbed 61% from a year earlier to 39_366_ accounting for 22% of the total in the period.

Last year_ sales surged due to pandemic-era cheap loans from state banks_ prompting real estate developers to launch campaigns for buyers.