Turkish Real Estate Buyers Go Global as Domestic Market Slows

While foreign investment in Turkish real estate dropped by nearly half in the first five months of 2025, Turkish citizens ramped up overseas property purchases, transferring more than $1 billion abroad. Dubai, Greece, and Spain emerged as top destinations, as investors seek higher rental yields, tax benefits, and visa-free travel opportunities.

As access to housing loans becomes increasingly difficult for Turkey’s middle class due to high interest rates, wealthy Turkish investors are turning to international markets for real estate investment. The trend, which accelerated in 2023, continues to gain momentum in 2025, driven by the lure of high rental income, residency permits, tax advantages, and greater freedom of travel.

$1 Billion Transferred Abroad in Just Five Months

According to the Central Bank of Turkey’s balance of payments data, Turkish nationals purchased $144 million in overseas real estate in January, $190 million in February, $227 million in March, $232 million in April, and $238 million in May. This brings the total for the January–May period to $1.031 billion — a 19.5% increase over the same period last year. Converted to local currency using the central bank’s average exchange rate, this figure amounts to approximately 40 billion Turkish liras.

Net Outflow Replaces Net Inflow

In contrast, foreign investment in Turkish real estate declined by 49.5% in the same five-month period, falling from $1.437 billion in 2024 to just $726 million this year. As a result, the foreign currency outflow for real estate purchases surpassed the inflow by $305 million.

This marks a reversal from the first five months of 2024, when Turkey recorded a net inflow of $574 million in real estate-related foreign exchange. Now, the balance has shifted to a net outflow, reflecting a notable change in investment patterns.

$2.3 Billion in Annual Purchases by Turks Abroad

Over the 12-month period ending in May 2025, Turkish citizens purchased $2.321 billion worth of overseas real estate — exceeding the $2.111 billion in purchases made by foreign nationals in Turkey. This generated a net outflow of $210 million. If the current pace continues, Turkish overseas property purchases could approach $3 billion by year-end, setting a new record.

Turkish demand for foreign property has exploded in recent years:

• $213 million in 2020

• $371 million in 2021 (up 74.2%)

• $628 million in 2022 (up 69.3%)

• $1.782 billion in 2023 (up 183.8%)

• $2.153 billion in 2024 (up 20.8%)

Dubai, Greece, and Southern Europe Top the List

The most popular destinations for Turkish real estate investors in 2025 are the United Arab Emirates (especially Dubai), Greece, Spain, and Portugal. These countries offer attractive rental yields, favorable tax treatment, and in many cases, residency or even citizenship pathways tied to property investment.

In Dubai, Turkey now ranks 7th among the top foreign real estate buyers, following India, the UK, Russia, China, Pakistan, and the US. Greece has become the top choice for wealthier Turks seeking visa-free travel across Europe. A €250,000 investment in Greek real estate qualifies buyers for residency and unrestricted EU access. Similar programs are active in Spain, Portugal, and Hungary, where the EU channels investment into countries in need of capital.

Foreign Real Estate Interest in Turkey Plummets

Foreign real estate investment in Turkey, once dominated by Middle Eastern buyers and Russians, has dropped sharply from its 2022 peak of $6.273 billion. After falling to $3.560 billion in 2023 and $2.822 billion in 2024, the current trajectory suggests total foreign investment may fall below $1.5 billion in 2025, its lowest in years.

Declining Contribution to Turkey’s Current Account Financing

The net contribution of foreign direct investment (FDI), including real estate, to Turkey’s current account deficit financing has also diminished. In the first five months of 2025, net FDI inflows stood at just $1.228 billion, down 29.2% from $1.733 billion in the same period of 2024.

With Turkey’s current account deficit reaching $21.04 billion during this period, direct investment covered only 5.8% of the gap, compared to 11.4% last year.

Capital Outflows Accelerate

Between January and May, Turkish firms transferred a net $3.499 billion abroad under the direct investment category, a 50.2% increase year-on-year. Of this, $2.880 billion was allocated to direct investments including real estate, while another $619 million went to loans and payments to affiliated companies.

Meanwhile, gross FDI into Turkey during the same period totaled $4.727 billion, including $726 million in real estate and $1.933 billion in intra-group loans. After adjusting for divestments, net FDI into Turkey was $2.068 billion, meaning outbound capital flows from Turkish investors exceeded inbound flows by a significant margin.

The ratio of capital outflows to inflows rose from 57.3% last year to 74% in 2025, highlighting the growing appetite among Turkish investors to move capital abroad.

Source: Naki Bakır, DÜNYA Gazetesi
Adapted for English by PA Turkey

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