Buy now, probe later? Russians snap up Antalya property, raising prices and eyebrows
Antalya realtors have rarely been so busy. That’s according to Birol Yazar, who translates Russian and Ukrainian legal documents for his father’s namesake real estate agency, Kemal Yazar Gayrimenkul, in Konyaaltı – a popular district among foreign residents.
“After the war started, my work spiked,” Birol said, lifting a thick, blue binder and flipping through the papers inside. “Look at this. These are all foreigners. I will translate all of this.”
Before the Russian invasion of Ukraine in February, Birol said he’d get one or two translation jobs a day. Since March, he’s been getting 10-15 jobs a day.
“More Ukrainians came than Russians at first, but then many more Russians came because of the sanctions,” Birol said. “They didn’t trust the banks, they didn’t feel safe there … the way they saw it, it was best to come to Turkey and open bank accounts here.”
Other Antalya realtors interviewed by Turkey recap shared similar observations. Through much of 2022, Russian citizens have been leading a record surge in Turkish home purchases by foreigners, accounting for 26 percent of nationwide home sales to foreigners in July, according to figures released today by the Turkish Statistical Institute, which also ranked Antalya as the top choice among non-Turkish home buyers last month.
Apart from attracting partial blame for a sharp hike in real estate prices, rising Russian property purchases in the country may also attract scrutiny as an avenue to circumvent war-related sanctions.
Western officials have expressed concerns about the potential for investor-friendly real estate markets like Turkey and the United Arab Emirates, along with New York and London, to serve as conduits for illicit activities, warning secondary sanctions could be applied to individuals or entities enabling sanctions evaders, including through the sale of large properties.
The Liman neighborhood of Antalya’s Konyaaltı district, referred to as “Little Russia” by some locals, has long been known for its sizable Russian population, pebble stone beach and more recently for acts of vandalism on matryoshka statues in its main plaza this spring, apparently in response to the Russian invasion of Ukraine.
A few blocks west of the Matruşkalı Park, as it’s called, stand the Kremlin Residence apartment buildings and Russian-language ads hang in the windows of surrounding real estate agencies, of which there are many, including the one where Birol and his father, Kemal, reflected on the surge of Russian apartment shoppers.
“After the Boğa Çayı bridge, it’s mostly Russians,” Birol said. “There are nearly no Turks left here.”
“Patır patır, [rapidly] they are buying land all around,” Kemal responded, adding Russian interest for property had expanded outside the traditionally sought out areas in urban centers and by the sea.
“One Russian came in and showed me he had bought a farmland in Korkuteli that day. Sixty-thousand square meters,” Kemal continued. “I asked him if he had been there. He said, ‘No, I thought this might be handy in the future, so I just bought it.’”
Along with all-cash land sales, local realtors also noted a rise in batch apartment purchases. In March, an Antalya realtor quoted by the business newspaper, Dünya, said some Russian clients were purchasing up to 20-30 properties at the same time.
A local real estate agent told Turkey recap, such purchases are usually to secure Turkish citizenship through property, which now requires $400,000 of investments after the threshold was raised, up from $250,000, in April. The same real estate agent estimated about 10 percent of their Russian clients in Antalya this year were specifically buying real estate to acquire citizenship.
The price is rife
That rising demand, combined with a depreciating Turkish lira, high inflation and broader global dynamics, has seen real estate prices grow dramatically for both renters and buyers throughout the country. Local realtors said it was not uncommon to see landlords raise rents fivefold on residential and commercial tenants in Antalya this year.
According to media reports, some landlords raised prices so much on incoming Russians and Ukrainians, that some tenants left Turkey without paying their rents.
Still, the rent hikes have prompted officials to act. Turkish Pres. Recep Tayyip Erdoğan earlier this month announced a housing allocation program to address rising prices. Separately, residence quotas went into effect July 1, with aims to ban new foreign renters from 1,200 neighborhoods across Turkey.
The latter was the result of growing anti-migration sentiments in public discourse, rising in parallel with citizens’ economic worries, and most often directed towards Syrian and Afghan refugees. Though in Antalya, the quotas also impact Russians and a smaller number of Ukrainians, with restrictions placed on 10 local neighborhoods, including Liman.
Realtors told Turkey recap the quotas immediately froze rent prices within restricted neighborhoods, but raised rents in adjacent areas, though most said it was too soon to gauge the rule’s true impacts and noted it did not prevent foreigner from buying homes in restricted areas.
“The problem in this area [Konyaaltı] is there are no new houses, there are no new buildings, and people like this area since it’s near the sea, it’s a development area, it’s a good area,” said Sergiy Volchenkov, managing director at Tolerance Homes, a national real estate agency headquartered in Antalya, which focuses on Turkish property sales to foreign buyers.
“Because of this, the prices will not reduce much,” he continued, saying property sales at his company grew three-to-five times since February.
In addition to foreigner clients, Turkish buyers from surrounding provinces, like Isparta, Burdur and Afyonkarahisar, have been driving up home sales and prices over the last two years by seeking high-value rental properties in Antalya, according to Kemal Akgül, director of the Antalya Emlak Pazarı real estate agency. Akgül also held the view current prices would not retreat.
“If lira exchange rates stabilize, and then if contractors believe they can now purchase construction materials and start new projects, then the prices could stabilize, but not go down,” Akgül said.
Sanctions or sanctuary
In contrast to the realtors above, İsmail Çağlar, president of the Antalya Realtors Chamber, said Antalya’s real estate bubble had already popped and prices would soon go back to “normal.” He also expressed general support for foreign interest in Turkish real estate and saw it as a boost to the nation’s economy.
Asked if large property sales might attract negative attention from Western nations, Çağlar abruptly changed tone, responding: “We love all human beings because god created them. We have no problems.”
To clarify, Turkey recap asked: “What if Western nations find problems with large money transfers to Turkey from sanctioned individuals?”
Çağlar answered: “All types of investments are welcome. Our door is open. We’re a Muslim country, we do not discriminate against anyone based on race or religion or anything. We accept everyone.”
The statements echoed those made by Turkish FM Mevlüt Çavuşoğlu in March. When asked at the Doha Forum if Russian oligarchs were welcome in Turkey, Çavuşoğlu said, “If Russian oligarchs ... or any Russian citizens want to visit Turkey, of course they can.”
He added, “If you mean whether these oligarchs can do any business in Turkey, then of course if it is legal and not against international law, I will consider it.”
The line between legal and illegal will remain a focus point for international monitors who fear that distinction could blur after Russian Pres. Vladimir Putin and Erdoğan vowed to increase economic cooperation at their Aug. 5 meeting in Sochi.
The results of those agreements remain to be seen, though on his flight back, Erdoğan told journalists five Turkish banks had adopted Russia’s Mir payments system, which allows Russians in Turkey to use their cards for payments at a time when Visa and Mastercard suspended services in Russia.
The move might help tourists, but Western officials have said the Mir system is not a top concern for sanctions evasion since it mostly serves small purchases by average citizens while many Russian elites have already moved their funds outside the Russian financial system.
Throughout interviews with Antalya realtors, Turkey recap noted several recurring themes: 1. Russians used to shop mainly for summer homes, but are now increasingly buying homes to stay year-round. 2. Few in the sector expect residence quotas to achieve anything. 3. More high-income earning Russians are shopping for homes in Antalya than in previous years.
“Our customers used to be mostly middle-class or upper-middle class in Russia, but now customers from higher up are coming, too,” one realtor said, referring to wealthy Russians.
Asked if those “higher up” clients are coming to Antalya, as well, the realtor said: “Yes, because they cannot go to Europe nowadays.”
Turkey recap is supported by readers via Patreon, where members get access to our back channel, news tracking tools, calendar and more.
Diego Cupolo, co-founder + editor @diegocupolo
Verda Uyar, freelance journalist @verdauyar
Ingrid Woudwijk, freelance journalist @deingrid
Gonca Tokyol, freelance journalist @goncatokyol
Batuhan Üsküp, editorial intern @batuskup