Investing in Success: Turkey Ranks 4th in Europe for Foreign Direct Investment in 2023

Turkey's real estate market continues to be a magnet for foreign investors, showcasing its appeal through luxurious housing projects in major cities like Istanbul, Antalya, and Bodrum. The year 2023 has marked a significant increase in foreign investment, highlighting Turkey’s attractiveness as an investment hub.

Amount of Foreign Investment

Total Investment

In 2023, Turkey saw a surge in direct foreign investment, reaching an impressive 13.3 billion USD. This surge is a clear indicator of Turkey’s favorable investment environment.

Real Estate Sector

Out of this total, 5.6 billion USD was funneled into the real estate sector alone, making up 42% of the total foreign investments. This substantial share underscores the sector's appeal to foreign investors.

Popular Areas

Istanbul

As Turkey’s largest and most cosmopolitan city, Istanbul stands out as a top destination for investors. The city is renowned for its luxurious housing projects, from villas with breathtaking Bosphorus views to modern residences nestled within its vibrant neighborhoods. The historical allure and dynamic lifestyle of Istanbul further fuel the demand for real estate.

Antalya

Nestled on the Mediterranean coast, Antalya is famous for its summer houses and holiday villas. As a tourism hub, it offers attractive investment opportunities for foreigners seeking a slice of Mediterranean paradise.

Bodrum

Located on the Aegean coast, Bodrum is celebrated for its blue flag beaches and luxury marinas. The demand for seaside luxury villas and boutique hotels is particularly high among foreign investors drawn to Bodrum's idyllic charm.

Investor Profile 

European Investors

Investors from Germany, the United Kingdom, and the Netherlands have shown significant interest in Turkey’s real estate market. These European investors often favor summer houses and luxury residences, appreciating the blend of comfort and culture that Turkey offers.

Middle Eastern Investors

Investors from Saudi Arabia, Qatar, and the United Arab Emirates are notably keen on luxury housing projects in Turkey, with a particular focus on Istanbul and Bodrum. The luxurious lifestyle and strategic location make these areas especially attractive.

Future Expectations 

Increase in Investment

Looking ahead, Turkey anticipates a further increase in foreign investments in 2024 and beyond. The introduction of new real estate projects and investment incentives is expected to continue to attract foreign investors.

More Projects

Cities like Istanbul, Antalya, and Bodrum are set to see new housing projects featuring modern architecture and extensive social facilities. These developments will create even more attractive opportunities for investors.

The Bigger Picture

Turkey is positioned as one of the most promising real estate markets in Europe. Its strategic location at the crossroads of Europe, the Middle East, and Central Asia, combined with a large population of 85 million people, offers immense opportunities for real estate developers and investors.

Urban Renewal and Mega Projects

Urban renewal and mega projects, particularly in Istanbul, dominate the agenda for the foreseeable future. Projects like Marmaray, Yavuz Sultan Selim Bridge, Eurasia Tunnel, and Istanbul Airport highlight Turkey’s commitment to infrastructure development. The Urban Renewal and Development initiative, with a budget of 400 billion USD, aims to encompass 7.5 million housing units, significantly contributing to the sector.

Real Estate Sales

Sales of real estate to foreigners have seen a steady increase, especially since the abolishment of the reciprocity law in 2012. In 2021, a record 58,576 homes were sold to foreigners, with Istanbul leading the way, followed by Antalya, Ankara, and Mersin.

Office and Retail Space

By the end of 2021, Istanbul's Grade A office stock surpassed 5.8 million square meters, with over 1.6 million square meters under construction, including the Istanbul Finance Center. Additionally, Turkey boasts 453 operational shopping centers, with Istanbul alone housing 134, reflecting the city's vibrant commercial landscape.

Logistics Real Estate

The Marmara Region, including Istanbul and Kocaeli, has a total logistics real estate supply of 10.2 million square meters. In 2021 alone, 233,000 square meters of logistics leasing transactions were completed, showcasing the region's critical role in Turkey’s logistics network.

Economic Outlook

Turkey’s Medium-Term Program (MTP) for 2024-2026, launched by President Recep Tayyip Erdoğan, projects significant economic growth. The program aims for GDP growth of 4.4% in 2023, reaching 5% by 2026, with per capita income expected to rise steadily. Despite current inflation challenges, the program anticipates a reduction to single digits by 2026.

Turkey aims to set new export records, with targets of 255 billion USD in 2023 and 302.2 billion USD by 2026. The tourism sector is also set to thrive, with revenue goals of 55.6 billion USD in 2023 and 71.3 billion USD by 2026.

Turkey’s real estate market, with its strategic location, robust development projects, and favorable investment environment, remains a promising destination for foreign investors, poised for continued growth and opportunities in the coming years.

For more information on investment opportunities in Turkey’s real estate sector, feel free to contact us.

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