Turkish citizens have invested over $1.49 billion in overseas real estate in the first seven months of 2025, marking a 24.5% increase from the previous year. This surge in outbound investment has created a notable shift in the country's property market, with spending by Turkish nationals abroad now exceeding the amount foreign buyers invest in Türkiye.
On an annualized basis as of July, Turkish residents spent $2.48 billion on international property. This figure surpasses the $2.16 billion spent by foreign investors in Türkiye during the same period. This imbalance has resulted in a real estate deficit for the country, a trend that first appeared in April 2025 and continues to widen.
Key Takeaways
- Turkish citizens invested $1.49 billion in foreign property in the first seven months of 2025, a 24.5% year-over-year increase.
- Annualized overseas property spending by Turks reached $2.48 billion, exceeding the $2.16 billion invested by foreigners in Türkiye.
- Strict domestic lending rules, particularly for second homes, are a primary factor driving investors to look abroad.
- Favorable tax regimes and citizenship-by-investment programs in Europe and the Middle East are attracting Turkish capital.
- Meanwhile, foreign investment in Turkish real estate has declined by nearly 68% since its 2022 peak.
A Widening Real Estate Deficit
The flow of capital out of Türkiye's property market is accelerating. Industry representatives have noted that if the current pace of investment continues, total overseas property purchases by Turkish citizens could reach an estimated $3 billion by the end of 2025. This trend highlights a significant change in investor behavior, driven by a combination of domestic pressures and international opportunities.
The deficit first emerged in April 2025 when outbound real estate investment began to consistently outpace inbound investment. Analysts attribute this shift to rising domestic property prices, which have diminished the appeal of the local market for both domestic and international investors.
By the Numbers
The annualized investment of $2.48 billion by Turkish citizens in overseas property represents a substantial movement of capital. This contrasts sharply with the declining interest from foreign buyers, whose share of total house sales in Türkiye has fallen from 4.5% to just 1.3%.
Domestic Policies Push Investors Outward
A key factor motivating Turkish investors to look overseas is the country's strict regulations on housing loans, especially for those purchasing a second property. While first-time homebuyers can secure loans for up to 80% of a property's value, the rules are far more restrictive for subsequent purchases.
Strict Lending for Second Homes
For an investor buying a second home, the loan-to-value ratio drops dramatically to between 20% and 25%. Furthermore, these loans come with significantly higher interest rates. According to industry insiders, this policy was designed to cool an overheated market and prioritize housing for genuine residents over investment-driven demand.
However, the combination of high property prices, elevated interest rates, and stagnant income levels has made homeownership difficult even for first-time buyers. This has contributed to a shrinking domestic housing market and encouraged those with capital to seek opportunities elsewhere.
Decline in Foreign Investment
The decline in foreign interest in the Turkish market is stark. Annualized house sales to non-residents fell to 21,790 as of August, a 67.7% decrease from the record high of 67,490 in 2022. The $400,000 minimum investment required for Turkish citizenship is also cited as a factor deterring potential foreign buyers.
The Allure of International Markets
While domestic factors push investors away, several international markets are actively pulling them in with attractive policies. Favorable tax environments and residency programs are particularly powerful incentives.
Tax Advantages Abroad
Property taxes, title deed fees, and other associated charges in Türkiye are often higher than in many other countries. In contrast, markets such as the United Arab Emirates, Greece, Cyprus, Malta, and Monaco offer significant tax advantages for foreign property buyers. This difference can substantially impact the overall return on investment.
"New tax regulations expected to take effect in Türkiye in 2026 are likely to accelerate this outward trend, as investors seek more favorable financial conditions abroad," an industry analyst noted.
Citizenship and Residency Programs
So-called "Golden Visa" schemes have become a major driver for overseas real estate purchases. These programs offer residency or even a path to citizenship in exchange for a qualifying real estate investment. For many Turkish businesspeople, these visas provide the added benefit of easier international mobility.
- Greece: A property purchase of €250,000 can secure residency rights for the investor and their family.
- Spain and Portugal: Investments starting at €500,000 can open a pathway to citizenship.
These programs represent not just a financial investment but also a strategic one for individuals and families looking for greater global access and stability.
Navigating the Risks of Overseas Investment
Despite the clear attractions, experts caution that investing in foreign property is not without its challenges. Investors must conduct thorough due diligence to avoid potential pitfalls that could erode their returns.
Potential risks include lower-than-expected rental returns, which can be affected by local market dynamics and tourism trends. Additionally, costs can accumulate quickly and reduce profitability. These expenses often include:
- High insurance premiums, particularly in areas prone to natural disasters.
- Significant agency commissions on both purchase and rental management.
- Ongoing service charges and maintenance costs for the property.
Legal disputes can also be more complex to navigate in a foreign jurisdiction. Investors are advised to weigh these potential costs and risks carefully against the benefits of tax advantages and residency permits before committing capital abroad.
