As of 14th June, the minimum investment for the real estate option of Turkey’s citizenship by investment programme has increased from US$250,000 to US$400,000. The Turkish government Minister of Interior announced the price hike following a Presidential Cabinet meeting in April, which decided to increase the minimum investment requirement and give applicants a month’s grace before it came into effect.
The Turkish programme has proved to be the world’s most popular, naturalising tens of thousands of applicants and their families in the short period since 2017. It was a price reduction in 2018, from US$1m to US$250,000, that really created the surge of interest in the programme, so some are questioning whether this increase now might create the opposite effect.
The drop in price in 2018 brought the Turkish CIP in line with other comparable schemes at the time, but the CIP market and other macroeconomic changes mean the rise now makes financial sense, accounting for inflation, currency fluctuations, and the significant growth of the real estate market, across Turkey in general and in Istanbul in particular.
With the Turkish Lira (TL) in flux, local developers who do all their local and international transactions in TL need to alter their prices, and this needs to be reflected in the official CIP regulations, as that is set in US dollars rather than in Turkish Lira.
Analysts estimate the annual growth rate of the housing market in Istanbul to be around 28%-33%, making the Turkish real estate environment one of the most rapidly growing in the world.
Taymour Polding, one of CIP Turkey’s founding partners, stated: “Istanbul’s housing market is one of the most dynamic in the world, akin in its global gravitas to those of London and New York. The main difference is that we are just witnessing its explosive growth.”
For CIP applicants the position is extremely positive: “The Turkish CIP is exceptional in that applicants can actually make a profit through their real estate investment, especially when combining annual ROI and the eventual appreciation rates.”
Research suggests that investors were spending up to several multiples of the minimum anyway, and finding prime real estate in Istanbul for US$250,000 “simply isn’t realistic anymore.” He adds that potential investors, viewing properties with an eye to resale, “Never stuck to the bare minimum, and instead bought top-tier real estate for twice, and sometimes even three times the minimum, because it was a good investment, not just a route to citizenship. We have also seen a flurry of clients go for luxury real estate options in Istanbul and Bodrum worth millions of euros, so the programme is also highly popular amongst the world’s elite”.
