'Plan B' for worried Turks: Move abroad

Under increasing political and economic pressure at home, thousands of wealthy Turks are buying property abroad to obtain residency permits.

al-monitor Passengers check in at a Turkish Airlines counter at Ataturk International airport in Istanbul, Turkey, March 24, 2017. Photo by REUTERS/Murad Sezer.

Topics covered

germany, greece, turkish society, turkey coup, real estate, foreign investment, turkish foreign relations, turkish economy

May 23, 2017

Since the failed coup in July, many Turks have been buying real estate in the United States and Europe to obtain residency permits. The concern grew even wider after an April 16 referendum granted the president broad powers, and there was a hike in the number of people trying to relocate.

Turks are seeking asylum in several European countries such as Germany, Belgium, the Netherlands and Norway. Germany’s approval of asylum requests from hundreds of Turkish officers and diplomats has triggered a political crisis between the two countries.

After the coup, the government declared a state of emergency and began firing and/or detaining tens of thousands of public servants, judges, prosecutors, teachers and businesspeople, as well as members of the police and military. Initially, the purges seemed to only affect suspected members of the Gulen Movement, which was blamed for the coup, but it soon became apparent that anyone in the opposition could become a target. Many people fear that the constitutional changes approved under the referendum will mean even greater pressures.

Although Turks primarily want to settle in the United States, there is also interest in Spain, Greece and other European countries.

According to New World Wealth, a leading global real estate, finance and investment agency, the number of Turkish millionaires leaving the country has skyrocketed. Its study of Turks worth at least $1 million said that in 2015, 1,000 Turks bought real estate in another country and lived there at least six months. In 2016, this number soared to 6,000. France, China, Brazil, India and Turkey are the top five countries losing millionaires. The top countries millionaires are migrating to are Australia, the United States, Canada and New Zealand.

In Spain, Turks were second only to the United Kingdom in foreign buyers of real estate in Barcelona in the first quarter of 2017, according to Lucas Fox International Properties and the Spanish National Institute of Statistics. “The Turks see Spain as a safe haven for investment, given the current political turmoil in Turkey," reads the Lucas Fox website.

Meanwhile, Greece — which grants five-year residency permits to those buying homes — has also seen a sharp increase in the number of Turkish buyers.

Because of its proximity to Turkey and cultural similarities including cuisine, Greece has become a favorite destination for Turks who are willing to forget about the historical animosity between the two neighbors. The residency permits Greece issues in return for residential purchases of at least 250,000 euros ($280,000) cover entire families.

The Times of London reported on the trend in its May 2 article, “Fearful Turks Seek New Life in Greece,” noting that the Turkish wave began after the July coup attempt but gained momentum after the referendum. Although Athens is their most-preferred city, Turkish buyers are widening their searches to the islands of Mykonos, Santorini, Rhodes and Crete.

“The political situation and insecurity felt by many Turks has translated into an investment interest in Greece,” Mina Bougonikolou, general manager of InterCase Real Estate Company, told the Kathimerini newspaper in Athens.

Deutsche Welle reported from Athens, “For hundreds of thousands of secular Turks concerned about [President Recep Tayyip] Erdogan's descent from democracy, Greece is proving a surprise escape." It said real estate agents in Athens have been inundated with Turkish clients, with a 50% increase in interest in the past year and especially since the April 16 referendum. The story quoted a Turkish-born Greek realtor who summed up the situation: “Turkey's wealthy, well-educated 1% is preparing for a 'Plan B' if things go really sour there."

International real estate consultant firms like Coldwell Banker say their offices in Turkey used to receive one or two requests a week for information about buying residences abroad. They now get dozens of queries a day, mostly about Spain, Greece, the United Kingdom and Ireland.

Turks are not only looking abroad for residential investments. During the 15 years that the Justice and Development Party has been in power, the $37 billion Turks have invested abroad includes $21 billion in industrial investments.

Opening Turkey's economy to foreign markets and its entering the global competition appear to be positive developments, but Turkey today has 13% unemployment, and all economic indicators are turning negative. Turkey itself needs new investment to boost employment.

Ali Pandir, chairman of the Institutional Management Association of Turkey, said many companies had already carried out risk analyses to map out new investment strategies before the referendum. Pandir said companies taking note of the tensions in EU-Turkey relations and the changing political environment in the country have shifted their investments to Eastern European countries, both because of their EU affiliations and also the lower costs there.

“Planes to Prague are full of Turkish industrialists nowadays," Pandir said.

As Turks increasingly look abroad, the interest of foreigners in Turkey is rapidly declining. Although the government has offered citizenship to foreigners buying real estate worth at least $1 million, the number of residential purchases by foreigners has diminished, dropping 20.3% in 2016. This trend continues today. The shrinking pools of foreigners buying real estate in Turkey are from Iraq, Saudi Arabia, Kuwait and Afghanistan.

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