Turkiye: Prospects in Real Estate and Tourism for season 2023

Turkiye continues to be one of the most sought after travel destinations in the world. In 2023, 60 million tourists are expected and industry revenue of $56 billion. Such forecasts were announced by the Minister of Culture and Tourism of the country Mehmet Nuri Ersoy. In 2019, 51.5 million tourists visited Turkey, the income was $39 billion, and in 2022, with the same number of tourists, Turkey received $46 billion. In 2022, Turia ranked third in tourism in the world, thanks to an established service delivery system after the pandemic.

Prospects for Türkiye's Tourism Industry in 2023

According to the ATOR Analytical Service, 42% of Russian tourists choose Turkiye for their holidays, although high prices this season affect demand. Türkiye remains one of the few available destinations. At the same time, Cyprus and Greece without Russian tourists are forced to dump in order to attract Europeans. For Russians, tours to Turkiye cost about 20% more than for Europeans, as Alexan Mkrtchyan, Vice President of the Alliance of Travel Agencies, said. In 2023, 6 million Russian tourists are expected.

At the same time, Turizm Guncel, hotels are now offering 5-20% discounts to tourists from Germany. The newspaper also reports that in April-May, prices for tourists from the Russian Federation began to decline by 20-30%. Due to price increases, many tourists have abandoned early bookings. But, despite this, Turkiye is still among the leaders in the industry. And now hotels have started offering discounts.

According to Voskan Arzumanov, General Director of the TEZ Tour operator, 70% of all tours fall on the elite segment of 5 stars, 25% of vacationers from the Russian Federation choose 4 stars, and only 5% choose three-star hotels.

It is noteworthy that from January to May 2023, the number of cruise tours in Turkiye increased by 114%. Such a holiday was chosen by 299 thousand people, said the Minister of Transport and Infrastructure of Turkiye, Abdulkadir Urologlu. This was facilitated by the opening of the Istanbul port of Galataport in 2021 and the end of the coronavirus pandemic. Tourists arrive mainly at the ports of Kusadasi, Galataport, at the Saraiburnu pier and at the port of Antalya.

From January 1 to May 31, 2023, 3.4 million people have already arrived at Antalya Airport, which is almost 1 million more than the same period in 2022. In the first 4 months of 2023, 11 million tourists rested in Turkiye, among the leaders are citizens of the Russian Federation, Germany and Bulgaria, respectively 134.94%, 18.7% and 17.45% more than a year earlier.

Despite some calm after the earthquake, inflation, rising prices for tours and fears of tourists about possible protests during the presidential elections, the industry shows positive dynamics.

Prospects for the Real Estate Market in Turkiye in 2023

Despite the increase in prices several times over previous years, Turkiye is still expected to further increase by 20% in foreign currency. After the election, the Dollar and Euro are skyrocketing, prices are rising in many industries. The President of the Association of Real Estate Consultants of Turkiye, Hakan Akdogan, announced the projected growth. He connects this with the possible growth of the dollar to 27-28 lira. Morgan Stanley predicts that by the end of 2023, 1 USD will trade at 28 Lira.

According to the Global Property Guide rating for the 1st quarter of 2023, in general, the real estate market is seeing a fall in prices. At the same time, high inflation still creates the feeling that prices continue to rise. What formally it is - in 42 of the 60 countries under consideration, real estate prices have increased nominally on an annualized basis. But if inflation is taken into account, the growth occurred only in 19 countries.

In Turkiye, prices in national currency rose by 132% over the year (by 54% adjusted for inflation). It is noteworthy that during the period of the quarter when the earthquake occurred and the president was elected, prices did not fall, but increased by 8%, adjusted for inflation.

In Dubai real estate has risen in price by 12%, in Georgia - by 10.6%, faster than inflation. In Europe, prices increase in only 7 of the 27 countries surveyed. If inflation is taken into account, prices are falling in Germany, the UK, Italy and France.

In May 2023, foreigners purchased 3,167 objects in Turkiye, which is 2.8% of the total number of transactions. Typically, on average in the country, foreign buyers account for 4% of the market. Leading provinces: Antalya, Istanbul, Mersin. Most often, Russians, Iranians, Ukrainians, Germans, Iraqis, as well as citizens of Kazakhstan, Kuwait, Azerbaijan, Saudi Arabia and the United States buy property in Turkiye. In May, total sales increased by 34%.

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