A Turkish-Saudi rapprochement will cast a shadow over the economy and the real estate sector

تركيا السعودية يلوا عمران ترك

A new and important stage of relations between Turkey and Saudi Arabia is expected to have positive effects on various sectors, especially the economic, commercial, and investment sectors, in addition to the development and recovery of the real estate sector in Turkey.

Turkey and Saudi Arabia decided to draw up a road map to determine the necessary steps to develop trade between the two countries, during the next six months.

Turkish media, including Cumhuriyet newspaper, quoted informed sources as saying that the agenda of bin Salman’s visit “included the signing of cooperation agreements in important sectors such as health, energy, food safety, agricultural technologies, defense industries, finance, trade, tourism, contracting and real estate.”

A new stage in the financial and business sector

The new Turkish-Saudi relations will also establish a new stage of developing and diversifying mutual trade, facilitating trade and overcoming obstacles, exploring and searching for investment opportunities in Turkey, and increasing communication and partnerships between the two sides.

The first of those steps that will have a noticeable impact on the economy, tourism, and real estate market in Turkey was Saudi Arabia’s announcement to suspend the travel ban for Saudis to Turkey, as observers indicate that this step would contribute to the development of tourism activity between the two countries.

It is expected that the necessary steps will be taken to raise the volume of trade exchange between the two countries to above $5 billion, and set the goal of reaching $10 billion in trade exchange next year, according to the official Anadolu Agency.

The new Turkish-Saudi rapprochement will contribute serious steps to evaluate investment opportunities in the fields of defense, health, renewable energy, mining, petrochemicals, construction, banking, and finance.

According to “Anadolu Agency”, “Turkish contracting companies have implemented 377 projects worth $24.3 billion in Saudi Arabia, making Turkey the sixth most accomplished country for projects in the Kingdom in terms of the project value.”

Turkey also tends to invite investment funds working in Saudi entrepreneurship to invest in start-up companies in Turkey and establish partnerships with them.

The economy is the centerpiece of the Turkish-Saudi rapprochement

The economy and investment sector topped the meetings between official figures from Turkey and Saudi Arabia, which discussed investment cooperation opportunities.

Turkish exports to Saudi Arabia reached their peak in 2015 and reached $5 billion, while the value of exports declined to $4.2 billion in 2020 and by 92 percent last year, while imports from the Kingdom increased by 79 percent.

Those interested in the investment sector believe that Turkish companies will occupy an important place in the projects of Saudi Arabia’s Vision 2030 (led and pushed by Crown Prince Mohammed bin Salman), according to “Anatolia”.

The Saudi Deputy Minister of Investment, Badr Al-Badr, expressed his confidence in the huge projects that his country is activating, explaining that these projects have enabled the development and advancement of the economy, noting that Saudi Arabia offers incentives to foreign investors, and there are large Turkish companies specializing in food production and contracting sectors, operating in the Kingdom.

He pointed out that investments between the two countries will triple in the upcoming years, especially in sectors such as tourism, production, agriculture, and even in the field of investment and real estate in Turkey.

Turkish real estate and its impact on the Riyadh – Ankara rapprochement

Expectations from sources interested in the real estate sector indicate that this sector will witness an unprecedented recovery with the imminent return of water to its courses between Riyadh and Ankara, and it is expected that the percentage of Saudis buying real estate in Turkey will increase.

Looking back a little, we find that Saudi Arabia was in the list of the top 20 nationalities around the world buying residential real estate in Turkey, along with 7 Arab countries that purchased 13.26 thousand properties in 2020, namely: Iraq, Yemen, Jordan, Kuwait, Palestine, Egypt, and Lebanon.

During this period, the Saudis owned 679 properties in Turkey, which confirms that Turkey is an important destination for Saudis and other nationalities.

In 2017, the Saudis occupied the list, along with Iraqis, in the highest percentage of real estate purchases in Turkey, who bought 3,345 homes in that period, according to data from the Turkish Statistical Authority.

At that time, the Turkish city of “Yalova” was and still is one of the favorite cities for foreigners to own real estate in. In 2017, foreigners, including Saudis, bought 1,079 homes, according to the same sources.

According to the “Al-Araby Al-Jadeed” website, the return of relations with Saudi Arabia will first be reflected in the real estate sector, the price of the lira, tourism, then the foreign trade which was greatly affected after the semi-official Saudi calls to boycott Turkish goods during the past two years.

The same website stated, “The Saudis are at the forefront of land and real estate owners in Turkey, getting ahead of the Germans and the British, their destination in tourism and the purchase of real estate is not limited to the Black Sea cities, but reaches the Yalova, Istanbul, and Bursa.”

From 2015 to 2020, citizens of the Saudi Arabia Kingdom ranked third among the list of foreigners who bought real estate in Turkey. During the mentioned period, Saudis bought between 13 thousand and 540 properties, according to Turk Press.

In 2014, Turkish sources reported that more than 300 real estate companies with Saudi capital operate in Turkey, indicating that the total direct investments coming from Saudi Arabia between 2002 and 2012 amounted to more than 1.6 billion dollars, at a time when Turkey received direct international investments. With a value of 125 billion dollars, Saudi Arabia’s share was 1.3%.

It is worth noting that Turkey receives large numbers of Saudi tourists annually, in addition to Saudi citizens owning large numbers of real estate in Turkey.

It is noteworthy that Turkey offers many privileges to investors guaranteed by the investment law, in conjunction with the keenness and willingness of Turkish officials to facilitate all procedures and provide assistance and information to Saudi investors.

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