Turkey has changed its law to offer citizenship to foreigners who buy property worth at least $1m in the country.
The decree on the changes published in Turkey’s Official Gazette on Thursday also grants citizenship to foreigners who make a fixed capital investment of at least $2m, keep at least $3m in a bank account for at least three years or create at least 100 jobs in the country.
Ugur Civelek, a Turkish economist and columnist, said the changes mainly sought to increase property sales, a crucial part of the Turkish economy and a financial sector suffering from excess supply.
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“The excess supply in the real-estate market creates vulnerabilities in the country’s financial sector. The real estate’s share in total bank loans is very large and keeps on increasing. A sharp fall in the real-estate business might push Turkish economy into debris,” Civelek told Al Jazeera.
The Banks Association of Turkey says the share of real-estate loans used through financial institutions was 37.7 percent and the highest in the total personal loans used in October 2016.
Turkey’s real-estate sales increased 4.5 percent to 1.2 million properties in the first 11 months of 2016 over the same the same period of 2015, according to Turkey’s official statistics agency, TUIK.
However, the sales of properties to foreigners saw a 19 percent decrease in the first 11 months of the year, dropping from 20,607 to 16,727.
In both years, Iraqis, Saudis, Kuwaitis and Russians bought the highest number of properties.
Analysts say the drop in sales to foreigners is a direct result of the security concerns in the country.
Turkey, a tourism hotspot that historically attracted foreigners, has experienced a bloody year of attacks that have left hundreds dead and put the country on high alert.
Kurdish armed groups and suspected Islamic State of Iraq and the Levant (ISIL, also known as ISIS) fighters have been blamed for the bombings and gun attacks.
The country also saw a failed coup attempt in July that killed 240 people.
Turkish lira loses value
The timing of the decree corresponds with a period when the Turkish lira depreciated significantly against the US dollar in a short period of time.
The lira dropped more than 10 percent against the dollar in the first 12 days of the year on top of the 17-percent slump recorded in 2016.
Civelek said the government sought to use the citizenship offer, at a time when the lira is losing value, to increase sales to foreigners.
“With this move, Turkey aims to attract more foreign financial resources, which it is lacking, into the country and ease the excess supply of real estate.
“In terms of foreign currency, the real-estate prices have decreased significantly in Turkey [because of the fall of lira]. The expectation is to attract demand in such an environment,” he said.