The Investment Route in Real Estate Is Shifting: Overseas or Turkey?

Billions of dollars flowed into the Gulf, then conflict turned the picture upside down. Many investors are now asking whether the safest investment was the one closer to home all along.

A boom in overseas property

Turkish investors' appetite for overseas real estate grew rapidly in recent years. In 2025, cross-border capital reached $2.7 billion, an eightfold increase compared with eight years earlier. Investments were made in dozens of countries, led by Greece and Dubai, and consulting firms reported record revenues.

Then the balance of power in the Middle East collapsed, and the Gulf region became a conflict zone almost overnight. Dubai, marketed as one of the world's most luxurious destinations, was hit by attacks from its airports to its marina district. As tourists and residents looked for a way out, it became clear how fragile the foundations behind the marketing narratives were.

Attractive narratives, harsh realities

The case for overseas property was always the same: high rental yields, short payback periods and a safe-country image. These narratives persuaded many investors, but few set out all the risks.

Even beyond war, serious risks were always present:

• Maintenance and insurance costs
• The disadvantage of being a foreigner in legal disputes
• Growing local hostility towards foreign property owners
• "Okupa" squatting incidents in vacant foreign-owned homes in Europe
• Natural disasters in the United States leaving investors in difficulty

Why were the Gulf states so exposed?

For years, Gulf economies positioned themselves as financial hubs, offering luxury lifestyles and a meeting point for global business. Behind this economic power, however, there was no equally robust defence infrastructure. With limited military deterrence, strategic locations and high economic value made them direct targets in regional conflicts.

The lesson is clear: economic power alone is not enough. Without a credible capacity to protect it, investments are left exposed, and this directly affects the reliability of real estate in the region.

Why Turkey is coming back into focus

In periods of geopolitical uncertainty, investors' first reflex is to move towards countries they see as safer. Here, Turkey holds strong cards:

• A proactive foreign policy and resilience in crises, despite a neighbourhood of wars
• Progress in its defence industry, strengthening its safe-haven perception
• An economy with relative resistance to shocks
• Long experience in selling homes to foreign buyers and a developed legal infrastructure
• A wide portfolio: Istanbul, resort centres such as Antalya and Bodrum, and emerging areas such as Mersin
• Options across different budget ranges and segments

You can explore current options in Istanbul and Bodrum.

Stability, not returns, became the deciding factor

Recent events have shown that rental yield and capital growth are not the only criteria. Investors now weigh political stability, security perception and long-term economic resilience with equal importance, and Turkey is competitive on all three, for individual investors and institutional players alike.

What more foreign demand could mean

Rising foreign demand has a domino effect. Price movements become likely, particularly where land is limited. Growing demand triggers new projects, creating activity from construction employment across the supply chain. New residential projects in major cities and tourism centres keep the market lively, and higher foreign currency inflows could contribute meaningfully to the current account balance.

Partnership opportunities with Gulf capital

The shift affects not only individual purchases but also large projects and institutional collaboration. Changing capital flows could open the door to new partnership models between Turkish developers and Gulf capital. Structures likely to come up more often include:

• Real estate investment funds
• Project-based partnerships
• Long-term rental guarantee systems
• Revenue-sharing models

Gulf investors becoming direct partners in Turkish projects, or entering the sector through investment funds, are among the likely scenarios.

Conclusion: is the change of route permanent?

The impact of Gulf developments on Turkey's property market is still at an early stage. Industry representatives expect Turkey's weight in the property choices of both Turkish investors and foreign buyers to increase. Whether Turkey makes the most of this will depend on legal regulations, investor incentives and project quality standards, but current conditions point back towards Turkey.