Buying Citizenship: A Boon to District-Level House Prices in Istanbul

Abstract

Citizenship by investment (CBI) programs have recently garnered significant academic and media attention. Turkey introduced such a program in 2017 that offers citizenship in exchange for investment in residential property. Through the program, thousands of foreigners, mainly from the Middle East and Asia, have purchased houses, particularly in Istanbul. Foreigners’ share of total houses sold in Istanbul almost sextupled and exceeded 10% of total sales. This study estimates the short-run impact of relatively wealthy foreigners on the residential property prices in Istanbul investing to buy a Turkish passport. It finds that the Turkish CBI program positively impacts house prices by 2% in the districts, which are likely to be favored most by immigrant investors.