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Revised April, 2024 – Resource, Turkey iResidence
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HOME SALES DECREASED BY 8.7 PERCENT IN OCTOBER! HERE IS THE MAIN REASON
Home sales fell by 8.7 percent in October 2023. So what is the main reason for the decline in housing sales? Turkey iResidence told about the curious things.
iResidence used the following statements in its statement: “When we look at the TURKSTAT housing sales data announced today, there is an 8.7 percent decrease in October compared to last month. In fact, when we evaluate this, we can also look at the annual performance framework. October January-When we look at the period from this point of view, it is possible to say that there was a similar decline in housing sales. October January-October period compared to the same period of the previous year there is a decrease of 14.3%. it amounted to 993 thousand 835. It looks like we will end the year with a 15 percent decrease in home sales compared to last year.
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THE SALES FIGURE HAS EXCEEDED 2.5 MILLION
I can say that the limit of 2 million in total real estate sales has been exceeded. The number of sales in all types of real estate, including residential buildings, has exceeded 2.5 million throughout Turkey.
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HOW DOES THE RISE IN LOAN INTEREST RATES AFFECT THE MARKET?
One of the most important reasons for the decline in housing sales is difficulties in accessing credit. This negatively affects the real estate production process of contractors. There are serious financing problems in housing loans due to the lack of access to mortgage loans. These loans are realized due to high interest rates.
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30 THOUSAND TL MONTHLY PAY FOR 1 MILLION TL
Dec paying the loan rates between 2.85 and 3.25 in the market at the moment, a person who takes out an average loan of 1 million TL needs to make a monthly repayment of 30 thousand TL. This does not remain within a payable framework for many customers.
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CITIZENS ARE DIRECTED TO RENT
We can say that deposit rates have also increased at a high rate. we can say that the fact that an interest rate of around 30 thousand TL is given to 1 million TL deposits leads citizens to rent rather than buying. Rental prices have been increasing at a higher rate than housing prices in recent years. When we look at the recently announced CBRT housing price index, we can say that prices increased by 89.20 percent in nominal terms, and by 17.8 percent when we look at it in an inflation-adjusted way.
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WILL HOUSE PRICES RISE?
Due to the increasing costs, there is no possibility for housing manufacturers to reduce the cost. We think that housing costs will increase due to the cost of labor, fuel and energy in the coming period, when square meter costs reach $ 700.
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WHAT ARE THE PRICES IN ISTANBUL, ANKARA, IZMIR?
Currently, the average house price per square meter in Turkey has reached 29 thousand TL, while there are 43 thousand TL levels in Istanbul, 33 thousand in Izmir and 22 thousand TL levels in Ankara. There is a significant decrease in mortgage sales. Within the total housing sales, the level of mortgage sales decreased by up to 5.9 percent. This is clearly affecting the housing sector.
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ZERO AND USED HOUSE SALES HAVE DECLINED, WILL THIS REDUCE PRICES?
When we look at first-hand home sales and second-hand sales, we assess that sales occur in second-hand real estate at the level of 70 percent in the market. According to the latest data, second-hand house sales were realized at about 68.8 percent and first-hand house sales at 31.2 percent. We do not expect a serious decline in prices after this date. The reason is this: there is a housing cost that has increased. There is a land cost that will not Decelerate after that. If you need to buy housing for this period, we can say that currently the housing is at an affordable level.
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THERE ARE OPPORTUNITIES IN SOME TURKEY REAL ESTATE
There are some real estate opportunities at the moment. There are some properties that were sold for today’s construction cost. An announcement is expected by the government regarding housing loans. Will the loans be opened to first home buyers, or will they not be opened with other criteria?’ the clarification of this will eliminate uncertainty in the market. Citizens’ waiting times and uncertainties will also become clearer.
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HERE IS THE STEP THAT WILL ACTIVATE THE SECTOR!
The contractor factor should not be forgotten. As housing sales fall, contractors are losing their enthusiasm to enter the construction sector. We need a sustainable mortgage system. We need to offer a mortgage model to people who will buy a house for the first time, which will create an advantage for them when buying first-hand and second-hand housing. This model may be lower than the current loan rates, but we should not forget its contribution to employment and production. Special advantages can be provided to those who want to support their accumulated deposits in real estate with a balance in their KKM accounts. It may be possible to ensure a sustainable housing production.”
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