August 18, 2023
Housing sales in Türkiye saw a recovery in July after five consecutive declines, with 109,548 properties sold, reflecting a 16.7% YoY rise driven by the low base effect. Despite this, foreign purchases remained on a declining trajectory. The Turkish Statistical Institute (TurkStat) revealed that property sales had fallen by up to 44.4% in June, a significant drop attributed to soaring prices and residents struggling to find affordable homes.
The July data from TurkStat indicated a 24.1% YoY decrease in mortgaged sales to 14,533 houses, constituting 13.3% of total sales. The housing market experienced a sharp dip following devastating earthquakes in Türkiye’s southeastern region in February, which claimed over 50,000 lives and caused widespread destruction.
Concerns of potential future tremors, particularly in Istanbul, prompted individuals to reconsider property purchases. The July rebound can be partially attributed to the low base effect from the previous year’s month, coinciding with the bayram holiday and the Banking Regulation and Supervision Agency’s (BDDK) regulatory measures.
Despite the persistent high levels, the rise in house prices has been easing over recent months. The residential property price index (RPPI) saw an annual surge of 121.25% in May, with a more modest 3.6% month-over-month increase. Households have viewed real estate as an attractive investment tool to counter stubborn inflation, which recently rose to nearly 48% due to the decline of the Turkish lira and various tax hikes.
Türkiye’s government shifted policy direction post-May presidential elections, reversing interest rate cuts to address inflation. The central bank raised its policy rate by 900 basis points, aiming to curb rising prices while ensuring monetary stability.
In the year’s first seven months, house sales in Türkiye declined 17.7% YoY to 675,327 units. Mortgaged sales also fell by 24.1% YoY to 136,063 houses. Sales to foreigners decreased 28.9% YoY to 2,801 houses in July, notably affected by Moscow’s invasion of Ukraine and Western sanctions. Russian citizens made up a significant portion of these purchases.
Antalya emerged as the top destination for foreign property purchases, with 996 houses sold. Istanbul and Mersin followed with 832 and 263 house sales, respectively. Home sales in 2022 dipped slightly by 0.4% YoY to nearly 1.49 million units, while purchases by foreigners reached a record 67,490 houses, with Russians comprising nearly a quarter of the total.
Source: Daily Sabah
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