Negative economic growth see a huge decline in Turkey’s housing sales as sales in credit nearly comes to a halt

IT WAS YET another month of doom and gloom for the Turkish housing market as sales continue to drop.

According to the Turkish Statistical Institute (TUIK), housing sales in Turkey sharply fell by 24.8% decrease in January 2019.

The institution said only 72.937 houses were sold. The figures continued to show a grim picture for mortgaged housing sales, falling with a high of 77.2%  in sales. Due to rising interest rates, housing sales accumulated through credit in the same period are reportedly coming to an end. The interest rate is around  1.98%.

Meanwhile, the construction sector, which employs more than 2 million workers, has been continuously declining at 10% each month. In order to boost the declining construction sector, Turkey had enacted a new law, granting citizenships to foreign investors.  Foreigners who invest $500,000 in Turkey and deposit $500,000 in Turkish banks or buy real-estate worth $250,000 acquire the right to lifetime citizenship.

The 24.8% sharp decline on housing sales in January has raised serious concerns as it has implications for both the housing and construction sectors, which have also been hit hard by the current tough economic climate in Turkey.

Istanbul ranks first in housing sales

Turkey’s economic hub, İstanbul, has ranked first again with 13 455 house sales at an 18% share, Turkish capital city of Ankara comes second at 9.3% of sales while the sales are at 5.2% in the southwestern Turkish city of İzmir.

The provinces with the lowest number of housing sales were Ardahan with seven houses, Hakkari with nine houses and Bayburt with 17 houses, respectively.

A total of 6 537 houses were sold in January with mortgage system, showing a  77.2% decline of mortgaged sales, according to TUİK figures.

The percentage of mortgaged sales was 9% of total sales in Turkey.

A massive 81,9% dramatic increase of houses bought by foreigners

On the contrary to the decline in domestic sales, housing sales to foreigners dramatically increased and reached 81,9%, with 3168 houses. Iraqis are ranked first with 605 houses, followed Russian at 305 houses. Iran is third with 195 houses, in fourth place is Afghanistan with 151 houses.

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