Turkey’s construction sector on verge of crumbling - analysis
Turkey’s construction industry, once the was the driving force of the country’s booming economy, has been hit by a hard recession following the collapse in the country’s currency and surging interest rates, Voice of America reported.
A hike in cost of imported materials, massive interest rate hikes, which increased loan repayment costs while drying up demand for new homes have all worked to damage the sector, the article stressed.
"At least at half of these builders will exit or the market or go bankrupt,” VOA quoted analyst Atilla Yesilada of Global Source Partners, as saying. ‘’There is a huge oversupply in particular in the luxury sector, which cannot be liquidated. The government has tried several mechanisms that didn’t work because they don’t have the money.”
Recent figures by the Statistical Institute of Turkey support this view, showing that the construction sector – an employer of more than 2 million people that alongside the automotive industry is one of the two key drivers of the Turkish economy – is on the verge of collapse, with the number of new building permits given by councils between January and September this year dropping by 41.4 percent since last year.
One construction worker told VOA that he is owed about $40,000 and many suppliers and contractors are also owed money.
The crisis has seen many families losing their homes in places like İstanbul’s Fikirtepe district, where 2,000 families gave up their old homes in exchange for the promise of new apartments in massive developments built on the land where their houses stood.
“At 60 years old I have been kicked out of my home, my household, my land,” one woman said. “All these contractors... men with briefcases, came, lied and embezzled people and had families sign away their lands and now they are not building.”
Despite state building projects pushing forth in a bid to keep the construction industry alive such as the opening of Istanbul’s new airport, they risk being dwarfed by the size of construction sector crisis, VOA stressed.