Turkish real estate prices hit by politics – Gürses
Turkish real estate prices are dropping in real terms, led by housing in Istanbul, as political tensions with the United States and Germany add to financing problems brought on by the coup attempt last year.
The situation is “alarming” said Hürriyet newspaper columnist Uğur Gürses, highlighting the decline in Istanbul house values of 3.3 percent reported for the month of August, when subtracting inflation.
Sales of housing in Istanbul account for about one in six of all housing transactions, he said. Other regions where prices fell include cities and towns in Central Anatolia and the southeast of the country, while prices in Izmir, the Black Sea and Aegean region rose.
The public take changes in the value of their assets into account just as much as their personal income. Falls in rents are now being followed by a slowdown in house prices. This can have a negative effect on future consumer spending trends.
An important factor in the availability of housing loans is banks’ access to foreign credit, but borrowing conditions are tightening, Gürses said.
Politics has an impact… I have written that when the crisis with Germany erupted that there was a risk Germany would carry it to the European Commission and put stops on credits from such institutions as the European Bank for Reconstruction & Development and the European Investment Bank.