Turkey housing loans grow by record amount this year - report

Turkish banks lent a record amount of money in the form of home loans in the first half of the year as the government sought to stimulate demand for housing.

The loans increased by 32.2 billion liras ($4.7 billion) to 230.9 billion liras between Jan. 1 and Jan. 26, Daily Sabah newspaper reported on Monday citing data from the Banking Regulation and Supervision Agency (BDDK).

That broke an annual high of 27.6 billion liras recorded in 2017, Daily Sabah said.

Turkey’s government is seeking to boost purchases of homes to help erase a housing stock that built up after a currency crisis in the summer of 2018 and to revitalise economic growth, which was hit by the outbreak of the COVID-19 virus on March 11 this year.

Daily Sabah said the high increase in loans came after state-run banks Ziraat Bank, VakıfBank and Halkbank unveiled mortgage loan packages at historically low-interest rates at the start of June. Mortgages for new homes now cost as little as 0.64 percent in interest per month, well below consumer price inflation rate of an annual 12.6 percent.

The borrowing also carries a grace period on repayments of up to 12 months, the newspaper said.

Interest in buying housing has surged but some real estate companies have increased prices by as much as 25 percent to help increase their returns unfairly, curtailing demand, said Nizameddin Aşa, chairman of the Istanbul Chamber of Real Estate Agents, according to Daily Sabah.