Feb 18 2019

Turkish home sales slide 25 percent in January

Sales of homes in Turkey dropped an annual 25 percent in January, reflecting a continuing slump in the housing market.

Sales fell to 72,937 units from 97,019 units in the same month a year earlier, according to data published by the Turkish Statistical Institute on Monday.

Purchases of homes secured via mortgage lending slid 77 percent to 6,537 units, representing nine percent of total transactions. Sales of homes via other methods dropped 2.8 percent to 66,400 units.

Turkey’s housing market is in a severe decline after a surge in inflation and interest rates since a currency crisis last year decimated the mortgage market, which had helped spur sales under the government of President Recep Tayyip Erdoğan. Consumer price inflation in the country stands at 20.4 percent.

Mortgage sales in Istanbul dropped 78 percent to 1,215 units, and fell 80 percent to 621 units in Ankara.

The slump in mortgage transactions comes despite efforts by the government to use state-run banks to help constructors sell excess housing stock.

Leading non-government bank Garanti is offering an interest rate of 1.75 percent monthly on a 10-year mortgage of 200,000 liras ($38,000), one of the most popular borrowing options, according to data on the website of mortgage broker hangikredi.com. Rates at Yapı Kredi bank for the same loan are 1.79 percent.  

Meanwhile, sales of homes to foreigners continued to grow. They surged an 82 percent to 3,168 units in January, with 1,361 units sold in Istanbul. Citizens of Iraq bought the most homes, with 605 units purchased, followed by Iran, Russia, Afghanistan and Jordan. Of Europeans, German citizens bought 119 homes and British citizens 76.