Turkish home sales drop to one-year low

Sales of homes in Turkey declined to the lowest level in a year during May after cases of COVID-19 spiked to a record, forcing the government to impose a tighter lockdown on the population through the first half of the month.

Turks purchased 59,166 homes in May, a decline of 38.3 percent from April, the Turkish Statistical Institute reported on Monday. The number of homes bought via mortgage financing fell by an annual 42.9 percent to 10,560.

The construction industry has spurred Turkey’s economic growth over the past decade. But a currency crisis in 2018 led to an explosion in unsold homes. The lira has continued to weaken while inflation has remained in double digits, acting as a drag on demand.

The average interest rate on a home loan has risen to almost 18 percent annually from as low as 9 percent last year, when state-run banks helped the government engineer a borrowing boom by providing loans carrying interest rates less than annual inflation.