Skyrocketing demand for real estate witnessed in Turkey as property sales approach 1 million units in August
In August, the housing market in Turkey continued to show resilience, with a 6.8% increase in sales, reaching 143,319 units, according to data from the Turkish Statistical Institute. Despite this growth, inflation in August stood at a staggering 32.95%, offsetting the increase in housing prices, resulting in a 1.2% real decline in value.
The demand for houses for sale in Turkey reached its highest level in two years, with the demand index for homes for sale on sahibinden.com rising 5.6% compared to the previous month. This surge in demand was evident across the country, with Istanbul, Izmir, and Ankara all experiencing significant price increases.
Istanbul, Turkey's largest city, saw a 30.2% increase in housing prices, followed closely by Izmir with a 31.9% rise. However, it was Ankara that stood out, as the capital city was the only region to see housing prices increase above inflation, with a 41.1% rise.
The increase in housing prices was reflected in the Residential Property Price Index (RPPI) by the Turkish central bank, which indicated that housing prices rose 2.5% month-on-month in August. This upward trend was also evident in mortgage-backed sales, which jumped 45.2% in August, supported by the central bank's recent interest rate cuts.
Despite the growth in the market, mortgages still made up only 13.8% of total sales between January and August. This suggests that the majority of transactions involved second-hand properties, with new homes accounting for 30.6% of total sales.
The Turkey Real Estate Investors Association (GYODER) has called for an increase in international funding and incentives for foreign investors in the real estate market. This demand comes as Russians, Iranians, and Germans remained the leading buyers for houses in Turkey, despite a 19.8% decline in sales to foreigners in August.
This vibrant housing market in Turkey, despite the challenges posed by inflation, continues to attract both domestic and foreign investors. As the market evolves, it will be interesting to see how the government responds to the demands of the Turkey Real Estate Investors Association and how this impacts the future of the housing market in Turkey.
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