"The Real Estate Market: Recent Developments and Changing Dynamics"

  • Melih Alsac by Melih Alsaç
  • 8 months ago
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Current Situation of the Real Estate Market in Turkey

The real estate market in Turkey has experienced significant changes and fluctuations in recent years. In this article, we will examine the current state of the real estate market in Turkey. We will present data that should be taken into account for those considering investing and real estate owners. This data was collected by TurkStat between October and July.

Housing Unit Prices: Dollar and Gold Equivalents

One of the most important indicators of the real estate market in Turkey is housing unit prices. Especially the fluctuations in exchange rates make investors think about how to evaluate housing prices against dollars and gold.

  • In gold terms, housing prices are only 1 gram short of the 13-year average of 14 grams of gold/m². The average housing unit price is now 15 grams of gold.

  • In dollar terms, house prices have bounced back from their peak in May (1.195$/m²) to 1.002$/m² as of October. According to experts, housing unit prices in Turkey need to reach 800 $/m² to stabilize in dollar terms.
  • "Why are housing unit prices approaching real in gold terms but not in dollar terms? The main reason for this problem is that the dollar is controlled by the state. According to current expert opinions, the real exchange rate of the Dollar should be in the range of 32-34. If a dollar exchange rate at these values were provided, real estate prices against the Turkish Lira could be more stable."
    Average housing unit price in Turkey is 28 thousand₺, Istanbul 42 thousand₺, Ankara 21 thousand₺, Izmir 32 thousand₺

House Price Changes and Minimum Wage Provision

For those who invest in real estate, the change in housing prices is very important. In addition, the chances of minimum wage earners becoming homeowners should also be taken into account.

  • Istanbul falls down in real house price change!
    Yıllık reel konut fiyat değişimde İstanbul +%12 reel artış ile üç büyük il içinde, son dokuz ayda en kötü performansı gösterdi.

  • 19 years of minimum wage is required to purchase an average house. Over time, this multiplier has increased to 27 years.

When we look at these results, the average should be 15-17 years. Prices are still above average.

Real Estate Listings and Number of Houses for Sale

In Turkey's housing market, the number of homes for sale is an important indicator of the vitality of the market

  • Currently, 587 thousand houses are for sale. This number has increased due to the impact of campaigns during pandemic periods and is currently above %5.
  • “Bu veriler, satılık konut arzının oldukça fazla olduğunu ve talebin düşük olduğunu göstermektedir. Bu nedenle fiyatlar üzerinde değişiklikler kaçınılmaz görünmektedir. Fiyatlardaki dolar ve altın karşısındaki değer kaybının %10’a kadar olabileceğini gösteriyor.”

Rent Rate and Share of Mortgaged Housing Sales

The number of renters and homeowners are important indicators of the health of the market. At the same time, the share of mortgaged housing sales is also a factor affecting the liquidity of the market.

  • Kirada oturanların oranı %27’ye yükselmiştir. Son 13 yılda kiracı oranı %24 artmıştır.

  • Konut kredisi kullanımı konusunda düşüş gözlenmektedir. Eylül ayında konut satışlarının %8’inde kredi kullanıldı. Bu oran, geçmişte %30’lara kadar yükselmişti.
  • When we look at these two data, we do not find any significant findings that would increase people's interest in real estate purchases. We observe that new buyer candidates tend to postpone their investments due to the inability of people to use credit. For this reason, we can say that there has been a significant increase in tenant rates.

Distribution of Real Estate Sales and Housing Purchases by Foreigners

The distribution of real estate sales in different regions of Turkey is important for investors. We will also take a look at the statistics of foreigners' housing purchases in Turkey.

  • In the first 9 months of the year, 28 thousand houses were sold to foreigners. Although this figure is lower than the sales of the last two years, it is similar to 2020.
  • Foreigners have a share of %2.8 in total housing sales. This data shows that foreign investors are slowing down their investments. The decrease in demand from foreign investors will allow construction companies to turn to Turkish investors again. The reason for this will provide a decrease in prices is that we have observed stability in dollar-based prices, especially as construction companies turn to foreign sales. In the current conjuncture, such a situation will probably not be possible again. For this reason, the action of falling prices will continue.

This article has been written to explain the current state of the real estate market in Turkey and to provide information to investors.

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