Eren Sakarya – Big Para
Created Date: December 26, 2024 14:38
The CBRT’s decision to reduce the policy interest rate to 47.5 percent is expected to increase the demand for bank loans. It is expected that banks, which had already reduced housing loan interest rates before the interest rate decision, will further reduce interest rates after the decision. Real estate experts, on the other hand, state that they expect the housing sector to revive in 2025, and state that the interest rate reduction step is very important, but the interest rate should decrease further.
The housing sector in Turkey has been experiencing a movement lately. While housing sales increased by 63 percent in November compared to the same month of 2023, housing sales amounted to 153 thousand. In the January – November period, there was a 16 percent increase compared to the same month of the previous year and the number of houses sold was 1 million 265 thousand. The Central Bank of the Republic of Turkey’s reduction of the policy rate by 250 basis points to 47.5 percent is also expected to reduce banks’ loan interest rates.
With the discount signal given by the Central Bank before, banks had already started to reduce housing interest rates last week. Before the CBRT’s interest rate decision, the interest rates on loans amounting to 1 million TL with a maturity of 120 months varied between 2.84 and 5.89 percent in banks. In addition, the Banking Regulation and Supervision Board’s 22.5 percent restriction on second home purchases causes the demand for second homes to remain low. However, experts still expect that as policy interest rates decrease, banks will update loan interest rates and applications for housing loans for first home purchases will increase.
While real estate experts state that there will be no increase in housing prices in 2024, they predict a revival for the housing market especially in 2025. Experts state that the interest rate reduction decision taken by the Central Bank is very important, but it will reach a meaningful level if the reductions continue. Moreover, according to real estate experts, housing continues to be an important investment tool.
HOUSING PRICES REMAINED STABLE
GYODER President Neşecan Çekici
We expect housing sales figures to be above 2023 in 2024. We expect 2024 year-end sales figures to be 17-18 percent higher than last year. Last year, there was both the earthquake base effect and the reality of high real housing prices. This year, the value of houses has almost not increased in real terms compared to last year, so the statistics of the last 5 months indicate that sales will be better this year. Türkiye’s housing market is the first market in Europe and the second among OECD countries after America.
For balances, project sales, that is, the first sales figures, must increase, and for this, the interest rate needle must turn downward. We also see signs of this. Real estate continues to be a preferred investment tool in Turkey. In particular, housing is seen as an important investment instrument and retirement plan. We believe that a slight decrease in interest rates will affect prices and purchasing will begin.
REVIVAL EXPECTATION IN THE HOUSING SECTOR IN 2025
With the decrease in mortgage loan interest rates, we foresee a revival in the market. We think that demand will increase as interest rates turn downwards. Real estate has always been a safe investment tool in Turkey, and this trust can be restored with the right policies.
As we move towards 2025, it is clear that Turkey must adopt a holistic policy towards the housing crisis. We repeat this issue frequently on every platform. In the long term, public-private cooperation and even division of labor on certain issues are essential to accelerate urban transformation and increase the home ownership rate to 70 percent again. Some innovative measures and regulations are required to ensure a healthier pulse of the sector and to create a multiplier effect in the economy again.
‘INTEREST REDUCTION IS PSYCHOLOGICALLY IMPORTANT, BUT IT IS STILL FAR FAR FROM THE IDEAL’
Konutder Chairman of the Board of Directors Ramadan Kumova
After a long period of 22 months, the CBRT’s decision to reduce the policy rate by 2.5% will undoubtedly have repercussions on housing loan interest rates.
In recent years, housing loan interest rates have been very high, around 3-4%, making access to housing difficult. In order to create ideal payment conditions and facilitate access to housing, interest rates must be below 1%. Unfortunately, we are far from this, but for a start, the interest rate decision announced today is a positive development. Interest rate cuts have a psychological importance for the markets and our industry, but the current discount is not enough. These discounts will only reach a meaningful level for housing access if they overlap for 6-7 months.
Today, the rate of credit (mortgage) sales in housing sales is at a low level of 14%, but in the past this rate has reached bottom levels of 4%. Even 14% is a very low level. In the current high interest rate atmosphere, housing producers took responsibility and offered their own maturity options to their customers, shouldering a very serious financing burden. This is not a sustainable situation for the sector, so we welcome the signal of improvement in interest rates.
IT IS IMPORTANT THAT HOUSING LOAN INTERESTS ARE IN A DECREASING TREND
In order for housing to be accessible and for the housing sector to regain healthy and balanced market conditions, it is critical that the rate of mortgage (credit) sales does not fall below 50%. We have been far from this rate for a long time, so faiz Discounts need to come down quickly, albeit gradually.
We see that the home ownership rate of low-income people has decreased from 61% to 48% in the last 16 years. On the other hand, low-income people who cannot own a house switch to renting. While 18 out of every 100 low-income people were renting in 2007, this number will almost double to 34.7 in 2023. When the numbers are like this, rent housing Market inflation and inflation again affect rents, creating a vicious circle. In order to meet this vital need of the society, it is very important that housing loan interest rates begin to trend downward again.
Source: bigpara.hurriyet.com.tr
