Hamide HANGUL
The sharp decline in housing sales gave way to an increase. The highest sales since the beginning of the year were achieved in August with 134,155 units. 127,088 units were sold in July. In August of the previous year, it was 122,091 units. Thus, a monthly increase of 5.6 percent, an annual increase of 9.9 percent and a 1.1 percent increase in the first 8 months was achieved. Sector representatives pointed out that despite the annual increase in construction costs of 46 percent, real prices decreased by 11.6 percent due to stagnant sales. Sector representatives, who said that consumers who have savings in their hands, especially in anticipation of interest rate cuts and price increases, started to buy houses, pointed out that there could be a 50 percent increase in prices, and said, “Those who see the discount now and expect a price increase in the future have turned to housing. The under-the-pillow economy has become active. Those who earn from deposit interest, gold and foreign exchange have started to invest their money in housing.”
Demand will increase as loan interest rates fall
Ramadan Kumova, President of the Association of Housing Developers and Investors (KONUTDER), pointed out that housing sales increased by 16 percent in July and 9.9 percent in August, and said: “The recovery trend in sales has begun. If this trend continues, we will close the year with higher sales compared to 2023. Despite the fact that the share of credit sales in total sales has decreased to 10 percent, the reason behind the increasing sales trend is that home buyers, who see that cost-based price increases are inevitable, evaluate today’s pricing as an opportunity. Producers are trying to continue their sales by assuming the costs, but this situation is not sustainable in the medium term. Home buyers, who are aware of these costs assumed by producers, have entered a behavioral trend towards purchasing without further postponing their housing investment. With the decrease in the housing loan interest rate, which is currently very high, in the near-medium term, the demand for housing will increase rapidly. We foresee a decrease in housing loans around November 2024. “With the reversal of the picture in mortgaged housing sales, sales will increase and I think we will enter a recovery period in the housing sector in 2025. We predict that the total of foreign real estate investments coming to Turkey will fall below 2.5 billion dollars by the end of 2024. This decline affects the Turkish economy with a decrease of 4 billion dollars on an annual basis.”
Deposits and gold investments are coming back home
TÜGEM Founding President Hakan Akdoğan: “We have an under-the-pillow economy, there is currently a movement in the under-the-pillow economy. Gold has gained value, it has reached the 3 thousand limit, those who have been making good money from there or from deposits for months are turning to real estate purchases. Those who earn from gold, foreign exchange, and deposits, those who take advantage of the current stagnation in real estate and anticipate a price increase are showing interest in housing. On the other hand, there is an expectation that the US will cut interest rates, which means an increase in commodities. Therefore, since it is difficult to access credit in real estate, the rate of price increase in housing has slowed down. There are good opportunities in housing right now, there are sales with 150, 140, 160-month terms under suitable conditions. We are in a period when second-hands in particular are in high demand. Those who have savings, whether they are vehicles, money or commodities, have turned to purchases by seeing the opportunity prices in real estate. The removal of the 25 percent rent limit has increased the appetite in terms of both rent and value increase.”
They took action in anticipation of a price increase
Bahaş Holding CEO Abdüssamet Bahadır stated that despite increasing costs, negative economic conditions and supply not being able to meet demand, sales figures are on the rise. Stating that demand for housing is still very strong, Bahadır said, “However, due to high interest rates in credit sales, we will not see positive results for a while. The stagnation of housing prices has encouraged investment for some. They probably took action in order not to be affected by possible price increases.”
They want to evaluate this period
Hakan Şişik, Chairman of the Anatolian Side Construction Contractors Association (AYİDER): “As the numbers show, investors with money and those in need of housing are turning to housing. Right now, interest rates are quite high. Although there has been a slight decrease, there is an interest rate above 3 percent. We can say that this is a negative period for housing sales on credit, but it is an opportunity period for those with cash. There is a deterioration in prices, and since the sector also needs cash flow, discounts are being provided to those with cash, and everyone now knows that interest rates will decrease and housing prices will increase after a while. Therefore, people want to take advantage of this opportunity period.”
It will not lose its charm
Helmann Holding Board Chairman Selman Özgün stated that those with cash in hand took action with the expectation that prices would increase, and said, “Indeed, the real declines in housing prices in recent months have mobilized the waiting investor. On the other hand, we also see that housing will never lose its appeal compared to alternative investment vehicles.”
Buyers who want to make a bargain purchase have become active
The Chairman of the Board of Directors of the Istanbul Real Estate Brokers Club Business Cooperative (İstebKOOP) Ulvi Özcan also stated that while construction costs were increasing, housing prices were decreasing in real terms, and said, “This situation has mobilized prospective buyers who want to make an opportunity purchase, and rumors that interest rates will decrease were especially reflected in sales figures.” Özcan, who stated that if interest rates really decrease, this situation will also mobilize prices, said that demand will continue to be high. Özcan stated that the annual housing need is around 850 thousand, but production is insufficient, and emphasized that the focus should be on the production of housing for sale and rent and that there should be a healthy housing policy.
Interest rates should be lowered
Özyurtlar Holding Board Chairman Tamer Özyurt stated that the upward movement in housing sales figures started in the second half of the year and explained that the increase experienced in July continued in August. Özyurt emphasized that there was an increase in first-hand and second-hand housing sales last month, and said, “The fact that the high increase in housing prices has stabilized for a while has mobilized those who have money. However, in order for this increase to spread to a wider segment, prices should not enter an upward trend and loan interest rates should be reduced to a reasonable level and payment conveniences should be provided.”
Increase in new projects may exceed 50 percent
Akkuş Real Estate Board Chairman Abdulkadir Akkuş: “High interest rates have significantly reduced housing purchases with credit. Since the market is stagnant, contractors are not increasing prices, to keep the wheels turning. On the contrary, prices have started to fall. There are those who have reduced prices by 50-30 percent on housing at first hand. Therefore, it is the right time to buy a house. We think that it is an opportunity period especially for those who pay high rents. Right now, they can buy a house with their own resources such as money, gold and foreign currency. The return on investment in a house has now decreased from 24 years to 12-13 years. On the other hand, costs have also increased a lot, therefore new projects are not being opened much. Everyone is trying to melt down their stocks. There are those who turn to housing from KKM. Because they need to tie up the money during that return. Since there is not much return in foreign currency, they turn to gold and housing. When interest rates reach 30 percent annually and 2.5 percent monthly, there is a movement in housing. If these levels of credits come, when people finish their stock, the increasing construction costs will start to be reflected in the prices, and it may be reflected as a 50-60 percent increase in prices. In newly manufactured houses. There may even be 100 percent increases. Today, the cost of producing a square meter of house is not below 1,700-2 thousand dollars. When new projects start, the cost increases will start to be reflected in the prices.”
Source: www.dunya.com
