Decreasing interest rates revive housing sales, nearly 147,000 units sold in September


Turkish property sales in September, after a slump in the recent year, have enjoyed an uptick in September with the reduction of interest rates in mortgage loans by state lenders and some private banks. Accordingly, a total of 146,903 house sales in September with an annual increase of 15.4%, the Turkish Statistical Institute (TurkStat) said Wednesday.

"Istanbul had the highest share of house sales with 15.8% and 23,265 sold houses," TurkStat said in a statement.

The capital Ankara and the Aegean province of Izmir followed Istanbul with 14,906 and 8,830 house sales, respectively.

"The least house sold provinces were Hakkari and Ardahan with 19 house sales," it added.

Some 51,393 houses were sold for the first time, decreasing 14.7% in September versus the same month last year, it indicated, adding that first house sales had 35% share of all house sales in Turkey.

Istanbul – Turkey's largest city by population and a key tourist center – took the largest share of the pie with 16.2% or 8,347 house sales.

Official data showed that the capital Ankara and the Aegean province of Izmir racked up 3,921 and 2,887 total of housing sales, respectively.

Mortgaged house sales were recorded at 57,811, surging 410.2%, over the same period, making up a 39.4% share of all house sales in Turkey.

Sales to foreigners

Official data showed that property sales to foreigners decreased by 25.6% year-on-year in September, reaching 4,177 units.

Istanbul led sales with 1,924 houses, followed by the Mediterranean resort city of Antalya at 744 and Ankara with 239.

Among foreigners, Iraqi nationals topped the list with 781 houses. They were followed by Iranians with 489 and Russians with 248 house sales.

Along with the reduction in the amount required for Turkish citizenship in foreign residential sales to $250,000 on Sept. 19, 2018, approximately 40,000 houses were sold to foreigners in 2018.

Sales raise hopes for next year

Commenting on housing sales data, Real Estate Developers and Investors Association (KONUTDER) Chairman Altan Elmas said incentive mechanisms to home buyers to purchase first-hand housing need to be put into practice rapidly in the case of rising housing demand.

"The increase in first-hand residential sales in total sales will accelerate the construction, industry, service sectors and thus the Turkish economy, also contributing to both growth and employment," he said.

Mortgaged sales across Turkey climbed by 69% compared to the previous August and over 400% compared to September last year, amounting to 57,811 units. This figure in Istanbul also increased by 99% compared to the previous August and 368% compared to September of last year, reaching 8,719 units.

"The decrease in housing loan rates started when the central bank cut interest rates first on July 25, 2019 and then on Sept. 12, 2019. These discounts also had a positive impact on residential sales. Provided that private banks raise their housing loan interest rates to the level offered by public banks, the market will revive further and the mobility in the housing sector, regarded as the locomotive sector, will positively affect many sectors," he explained.

Referring to housing sales to foreigners, Elmas said that the sector will surpass last year's figures, which totaled nearly 40,000 units. "We think we will easily surpass 2018 figures in foreign residential sales until the end of the year. While the share of foreign residential sales in total housing sales was 3% in 2018, this ratio rose to 3.8% in the first nine months of 2019. We are working vigorously to increase this rate and bring foreign currency to the Turkish economy," he added.

Özyurtlar Holding Chariman Tamer Özyurt also stated that after seven months of contraction, the real estate sector began to revive in August and was buoyant in September. He stressed that the sales will reach 1 million units by the end of this year. "The decrease in the interest rates also raised the mortgage sales and the trend is likely to continue through next year," Özyurt indicated.