Turkey’s Housing Market: Record Sales Amid Declining Real Value
Housing sales in Turkey have reached their highest level so far this year, despite the fact that property prices continue to lose real value against high inflation.
A total of 43,417 homes changed hands in the country' s three largest cities—Istanbul, Ankara, and Izmir—a development that points to a complex and challenging market for buyers.
Although nominal prices, i.e., the actual sale prices, have risen in these major cities, analyses show that real purchasing power is weakening.
This means that the paper increase in value is not keeping pace with the general rise in prices across the economy, and homeowners are therefore witnessing a genuine depreciation of their properties. Rising costs for buyers have become a significant barrier for many Turkish citizens.
High credit costs, combined with the requirement for substantial down payments, are making it increasingly difficult for low- and middle-income households to enter the housing market.
This creates a challenging situation for those who dream of owning a home but lack sufficient savings or access to affordable financing.
Persistent inflation is also eroding household purchasing power, which exacerbates the difficulties of saving for a deposit.
The inflationary pressure in Turkey is a primary factor behind the housing market' s paradoxical development, where increasing sales figures are met with falling real value.
The Central Bank' s attempts to curb inflation often lead to higher interest rates, which directly impact the mortgage market and make purchasing a home more expensive.
For the Turkish economy as a whole, this situation signals that while there is activity in a central market like the housing sector, underlying economic stability remains under pressure, making long-term planning difficult for both households and businesses.
Source: Haberglobal
