Borrowing costs

High borrowing costs and pandemic push Turkey home sales to 5-month low

Sales of houses in Turkey plunged to a five-month low in May, hurt by high borrowing costs and the pandemic.

The data of the Turkish Statistical Institute (TurkStat) show that 59,166 residential properties were sold last month, compared to 95,863 in April. On an annual basis, May figures are up 16.2%, although last year’s figures were very low due to initial measures taken to contain the spread of Covid-19.

With the Medium interest rate on a home loan after hitting around 18% last year, lending costs are weighing on demand from local buyers. The data showed, however, that home sales to foreigners also fell to 1,776 in May from 4,077 in April.

Iraqi nationals top the list, purchase of 239 houses followed by buyers of Iran (231), Russia (119) and Afghanistan (98).

More than half of the residential properties bought by foreigners were in Istanbul, followed by Antalya on the south coast and Ankara.

Despite the drop, market watchers expect foreign demand to pick up over the summer as the falling value of the Turkish lira makes home prices in the country more attractive to foreign buyers.

the turkish lira gained ground over the past seven days, but was down around 26% on the year.

In the first quarter of the year, house prices in Turkeyincreased by 32%the highest jump in the world – but once inflation is eliminatedgains are limited to around 16%.