Property Prices in Turkey
The Turkish housing market is facing an unprecedented crisis due to high inflation and skyrocketing prices. In Istanbul, home sales fell 15.1% year-on-year in November 2021 and the Turkish Housing Price Index surged by nearly 190% in September compared to the previous year. The yearly rise in Istanbul was 212%. The Central Bank of Turkey also reported a 184.6% increase in residential property prices in August 2022 year-on-year. The highest price increase, 231.3%, occurred in Antalya. In Istanbul, prices increased by 210.8%.
Turkey Interest Rates
The Government of Turkey plans to announce new low interest rates for credit, which could affect the real estate market in Istanbul. This is likely to attract more buyers because they will be able to access mortgages with lower interest rates. Consequently, this could result in an increase in demand and a rise in prices. However, experts believe that high construction costs and limited stock of properties in Istanbul could limit the extent of the price increase.
Forecast for Istanbul Turkey Property Prices in 2023
Almost all analysts expect property prices in Turkey to continue to rise in 2022. One reason is the shortage of properties because a large number of flats and houses have been sold. Additionally, residential property prices in Turkey are rising every year due to increasing construction costs and inflation. This is confirmed by data from Eurostat and the Central Bank of Turkey.
So What Does This Mean?
Turkey’s property market is expected to remain strong despite low interest rates due to construction costs linked to the US dollar because most materials are imported. The typical 50% down payment required for most mortgage loans reduces the risk of attracting unreliable borrowers and creating a market bubble.
In conclusion, the announcement of low interest rates is likely to further fuel the Turkish property market, but the impact on prices may be limited due to high construction costs and a limited supply of properties in Istanbul. Despite these challenges, the Turkish property market is expected to remain strong due to a combination of low interest rates, high construction costs linked to the US dollar, and the typical 50% down payment requirement for mortgage loans. These factors are likely to keep the market stable, even as prices continue to rise.