Construction costs rise nearly 67 percent

ANKARA

The annual increase in construction costs gathered pace in August even though the monthly rise slowed, the latest data have shown.

The construction cost index was up 66.5 percent from August 2022, after rising 62.3 percent in July, according to the figures from the Turkish Statistical Institute (TÜİK).

However, the index, which advanced 16 percent month-on-month in July, rose by 4.6 percent in August from the previous month.

Labor costs increased by 1.9 percent monthly, bringing the annual rise to more than 113 percent. The index of construction materials was up 5.8 percent month-on-month and 52.2 percent year-on-year.

The headline building construction cost index climbed 65.5 percent from a year ago, TÜİK said.

Experts have been arguing that problems with accessing loans and elevated house prices, which have been rising also due to higher construction costs, curb demand for residential properties.

House sales fell by 1.1 percent in August from a year ago, TÜİK reported earlier this month. In the month 122,000 were sold with mortgaged sales plunging more than 26 percent only to 16,400 units.

In the first eight months of 2023, a total of 797,418 homes were sold, pointing to 15.5 percent decline from the same period of last year.