Housing sales in Turkey drop 19 pct in first quarter of 2012

ISTANBUL - Hürriyet Daily News

A newly developed neighborhood in Istanbul is seen in this file photo. Latest official data show that home sales have slowed down considerably in the first quarter of the year compared with the previous quarter. DAILY NEWS photo, Hasan ALTINIŞIK

Housing sales in Turkey fell in the first quarter of 2012 by nearly 19.2 percent compared with the previous period, the Turkish Statistical Institute (TÜİK) said in its quarterly report, released yesterday.
 The figure, however, was still up about 5.5 percent from the same period last year.

A total of 96,092 houses were sold in January, February and March, according to the TÜİK data.

In the first quarter of 2012, no region saw an increase in housing sales compared to the previous period, TÜİK said. The largest decreases in home sales were recorded in eastern and Black Sea provinces. The greatest decrease in the rate of house sales compared to the previous period was in the region comprising the eastern provinces of Erzurum, Erzincan and Bayburt, which saw a 48.25 percent drop in the quarter. This was followed by a 41.25 percent plunge in the provinces of Ağrı, Kars, Iğdır and Ardahan, and a 38.73 percent drop in Van, Muş, Bitlis and Hakkari.

Kastamonu, Çankırı and Sinop provinces in the central Black Sea region registered a 38.72 percent decrease in home sales, while the eastern provinces of Malatya, Elazığ, Bingöl and Tunceli also recorded a drop in sales of nearly 32 percent.

The reduced housing sales figures come as Turkey’s Finance Ministry is working on a new regulation that envisages applying a value added tax (VAT) of 18 percent to apartments of less than 150 square meters in area. Currently the tax rate for apartments in this category is at 1 percent.

Reaction to the VAT

“The VAT can be increased a little for luxury homes, but for [affordably priced housing] the rate should remain at 1 percent,” Tahir Tellioğlu, the head of the Construction Contractors Federation (TİMFED) was quoted as saying by daily Hürriyet. “If this draft law is signed into law, the construction sector will contract.”

Compared with the first quarter of 2011, the number of home sales rose in 16 regions and fell in 10 regions. The highest increase in housing sales was seen in the region comprising the western provinces of Kocaeli, Sakarya, Düzce, Bolu and Yalova. This was followed by 34.45 percent in Tekirdağ, Edirne and Kırklareli, the three provinces of the Thracian region.

Sales rise in other regions

Other regions recording rising rates of housing sales during the compared periods included the eastern provinces of Mardin, Batman, Şırnak and Siirt at 32.63 percent, the western provinces of Bursa, Eskişehir and Bilecik at 28.56 percent, as well as the Aegean provinces of Aydın, Denizli and Muğla at 27.73 percent.

Eastern and Black Sea provinces also recorded the greatest drop-off in housing sales as compared with the first quarter of 2011. The highest decrease was in the region comprised of the provinces of Ağrı, Kars, Iğdır and Ardahan, at nearly 60 percent, followed by the eastern provinces of Van, Muş, Bitlis and Hakkari at 35.3 percent.

The Black Sea provinces of Kastamonu, Çankırı and Sinop registered an 18.74 percent decrease in housing sales, while the figure was down nearly 9.3 percent in Trabzon, Ordu, Giresun, Rize, Artvin and Gümüşhane.

“In the first quarter of 2012, the rate of housing sales increased by 16.95 percent compared with the moving averages of [the past] four periods,” the TÜİK report also said.