Property sales see steepest decrease in Turkey ahead of elections

ISTANBUL - Reuters

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Property sales decreased by 20.1 percent to 92,483 units in September from the same month in 2014, marking the steepest decline since July 2014, according to data from the Turkish Statistics Agency (TÜİK). 

Housing sales thus decreased for the first time over this year. 

A rise in interest rates, a wait-and-see attitude among consumers ahead of the elections and a long religious holiday played a role in the decline of housing sales across the country, according to analysts. 

Analysts expect a better performance in October due to a lower base effect, while results from the Nov. 1 will be the key in the sector numbers in November and December. 

Property sales kept increasing over this year until September with the exception of a 1.7 percent decrease in January. 

House sales increased by 15 percent in February compared to the same month of 2014, 32.4 percent in March, 42.7 percent in April,  19.4 percent in May, 19.1 percent in June, 13.5 percent in July and 6.5 percent in August, according to TÜİK data. 

“Due to a one-week long Eid holiday in September, any official transaction was made. This played a big role in the decrease across the sector,” said TSKB Property Assessment General Manager Makbule Yönel Maya. 

“In addition to this, consumers have now been in a wait-and-see mood ahead of the November elections. The escalating terror attacks have also triggered pessimism. Besides, the rise in interest rates has also negatively affected the consumer,” she said. 

Housing loan rates on the rise

Maya said the 10-year housing loan rates have increased to 1.2 percent from 0.82 over this year. 

Mortgaged housing sales also decreased by 33.5 percent to 28,684 units in September compared to the same month of 2014, according to TÜİK data. 

“Due to a lower base effect, we expect better figures in October … Amid such high rates; we do not foresee very high property sale figures in the last months as opposed to the first months. Property sales tend to rise in the last months in normal conditions, but the upcoming election results will be the key in the sector figures in November and December,” she said. 

Property sales were estimated to be around 1.2 million this year. According to TÜİK data, some 936,615 properties were sold in the January-September period this year. 

Housing sales to foreigners also decreased in September. Sales to foreigners dropped by 4.8 percent to 1,768 units in September compared to the same month of 2014.