Rebound in home sales likely to continue in coming months

ISTANBUL

The Turkish housing market, which saw a steep contraction in the first half of 2024, has been showing signs of revival.

Home sales plunged month after month earlier this year due to high loan costs and high prices. Moreover, consumers, who generally view real estate as an investment, turned to other options available to make financial gains, which also depressed demand for homes.

But the outlook in the housing market started to change. In August, home sales increased by 9.9 percent annually to more than 134,000 units after surging 16 percent year-on-year in the previous month to 127,000 units.

Demand for homes is gathering pace and this trend is likely to continue, according to Onur İncehasan, general manager of Vakıf Real Estate Investment Trust.

People are taking their money out of deposit accounts to buy homes, İncehasan said.

He, however, noted that home supply was not growing fast enough.

“Developers usually finance new projects with revenues from home sales. As sales were weak, many developers put new projects on hold,” he explained.

For instance, in Istanbul, which needs 150,000 new homes each year, only 100,000 homes are being built, İncehasan said, adding that home ownership declined from 60 percent to 50 percent.

In the face of insufficient supply, home rents are rising, he said.

Meanwhile, Vakıf REIT started to sell homes at its VSancaktepe project in Istanbul.

The company will spend 2.5 billion Turkish Liras on the project to build 312 homes and 20 commercial units.