Real EstateTurkiye

Rising Costs and Interest Rates Impact Real Estate Sales in Turkiye

Increasing real estate prices worry contractors as well as citizens, as they reduce real estate sales.

Gokhan Fatih Aslan, President of Sivas Construction Contractors Association (SIMDER); evaluated the developments in the real estate market.

Stating that although customer preference turned to detached houses after the pandemic and earthquake, sales were not at the expected level due to high costs, he said the following: “Construction costs are constantly increasing due to known inflation. These increases continue unabated. If it stops at one point and becomes constant, the cost will be predictable. The increase in the cost of housing and the increase in material prices increase the cost of housing. Moreover, the increase in land prices increases housing costs. The increase in labor costs also increases housing costs. The sales figure is increasing, but the purchasing power of the citizens cannot keep up with it. At this point, cheap loans at affordable rates are expected to come from banks. Banks cannot offer this loan either.”

“Detached house prices in Sivas reached ₺8 million”

Aslan stated that the prices of detached houses in Sivas have reached ₺8 million and said, “I want to live in a good house. They even want it to be a safe, detached villa. But as demand increases, the price increases. When we look at these increasing costs, villa prices in Sivas have reached approximately ₺8 million. These figures are not affordable for everyone. As there is no loan from banks, there are no customers to pay this money in cash.”

“Money goes to interest”

Aslan emphasized that citizens who have money prefer to invest their money in interest instead of investing it in housing and said, “Let’s say you look at the customer who will give cash, they have ₺7-8 million. If they are not sensitive to interest rates, if they put their money in the bank today, they will get ₺500 – ₺600 thousand. Now this situation makes it difficult for them to give the money. Naturally, this demand stops somewhere because there is no credit for those who do not have money. Money is very valuable for those who have money. They are waiting on the sidelines wondering what else they can do. Therefore, it would be more accurate to say that there is no demand in this context.”

“Whoever buys and sells suffers from the real estate situation”

Aslan stated that both the buyer and the seller suffer from the bride’s point and said:

“Citizens suffer from the increase in the price of the product, but the merchants who sell it also suffer. The seller always wants to appropriate the cost of the goods he sells and sell them at a low price. Our colleagues in the sector are definitely not happy with the cost increases. The contractors are the ones who want more affordable costs, lower inflation, and cheaper apartments. So, it seems like the citizens want it a lot, but rest assured, the demand is ten times that of the contractors. We would like it to be more convenient. In fact, contractors want to make citizens own affordable homes.”

“Living in a detached house is not the same as living in an apartment.”

Citizens of Sivas stated that detached houses are more beautiful and reliable and said, “People now want to get away from the city center and live in detached houses. Living in a detached house is not the same as living in an apartment.”

Source: / Prepared by Irem Yildiz

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