Insights into May 2024’s Fluctuations and Emerging Trends
May 2024 witnessed fluctuations and unexpected developments in Turkiye’s real estate sector. While housing sales typically surge with seasonal trends this time of year, unexpected declines and emerging opportunities have captured attention. According to the Turkish Statistical Institute (TUİK), housing sales decreased by 2.4% compared to the same month last year, totaling 110,588 units. What are the reasons behind this decline?
How did housing sales fare in major cities like Istanbul, Ankara, and Antalya? What does the dramatic decrease in mortgage-backed housing sales signify? Why are foreign investors distancing themselves from the Turkish market? Explore the answers to these questions and more in this article. Packed with data and analyses tracking the pulse of the housing market, this piece will serve as a guide for both investors and prospective homebuyers alike. Let’s delve into the latest developments in Turkiye’s housing market together!
Sales, Trends, and Future Expectations
In May 2024, the Turkish housing market remained dynamic, yet sales figures and trends showed significant changes. According to TUİK, housing sales in May decreased by 2.4% compared to the same month last year, totaling 110,588 units. What story lies behind these figures? Let’s delve into the details.
Housing Sales in Major Cities Draw Attention
The highest volumes of housing sales were recorded in Istanbul, Ankara, and Antalya. Istanbul saw 18,814 housing transactions, while Ankara recorded 9,861 and Antalya 6,306. Istanbul’s robust housing sales underscore its dynamic and in-demand market status. However, cities like Bayburt, Ardahan, and Hakkari saw significantly lower housing sales, with only 37, 46, and 60 units sold respectively.
Dramatic Decline in Mortgage-backed Housing Sales
In May, mortgage-backed housing sales across Turkiye plummeted by 63.9% year-on-year to 9,909 units. This steep decline can be attributed to economic uncertainties and high interest rates. Mortgage-backed sales accounted for only 9.0% of total housing transactions. During January-May, mortgage-backed sales dropped by 58.7% year-on-year to 44,602 units.
Increase in Other Types of Housing Sales
Other types of housing sales showed a different trend. Across Turkiye, other housing sales surged by 17.3% in May compared to the same month last year, totaling 100,679 units. Other sales accounted for 91.0% of total housing transactions, indicating a preference among buyers for cash or alternative payment plans.
Sales of New and Second-hand Homes
In May 2024, sales of new homes increased by 3.3% year-on-year to 35,558 units, comprising 32.2% of total housing sales. Conversely, sales of second-hand homes declined by 4.9% to 75,030 units, constituting 67.8% of total sales. These figures highlight an uptick in demand for new properties while indicating a slowdown in the second-hand housing market.
Decline in Housing Sales to Foreigners
In May, housing sales to foreigners plummeted by 34.8% year-on-year to 2,064 units. The highest number of housing sales to foreigners were recorded in Antalya (797), Istanbul (668), and Mersin (164). Russian nationals topped the list of foreign buyers. This decline underscores waning international investor interest in the Turkish real estate market.
Future Expectations
These housing market trends underscore the direct impact of economic and financial factors on housing sales. While high interest rates dampen mortgage-backed sales, there is an increase in other transaction types. The decline in sales to foreigners signals risks to Turkiye’s appeal to international investors.
The future of Turkiye’s housing market hinges on economic policies, interest rates, and international investor interest. However, robust demand in major cities and shifting buyer preferences towards different sales types reflect a dynamic and adaptable market.
Source: Emlakdergisi / Prepared by Irem Yildiz