House sales in Turkey dip 20 pct, worse feared ahead

A significant drop in house sales last month could foreshadow an even worse period for Turkey’s housing markets, where prices remain still high despite falling demand, market experts argued on Monday.

Sales of new houses fell for the sixth straight month in July, the Turkish Statistics Institute (TurkStat) announced on Monday. In July, the number of houses sold was down by 20.2 percent compared to the same period of the previous year, with 85,101 home sales recorded. In the same period, mortgage house sales also dropped by 32.9 percent year-on-year. In the first seven months of 2014, 9.7 percent fewer houses were sold when compared to the January-July period a year ago, Monday’s data revealed.

July’s drop in house sales is a remarkable one, pundits argue, adding that upcoming months could see even sharper declines in sales.

“It is not hard to predict further declines in house sales through the end of this year amid increased debts, low demand and high prices. … The housing markets face bigger risks,” Yeliz Karabulut from securities company ALB Menkul Değerler told Today’s Zaman. She recalls that the Turkish construction companies had TL 95 billion ($43.6 billion) in unpaid debts in June, adding that this was an astounding 61 percent rise over the end of 2012, when the figure was TL 59 billion.
 
Housing prices in Turkey’s largest city shot up 21.59 percent last month compared to July 2013, a figure that was 10.79 percent on average for the entire country.
 
Cemal Gökçe, president of the İstanbul branch of the Chamber of Civil Engineers (İMO), told Today’s Zaman that housing sales would drop more than 20 percent during the last five months of this year. “The current picture reveals serious structural problems in the Turkish housing industry. Builders have recently intensified their focus on developing apartments, especially for the middle and upper classes… there are not enough affordable units for the lower class,” Gökçe said. He also referred to the growing risk of a housing bubble in Turkey markets. “The number of housing units on sale has exceeded the 1 million mark in Turkey; prices are high and this is not a sustainable situation.”
 
The drop in sales coincides with the Muslim fasting month of Ramadan and just ahead of the nation’s presidential elections, two factors that some observers have argued might have led to a stagnation in the housing markets. Amid political uncertainty, housing sales had already been steadily dropping in Turkey since the beginning of this year.
 
Meanwhile, İstanbul saw the highest number of sales — 17,116 — comprising 11.1 percent of total sales in July. Ankara followed with 9,426 (6.2 percent) and İzmir was next with 5,281 (6.2 percent). The provinces with the lowest sales were Hakkari, Ardahan and Şırnak with six, nine and 17 home sales, respectively.
 
In July, foreign buyers purchased 32 percent more houses year-on-year in Turkey, with 1,473 units. Antalya, İstanbul and Aydın saw the highest sales of houses to foreign customers respectively. The increase in house sales to foreigners was even higher in the first seven months, registering a 57 percent year-on-year surge with 9,980 units.

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About yavuzbaydar

Yavuz Baydar has been an award-winning Turkish journalist, whose professional activity spans nearly four decades. In December 2013, Baydar co-founded the independent media platform, P24, Punto24, to monitor the media sector of Turkey, as well as organizing surveys, and training workshops. Baydar wrote opinion columns, in Turkish, liberal daily Ozgur Dusunce and news site Haberdar, and in English, daily Today's Zaman, on domestic and foreign policy issues related to Turkey, and media matters, until all had to cease publications due to growing political oppression. Currently, he writes regular chronicles for Die Süddeutsche Zeitung, and opinion columns for the Arab Weekly, as well as analysis for Index on Censorship. Baydar blogs with the Huffington Post, sharing his his analysis and views on Turkish politics, the Middle East, Balkans, Europe, U.S-Turkish relations, human rights, free speech, press freedom, history, etc. His opinion articles appeared at the New York Times, the Guardian, El Pais, Svenska Dagbladet, and Al Jazeera English online. Turkey’s first news ombudsman, beginning at Milliyet daily in 1999, Baydar worked in the same role as reader representative until 2014. His work included reader complaints with content, and commentary on media ethics. Working in a tough professional climate had its costs: he was twice forced to leave his job, after his self-critical columns on journalistic flaws and fabricated news stories. Baydar worked as producer and news presenter in Swedish Radio &TV Corp. (SR) Stockholm, Sweden between 1979-1991; as correspondent for Scandinavia and Baltics for Turkish daily Cumhuriyet between 1980-1992, and the BBC World Service, in early 1990's. Returning to Turkey in 1994, he worked as reporter and ediytor for various outlets in print, as well as hosting debate porogrammes in public and private TV channels. Baydar studied informatics, cybernetics and, later, had his journalism ediucatiob in the University of Stockholm. Baydar served as president of the U.S. based International Organizaton of News Ombudsmen (ONO) in 2003. He was a Knight-Wallace Fellow at University of Michigan in 2004. Baydar was given the Special Award of the European Press Prize (EPP), for 'excellence in journalism', along with the Guardian and Der Spiegel in 2014. He won the Umbria Journalism Award in March 2014 and Caravella/Mare Nostrum Prize in 2015; both in Italy. Baydar completed an extensive research on self-censorship, corruption in media, and growing threats over journalism in Turkey as a Shorenstein Fellow at the Kennedy School of Government at Harvard.
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