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Recently, the statistical agency TÜİK published collected and processed data on residential real estate sales for April 2021. Based on the results of the last two months, we can conclude: the long-awaited spring has come to construction market.
Earlier, we have already talked about developers’ expectations regarding the implementation of deferred demand after the lockdown. The temporary quarantine has ended successfully, it has become easier to monitor the correctness of transactions and current state of the houses where the real estate is listed for sale.
Mortgage lending rates are still low, however, higher than last year, when the authorities decreased them to a record low due to the pandemic.
Let us recall that housing sales in April 2021 increased by 124.1% compared to April last year.
Thus, experienced market players believe that now is the time to purchase real estate, otherwise prices will hoick very soon.
Representatives of well-known development companies comment on this and other positive trends in housing investment market in Turkey.
TAMER ÖZYURT, ÖZYURTLAR HOLDING CHAIRMAN OF THE BOARD: “HOUSING NEED IS CONTINUED”
Despite the current interest rate, sales dynamics remains - namely, increase in indicators which was evident in March, the expert believes. Moreover: after a year of the pandemic, the desire to acquire spacious comfortable housing has increased markedly. Though, now investors prefer to purchase housing without turning to banks to loans. “Thus, foreign currency and gold deposits safely kept under the pillow were just used to purchase housing,” Tamer Özyurt is convinced.
Active vaccination of the population also adds optimism: people will move around the country more calmly, the expert believes: “This is obvious from the indicators: we are seeing an increase in the number of foreign investors, despite continuing travel restrictions. The rise which began in March retained its momentum in April. With the acceleration of vaccination rates, it can be said that the growth will accelerate in the coming months. Moreover, it will be able to intensify even more if the authorities take measures to reduce interest rates.
In terms of materials, metal prices are expected to rise as China eradicates the 13% export tax benefits on 146 metal products; and other construction costs have been growing lately. This could provoke an even greater increase in property prices in addition to what is being observed now.
Thus, potential buyers who decide to wait and not invest in housing in the current period may face exorbitant prices in 2022 and later.
ABDÜLKADIR AKKUŞ, AKKUŞ GROUP CHAIRMAN OF THE MANAGEMENT BOARD: “WE WILL ACCELERATE SALES TWICE BY REDUCING INTEREST RATES AND SWITCHING TO NEW FINANCING MODELS”
The expert agreed with their colleague that sales dynamics is evident, especially with regard to spring indicators: “This process was significantly influenced by high exchange rate and gold prices in April. Moreover, demand for residential real estate among customers has increased due to the “outwashing” of listed property stocks from the market.
Production activities in our sector have also revived due to the increased housing demand.
If we assess the interest of foreign investors in April compared to March, the speaker believes, foreign buyers consider the purchase of residential real estate more reliable than any other investments in order to preserve and increase their funds.
What more, Mr. Akkuş says, in addition to tourism which has made Turkey famous over the previous decades, residential real estate and its unconditional advantages have become the next country's brand on the international market: “Our industry has begun to reap the benefits of its rich experience and innovative vision. Today we are receiving investments from states that have not even been discussed before. Well, thanks to the ability to regulate interest rates and new financing models development, we are now able to double sales acceleration.”
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ABDÜSSAMET BAHADIR, BAHAŞ HOLDING CEO: “PRODUCTION VOLUMES INCREASE WITH SALES GROWTH”
“Investment spring continues in our industry which began in March when we first noticed a remarkable increase in figures.
Despite the fact that we have seen a kind of real estate industry revival every year in the spring, however, in 2021 this process is notably different since it has been accompanied by other phenomena. Foreign exchange and gold rates growth has pushed investors to invest including construction industry. Recovery in our sector has accelerated with confidence loss in other investment vehicles. Thus, foreign ones get significant added value from their own investments, taking advantage of investments in foreign currency due to its rise in price.
As the specialist believes, the program of urban transformation implemented by the Ministry of Environment and Urbanization will play into the hand in this sense. It includes a number of projects that used to be on the shelf for a long time. Now they are alive and are rapidly gaining momentum.
“Turkey urgently needs urban transformation projects - not only due to possible earthquakes, but also due to unplanned urbanization.” Indeed, illegal construction is rampant in a number of cities, and local municipalities have to militate against it.
As a result, thanks to the support provided by the authorities, urban transformation activities are gaining momentum; cities are becoming more convenient and beautiful, and housing is becoming more reliable.
“Production is increasing along with sales. Our company believes that even greater effect in this direction can be achieved through incentives and discounts offered to manufacturers and investors.”
İHSAN ÇULHALIK, İNSAY YAPI CEO: “SPRING MOOD IN THE SALES SEGMENT”
As the summer season approaches, sales dynamics increases, and sales only strengthen this spring mood, the expert believes: “Investors have focused on investing in housing, despite not the lowest interest rate. The pandemic has transformed the house from just a roof over your head into a space for living, and the transfer of work and study to a remote location has further strengthened this trend. The demand for detached houses and villas is especially high.
As a result, investors turned their faces to the residential sector, due to the rise in prices for foreign exchange and gold. Foreign investors are also actively investing in residential real estate in Turkey. So, despite the ongoing rumors of an unnecessarily inflated bubble in our industry over the years, the need for housing is growing steadily. Well, the record sales volumes in 2020 led to a significant reduction in the inventory of apartments and houses listed for sale. The movement at construction sites does not decrease either.
However, as the expert agreed with his colleagues, prices are already growing, and will continue to grow including due to an increase in construction costs as such.
And here, he believes, in 2021 it will be possible to achieve another record in sales if you support production growth keeping low interest rates for manufacturing companies.
OZAN BÜK, NEYZEN YAPI MARKET CHAIRMAN OF THE BOARD AND HEAD OF THE NALBURDAYIM.COM PORTAL: “IN ADDITION TO SALES GROWTH, IT IS POSSIBLE TO SPEAK ABOUT AN INCREASE IN VOLUME OF BUILDING MATERIALS SALE”
The growth in housing sales in spring months provided construction sector with a strong dynamic, and significantly stimulated production as well, the specialist believes: “Sector recovery after a slight recession in the first two months of this year - January-February 2021 - cheered and stimulated developers. Projects construction postponed for some time has resumed. On the other hand, this also provoked an increase in production in the segment of building materials: in the last quarter of 2020 it is + 19%, and at the beginning of 2021, an increase in indicators is also evident.
Building materials sales such as paints and related products, wallpaper, decorative materials for walls and ceilings, bathroom accessories, shower heads, tile types, tanks and showers increased by tens of percent. Additional taxes on the import of building materials coupled with support measures offered to domestic producers gave a good hand to local production as well. The consumer saw that they could purchase a domestic product and quality material at the most affordable price.
“As housing sales grow, production dynamics will rise. Thus, I think we will inevitably witness record rates of residential real estate sales,” he believes.
Thus, Turk.Estate recommends that potential investors quickly make their choice in order to catch the widest assortment in the market, where apartments and houses have already begun to be bought up; and also, to have time to fix the best price for yourself.
Read the detailed sales report for April here; a detailed overview of the Turkish construction industry, new technologies and already announced large development projects - here.
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