In a worrying trend for home owners, the posted home price growth rate fell below the annual CPI inflation rate as far back as last September and has since stayed there. Home price growth was as low as 9.48% in March, the lowest level recorded since March 2011. The following two months saw increases but the growth rates still trailed inflation.
Turkish inflation leapt again in August, soaring to a 15-year high of 17.9% y/y from July’s 15.85% y/y, the Turkish Statistical Institute (TUIK) announced on September 3. Given Turkey's ongoing currency crisis, markets see it passing 20% in months ahead.
The construction confidence index decreased by as much as 10.7% m/m to 68.8 in August, according to the latest business surveys by TUIK.
The government has been employing campaigns to stimulate home sales. There are a total of 1.5mn-2mn unsold homes in Turkey, according to sector representatives.
Home sales declined by 0.04% y/y to 769,910 units in January-July while mortgage sales fell by 18% y/y to 232,210 contracts, the latest data from TUIK shows.
The construction industry grew by 0.8% y/y in Q2, the lowest growth rate registered since Q1 2015, after growing 6.6% y/y in the first quarter, according to the latest GDP data. The sector grew by 9% y/y in 2017.
Homes sales in Turkey rose by 5% y/y to 1.41mn units in 2017, marking a new all-time high, following the 4% y/y gain in 2016 to 1.34mn units.