Gap between Turkey’s home price growth and inflation widens to over 5pp in June

Gap between Turkey’s home price growth and inflation widens to over 5pp in June
By bne IntelliNews August 16, 2018

Annual home price growth in Turkey edged down from a revised 10.61% in May to 10.12% in June, data from the central bank showed on August 16.

The posted growth rate fell below the annual CPI inflation rate last September and has stayed there in the 10 subsequent months. 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.

Turkey’s annual consumer price inflation rate moved up from 15.39% in June to 15.85% in July, marking the highest level recorded since 2003, the Turkish Statistical Institute (TUIK) announced on August 3. Given Turkey's ongoing currency crisis, many analysts see it at least approaching 20% in months ahead.

The government tried to stimulate home sales prior to the June 24 snap elections. 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, according to the latest data from TUIK.

The construction industry grew by 6.9% in Q1, a higher rate than the 5.8% seen in Q4 2017, according to the latest GDP data. Construction contributed 0.7pp to last year’s 7.4% GDP growth.

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.

 

 

Data

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