Homes sales in Turkey posted a sharp decline of 14% y/y to 110,905 in March, after rising 1.7% y/y in January and declining by 5% y/y in February, national statistics office TUIK reported on April 20.

Mortgage sales continued to record sharper declines, falling 35% y/y in the month to 32,786. Sales fell 28% y/y in February and 20% y/y in January.

President Recep Tayyip Erdogan has not let up in pushing for lower interest rates despite Turkey's economy entering territory where analysts suspect it is seriously overheating. However, sticky double-digit inflation and a lack of cash at local lenders following last year’s credit boom prevent the central bank and the banking industry from responding to Erdogan's calls for cheaper money.

Consequently, home sales declined by 7% y/y to 303,877 units in Q1 while mortgage sales fell by 29% y/y to 89,380 units. 

Home sales to foreigners rose by 24% y/y to 5,298 units in the first quarter.

The government is expected to employ fresh incentives for foreign buyers of Turkish properties. In a March 25 report on preparations for adjusting incentives for foreign property buyers, pro-government newspaper Daily Sabah highlighted the construction sector’s support for the measures.

Feyzullah Yetgin, head of the Association of Real Estate and Real Estate Investment Companies (GYODER), reportedly expects a new $300,000 threshold to obtain Turkish citizenship for foreign buyers to be legalised in May.

Reuters reported earlier this month that payment problems and a slowdown in new projects were besetting Turkey’s construction firms, which have driven the country’s stellar economic growth for years.

Construction confidence decreased by 5.9% m/m in March after declining 3.7% m/m in February.

Construction contributed 0.7pp to last year’s 7.4% GDP growth.

Homes sales 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.

Mortgage sales rose by 5% y/y to 473,099 units in 2017.

Property sales to foreigners increased 22% y/y to 22,234 units last year.