Issued building permits in Turkey decline 15% y/y in Q1

Issued building permits in Turkey decline 15% y/y in Q1
By bne IntelliNews May 23, 2017

The number of building construction permits granted in Turkey declined by 15% y/y to 28,711 in the first quarter of 2017 from 33,776 a year ago, statistics institute TUIK said on May 23.

The all-time high for such permits in Turkey was set in 2014. The number of permits then declined in 2015 and construction activity has not yet reached the 2014 level despite a limited recovery last year.

The government’s efforts to boost construction demand have supported home sales growth during the first quarter. But building permits data for Q1 shows that the construction industry’s appetite to launch new projects has not been fully restored as yet.

The floor area linked to construction permits awarded by municipalities decreased by 17% y/y to 45mn m2 in Q1 while the total estimated value of the buildings decreased by 4% y/y to TRY46bn (€11bn), data from TUIK also showed.

The number of dwelling units authorised by construction permit declined by 12% y/y to 228,918 in the first quarter.

In Q1, home sales in Turkey grew 7% y/y to 325,780 units, mainly thanks to the government stimulus during the build-up to the April 16 referendum. A record high 1.34mn residential units were sold in Turkey last year, a 4% y/y increase. A total of 1.29mn units were sold in the country in 2015, 11% up on the 2014 figure.

The floor area related to the construction permits given by the municipalities increased by 8% y/y to 204mn m2 in 2016 from 189mn m2 in 2015. The number of building permits also rose by 6% y/y to 132,458 in 2016.

The construction industry expanded by 3.7% y/y in Q4, the lowest growth rate registered since Q3 2015, according to the latest GDP data from TUIK. It expanded 7.2% y/y in 2016, following relatively limited 4.9% y/y growth in 2015. The construction sector was once one of the reliable engines of robust economic growth in Turkey.

Construction Permits in Turkey
  2014 2015 14/15 2016 15/16 Q1-17 y/y
Number of Buildings 139,541 125,030 -10% 132,458 6% 28,711 -15%
Floor Area (m2) 220,653,829 188,659,412 -14% 203,721,813 8% 45,036,794 -17%
Value (TRY) 176,001,825,189 159,738,306,937 -9% 185,523,751,020 16% 46,278,883,789 -4%
Number of dwelling units 1,031,754 892,791 -13% 992,008 11% 228,918 -12%
source: tuik