Turkey’s home sales up for second consecutive month in April

Turkey’s home sales up for second consecutive month in April
By bne IntelliNews May 24, 2017

Home sales in Turkey rose by 8% y/y to 114,446 units in April, following the 10% y/y growth registered in March, data from statistics office TUIK showed on May 24.

Six straight months of home sales growth was recorded in Turkey from August last year to January thanks to government efforts aimed at boosting construction demand to support the slowing economy. And it seems the government’s attempts to boost construction demand have also supported home sales growth during the first third of this year, though in February there was a slight break in the trend with growth edging down 0.2% y/y.

During the January-April period, home sales grew 7% y/y to 440,226 units. Property sales to foreigners were down 5% y/y to 5,894 units.

In January, Turkish President Recep Tayyip Erdogan offered the chance of Turkish citizenship to certain foreign real estate investors through an executive order. The government has high hopes that $1.9bn worth of real estate sales to foreigners can be achieved this year. However, security conditions in Turkey are suppressing foreign investors’ demand for real estate.

Ministers are also trying to stimulate domestic demand for real estate with a number of measures. Government officials, including Erdogan, have, for instance, been calling on Turkey's banks to cut interest rates on home loans, while VAT levied on home sales has been reduced.

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 number of building construction permits granted in Turkey declined by 15% y/y to 28,711 in Q1. Building permits data for Q1 shows that the construction industry’s appetite for launching new projects has not been fully restored as yet despite all the stimulation measures undertaken by the government.

The number of building permits rose by 6% y/y to 132,458 in 2016.

The seasonally-adjusted confidence index for the construction sector rose by 0.8% m/m in May, following a 0.2% decline in April. Despite the slight recovery in May, the index value for construction confidence is still well below the 100-mark which separates optimism from pessimism.

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 seen as one of the reliable drivers behind robust economic growth in Turkey.

Home Sales in Turkey
  Jan-Apr y/y Share 2016 y/y Share 2015 y/y Share
Turkey Total 440,226 7% 100% 1,341,453 4% 100% 1,289,320 11% 100%
Istanbul 76,099 1% 17% 232,428 -3% 17% 239,767 6% 19%
Ankara 50,328 14% 11% 144,570 -1% 11% 146,537 11% 11%
Izmir 27,184 5% 6% 81,316 5% 6% 77,796 8% 6%
Source: tuik

Data

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