Compared to the previous years, the decrease in housing sales in the construction sector, due to elections and foreign exchange in the first half of this year is expected to improve in the second half of the year. Sector representatives claim that the second half will be better in new home sales than in the first half of the year.
Due to the increase in exchange rates, local elections on March 31 and the repeated elections in Istanbul on 23rd of June, in the first 6 months of this year, housing sales decreased compared to previous years. Turkey Statistical Institute (TUIK) data; general housing sales in Turkey, in June 2019, sales decreased 48.6 percent compared to the same month of the previous year, mortgage sales 84.6, the number of houses sold for the first time 59.2, while second-hand housing sales decreased 38.9 percent.
IMPORTANT ONE IS THE NEW HOUSE SALES
Real Estate Investment Trust Association (GYODER) and Istanbul Builders Association (İNDER) member Helmann Consturaction’s Chairman of the Board of Directors of the company Selman Özgün, said that the change of the hand of 5-10-20 years old houses that are called second-hand does not help the sector. Selman Özgün said, “The important thing is that the new houses change hands’’.
The high number of these first sales is important, especially when we look at the first sales in June, there were 23 thousand sales and in June last year there were 57 thousand sales. New housing sales decreased by 59 percent. Not only in June, there is a decline in the months before too, "Özgün said.
HOME LOAN PURCHASE DECREASED
Özgün, who listed the reasons for the decline in the sales of new housing, stressed that the terms such as mortgaged sales in banks and interest conditions, as well as the aggravation of both interest and bank lending are important factors.
In addition, the election process, which continued from the beginning of the year until June 23, increase in exchange rates is among the reasons. “In June, mortgaged sales decreased by 85 percent, which means that people's purchase of loan houses decreased by about 85 percent. Ramadan holiday in the month of June and the election in Istanbul was also effective, "he said.
NEW HOUSE COST HIGHER COMPARED TO THE SECOND-HAND
Özgün pointed out that one of the most important factors in the sale of new housing is the significant increase in exchange rate-related costs. ‘’The cost of selling the new house much higher now compared to previous years. If it was 100 last year, we can say 200-250 this year.’’There is already a housing stock pending, and there is also sales in the second hand market. That's where the real problem is. While the cost of zero housing is 100 lira, the second-hand cost is 50-60 TL. Naturally they agree to sell at a lower price. This affects the sale of new housing because costs are too high.
‘’Nobody wants to sell at a loss, "he said.
‘’Stating that both March 31 and June 23 elections are now behind, risks are lower in terms of exchange rates compared to the first half of the year’’, Özgün said. Uncertainty is lower than before the election. In the second half of the year, we believe that new housing sales activity will be much better than the first half. Even if the citizen has a few 'wonder' questions, it will still be better than before the election. In addition, there is a new amnesty, such as tax reduction expectations, "he said.
PURCHASING POWER OF FOREIGNERS AND THE EFFECT OF CITIZENSHIP POLICY
The 30.5 percent rise in residential sales to foreign effects the increase of purchasing power in terms of foreign exchange, "But one of the biggest reasons for investment is opportunity to obtain citizenship by investment of 250 thousand dollars’’. In addition, with the appraisal report, the guarantee-taking measure of the state was also very effective. Even if the investment remains below 250 thousand dollars there is an opportunity to obtain residence permit. ‘’These measurements are also encouraging investment with the thought that it may create an opportunity in the future. "
POTENTIAL ABROAD NOT BEING USED
Özgün, who also provided information about the expectations of the sector, said that it is very important that real estate companies focus on export sector. Özgün said ‘’ There should be studies about tax advantages. The biggest shortcoming of real estate companies is that they don’t follow what is happening in global world market, business fairs, sales rates by countries, international real estate agencies etc. More success will be achieved if the projects aimed at them are emphasized, because there is serious potential in the overseas market. I think the potential outside is not being used very well ".