Many Developments on the Agenda in the Housing Market Shrinking by 17% in 2023

The year 2023 was a year of decline for the housing market from a broad perspective. Throughout the year, a total of 1,225,926 houses were sold in Turkey, marking a 17% decrease compared to 2022. December, with 138,577 sales, saw a slight movement in the market and an increase compared to previous months; however, the figures still indicate a 33% decline when compared to December 2022. In the last month of 2022, 207,963 houses were sold in Turkey.

In 2023, there was also a 17% decrease in second-hand sales compared to the previous year. In 2022, 1,025,543 second-hand houses were sold in Turkey, while this figure remained at 813,814 in 2023. On the other hand, from the same perspective, the decrease in mortgaged house sales was much more significant. In 2023, 177,748 houses were sold with a mortgage in Turkey. In 2022, this figure was 280,320, revealing a 37% decrease. The decline in mortgaged house sales is inversely proportional to the increase in interest rates; as interest rates rise, mortgaged house sales fall.

At the end of 2023, the average house price was 3 million 92 thousand 700 TL

Generally as of the end of 2023 In Turkey It seems that housing prices have increased by 84 percent in a year. Current average residential selling price per square meter 23 thousand 790 TL, the average price of housing 3 million 92 thousand 700 TL and investment amortization period 15 years. If the average marketing period of housing for sale 64 days.

The purchasing index fell by 38 percent

Rising house prices and loan interest rates also affected the housing affordability index. The purchasing power of housing compared to December 2023 and 2022 38 percent It is observed to decrease in proportion. The Endeksa report shows that increases in household incomes will lose their effect towards the end of the year and the narrowing of loan installment payment facilities have also contributed to this trend. Depending on these factors, In 2023 The highest average interest rate on home loans in the last 5 years has been reached. Monthly interest, especially in the last two months of the year yAverage 3,51 increased to the level. Interest rates in January 2019 2.19 percent It was around and in the five-year period. 0,76 percentsThere were also months when it regressed until the's.

Evaluating the developments in terms of the housing market in 2023, Görkem Öğüt, Founder and General Manager of Endeksa, stated that the Turkish housing market is going through a period of historical recession and continued his remarks as follows:

“We are in a period where sales volumes are at the lowest level in the last 9 years and the share of credit transactions in the total has decreased to 14%. At the moment, it is possible to say that those who have cash in their pockets have bargaining power because the market has slowed down. In addition to rising construction costs and shrinking credit facilities, as well as expectations for the loan campaign expected to come to fruition in the near future, have also contributed to this recession. In addition, there is also an audience that thinks that the profit generated from the different investment vehicles is enough and that real estate investment is no longer attractive.

Nevertheless, 2024 will bring many developments that will positively affect the housing market. The first is, of course, the campaign, which is expected to offer the possibility of a loan at a 15-year interest rate of 1.20 percent to those who buy their first home. Another important point is the possible developments regarding the real estate valuation system. This long-term project has now reached its final stages and a resource is about to come into play to guide taxation and value determination while maintaining the principles of free trade. In summary, citizens will be able to get healthy information about the average values in that area when buying and selling housing. This can counterbalance the unbalanced pricing practices that are currently experienced in the market due to the tight supply-demand balance currently experienced in the market. '

The rapid and intensive urban transformation projects we hear more often with the upcoming elections and the likelihood of public lands being commissioned to produce accessible housing stock could be important determinants. There are some programs that are also published by the Ministry of Environment, Urbanism and Climate Change. Supporting contractors, providing financing and implementing projects in this way is on the agenda. Finally, another important expectation that will affect the sector is that the 25 percent rent increase limit will be lifted in July.

In terms of the overall outlook for 2024, our general view is that a price increase in real estate will again be recorded in parallel with inflation. Of course, regulations that will significantly change market dynamics are on the agenda. Different scenarios will be possible if these happen. Price forecasts for rental and sale housing on trend screens created by Indeksa using big data analysis and artificial intelligence methods can also provide significant insight for those who want to analyze.”