Turkish Housing Market Trends in May 2024
Turkish Housing Market Trends in May 2024
Housing sales across Turkey experienced a slight decline in May, falling by 2.4% compared to the same month last year, according to the Turkish Statistical Institute (TÜİK). A total of 110,588 homes were sold, reflecting the ongoing challenges and shifting dynamics in the country’s real estate market.
The latest housing sales figures in Turkey paint a complex picture. While the overall market experienced a slight decline, the significant drop in mortgage sales and the rise in cash transactions highlight a growing disparity between different income groups. Regional variations and rising housing prices add further layers of complexity to the market dynamics.
A Sharp Decline in Mortgage Sales
The most notable trend in May was the significant drop in mortgage sales, which fell by a staggering 64% year-on-year to just 9,909. This decline highlights the increasing difficulty for low- and middle-income groups to secure financing for home purchases. The share of credit sales in total housing transactions has plummeted from nearly 40% in 2013 to just 9.6% in the first five months of 2024.
In contrast, cash and other forms of sales surged by 17.3% to 100,679, indicating that those with available cash continue to dominate the market. This trend underscores a growing divide between the wealthier segments of the population and those struggling to access affordable housing.
Regional Variations in Sales
Sales figures varied significantly across different provinces. Istanbul led the market with 18,814 homes sold, followed by Ankara with 9,861 and Antalya with 6,306. On the other end of the spectrum, Bayburt saw only 37 sales, Ardahan 46, and Hakkari 60, reflecting regional disparities in housing demand and economic activity.
Housing Prices on the Rise & Sales To Foreigner
The Central Bank of the Republic of Turkey’s (CBRT) latest Housing Price Index reveals that the average price for a 100 square meter home has soared to 3.188 million TL. This steep increase in housing prices further complicates the prospects for low- and middle-income families, who find it increasingly difficult to afford homes. The rising prices are a stark indicator of the challenges facing these groups, whose hopes of homeownership are dwindling.
In May 2024, Turkey saw a significant decrease in house sales to foreigners, with figures dropping by 34.8% compared to the same month last year, totaling 2,064 sales. These transactions accounted for just 1.9% of all house sales in May. Antalya led in foreign purchases with 797 sales, followed by Istanbul with 668 and Mersin with 164. Over the January-May period, sales to foreigners plummeted by 45.8% year-on-year, reaching 9,021. Russian citizens were the top foreign buyers, acquiring 437 houses, followed by Iranians with 207 and Ukrainians with 171.
Year-to-Date Performance
For the January-May period, total housing sales decreased by 3.4% compared to the same period last year, totaling 465,761. This overall decline reflects the broader economic uncertainties and financial constraints impacting the housing market.
Mortgage sales during this period were particularly weak, dropping by 58.7% to 44,602. Conversely, other types of sales, which include cash transactions and alternative financing methods such as promissory notes and construction company campaigns, increased by 12.6%, reaching 421,159.
First-Hand vs. Second-Hand Sales
First-hand house sales in May increased by 3.3% year-on-year to 35,558, accounting for 32.2% of total sales. Over the first five months of the year, first-hand sales saw a modest increase of 1.8%, totaling 147,899.
Second-hand sales, however, experienced a decline, falling by 4.9% in May to 75,030, and by 5.6% in the January-May period to 317,862. This decline in second-hand sales indicates a potential saturation in the market for pre-owned homes or a shift in buyer preference towards new properties.