Here are 5 reasons behind increase in Türkiye’s property sales

In Türkiye, property sales surged by 47,000 units from June to July.

Industry representatives attribute this increase, despite high interest rates, to five key factors:

• The removal of the 25% rent cap led to a sharp increase in rents.
• Coupled with the economic slowdown, the rent/price ratio even in Istanbul dropped from 17 years to 14 years, boosting the appetite for purchasing.
• Expectations of interest rate cuts have also prompted some to take action.
• Additionally, those withdrawing from declining Turkish lira deposits and record-high gold prices are turning to property investment.

The property sales figures announced yesterday by the Turkish Statistical Institute have sparked excitement in the sector, raising the question for the public: “Is now the right time to buy a home?”

In June, 79,313 properties were sold, and in July, this figure rose to 127,088 units. Over just one month, property sales increased by more than 47,000 units.

The increase in sales, despite a lack of significant drops in mortgage interest rates, did not go unnoticed.

Today, the repayment of a ₺1 million mortgage over 120 months still approaches ₺3 million. In fact, mortgage sales last month amounted to just 11,496 units, making up only 9% of the total sales.

Why are sales increasing?

According to recent information from industry representatives and real estate agents, the following reasons stand out for the increase in property sales:

• Significant rent increases: The pace of property price increases, particularly in Istanbul, has slowed considerably over the past year, while rents have surged dramatically. This has significantly reduced the rent/price ratio, with the rent multiplier in Istanbul, which was close to 17 years at the beginning of the year, now dropping to 14 years.
• Removal of the 25% cap: The lifting of the “25% cap” in July led to higher rent adjustments. As a result, more people are turning to homeownership for residential purposes.
• Expectations of interest rate cuts: With the mere discussion of interest rate cuts, some homebuyers have been prompted to act early and purchase property.
• Decline in deposit interest rates: A slight drop in deposit interest rates and expectations of further decreases have also started to encourage people to invest in property.
• High gold prices: Following record highs in gold prices, those in need of housing have been selling their gold at high prices and using the cash, along with the power of money in a sluggish market, to meet their housing needs.

Will sales increase even more?

Industry representatives point to two developments, saying, “One is the increase in rental yields and the shortening of amortization periods. Amortization periods are shortening in all cities, which makes buying more attractive.

The second is that expectations of interest rate cuts are being talked about more. These two developments could sustain the appetite for buying.”