How high prices and interest rates affect real estate sales in Turkey

According to experts, buyers are now less likely to consider Turkish real estate as an investment. In the reality of high credit costs and housing prices, the potential demand cannot be realized.

Statistics

Real estate sales have decreased by 14% in the first 10 months of 2023 compared to last year's figures. The total volume of transactions reached 994,000 units. By the end of the year, the total number of houses and apartments sold will be around 1.2 million units. However, over the past three years, real estate sales have averaged between 1.4 million and 1.5 million units.

What's the problem?

The decline in buyer interest is directly related to excessively high prices, the lack of affordable interest rates, and limited access to credit.

According to the analytical service Endeksa, the average cost of Turkish real estate in October this year increased by 103% compared to last year and exceeded TL 3 million ($103,887). The average cost per square meter reached TL 23,288 ($804).

Currently, real estate purchases are mainly made by end-users who need housing. It is reported that this situation in the market will continue until the summer of 2024.

Positive trends

The commercial real estate market shows positive dynamics: the occupancy rate of offices, which decreased during Covid-19, is increasing. The same is true for agricultural land and land for the construction of new buildings.