NEWS Property        15/06/2020

Property sales in Turkey dropped by 44.6% in May 2020

According to figures prepared by the Turkish Statistical Institute (TÜİK – Türkstat), domestic property sales in general in Turkey, that is including both Turkish and foreign nationals, dropped by 44.6% in May 2020 to 50,936 units compared with the same month of the previous year. Following the slump in the property market over the last two years, the improvement in property sales which started in August 2019 has been a welcome development. However, precautions by the Turkish government to prevent the spread of the coronavirus pandemic introduced in the second half of March had already started to have a negative effect on property sales that month. Throughout the month of April, measures to isolate the population and prevent movement became stricter. Under these circumstances, many potential property buyers would have postponed their efforts to research and view property, and it is surprising that so many units were sold as they were. Lockdown was implemented right through May with the inevitable fall in property sales. As from the begining of June though, the three largest state banks of Ziraat Bank, VakıfBank and Halkbank extended a new loan incentive scheme with reduced rates to invigorate transition to normalization and revive social life, as economic activity steps up following a slowdown due to the coronavirus pandemic. Mortgages for new houses will have up to 15 years maturity with interest rates as low as 0.64% and a grace period of up to 12 months. Property sales in June, during which lockdown is expected to be largely discontinued, are expected to rise substantially.


Mortgage sales increased by 23.9% to 18,483 units in May 2020.  Significantly though, mortgage sales made up 36.3% of all property sales compared with 16.2% in the same month of the previous year. This comparatively big increase in the use of mortagages reflects the low interest rates currently being offered by banks.


The number of property units sold for the first time, which made up 33.1% of total property sales, fell by 54.7% to 16,860 units in May 2020 compared with the same month of the previous year. Used property sales which made up 66.9% of total sales in May 2020 fell by 37.7% to 34,076 units.


For the year 2019, property sales in Turkey were 1,348,729 units, a decrease of 1.9% on the previous year. Mortgage sales, which made up 24.7% of all property sales, increased by 20.1% to 332,508 units in 2019. The number of property units sold for the first time, 511,682 units, which made up 37.9% of total property sales, decreased by 21.5% in 2019 compared with the previous year. Used property sales, with 837,047 units, which made up 62.1% of total sales in 2019 increased by 15.6%.


Property sales to foreigners of 860 units in May 2020 showed a 78.1% decrease on the figure for the same month of the previous year, an 8.9% increase on the figure for the previous month of April, and represents 1.7% of total domestic sales in Turkey in May 2020. The decrease in sales is no doubt due to the spread of the coronavirus which has drastically reduced global travel and caused Turkey to close its borders.


Property sales to foreigners for the year 2019 were 45,483 units, 3.4% of the total, and an increase of 14.7% on the 39,663 units for 2018, which was in turn 78.4% higher than the figure for the previous year 2017. The reason for the high number of property sales to foreigners over the last two years has been the weaker Turkish lira and the government’s easing of citizenship requirements in 2018 for foreigners, who can now obtain Turkish citizenship if they own real estate in Turkey worth a minimum of USD 250,000.


In May 2020, sales to middle-eastern nationals continued at over 50% of the total. Highest sales were to Iranian nationals with 209 units, followed by Iraq nationals with 143 units, Afghan nationals with 48 units, Chinese nationals with 46 units, Azerbaijan nationals with 42 units, and Russian nationals with 40 units. In 2019, of the total 45,483 units sold, highest sales were to Iraq nationals with 7,596 units, followed by Iranian nationals with 5,423 units, Russian nationals with 2,893 units, Saudi Arabian nationals with 2,208 units, Afghan nationals with 2,191 units, Kuwait nationals with 1,903 units, German nationals with 1,723 units, Jordanian nationals with 1,596 units, and Yemen nationals with 1,353 units.


Istanbul was the number one province attracting property sales to foreigners with 423 units in May 2020. The Mediterranean resort of Antalya was the second most popular province with 130 units, followed by the capitol Ankara with 72 units, and the Aegean province of Izmir with 38 units. Of total sales in 2019 of 45,483 units, 20,857 units were sold in Istanbul, 9,951 units were sold in Antalya, 2,539 units were sold in Ankara, 2,213 units were sold in Bursa, 1,696 units were sold in Yalova, and 1,247 units were sold in Sakarya.

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