210% increase in house sales in Turkey in June

Since last December, June recorded the highest monthly sales with more than 202,000 houses sold; the sector profiting from interest rate cuts and increased mortgages.

After public lenders announced that mortgage loans were at a historically low rate in order to help prevent an economic fallout from the COVID-19 pandemic, home sales recorded a whopping 209.7% year-on-year increase in June 2020.

A total of 190,012 units were sold in June alone, with sales of houses with mortgages accounting for 53.4% of that, according to the Turkish Statistical Institute (TurkStat).

Where are people buying property?

The lion’s share of sales was in Istanbul, which is Turkey’s largest city by population and one of the most popular tourist destinations in the country. Istanbul saw housing sales of 21,915 units in June.

This was followed by the capital, Ankara, and Izmir, an Aegean province, which saw sales respectively of 21,915 and 11,690 units.

The top place for property bought by foreign nationals was Istanbul, which saw 730 properties purchased, followed by Antalya, the Mediterranean resort city, and Ankara; these saw 227 units and 180s units respectively bought. The top foreign nation to buy Turkish properties in June was Iran; there were 398 units sold to Iranian buyers. This was followed by citizens from Iraq, China, and Azerbaijan.

Historic opportunities with cheap mortgages

The low-interest rates had taken effect and as a result, housing sales during June 2020 had reached a historic high, according to Treasury and Finance Minister, Berat Albayrak. He tweeted that economic activity across 250 sub-sectors would see a revival thanks to the recovery of the housing sector.

On June 1, Turkey’s three leading state lenders extended four new loan packages in a bid to revitalise the transition to post-COVID-19 normality and renew social life throughout the country.

The packages from Ziraat Bank, VakiBank and Halkbank included mortgages for new houses as well as loans for holiday expenses, locally manufactured good and vehicle purchases; these loans were given with annual interest rates running below inflation.

All three banks have agreed that the mortgages for new homes will have interest rates as low as 0.64%, with up to a 15-year maturity and a grace period of 12 months.

It was announced by the Banking Regulation and Supervisory Agency (BKKD) that from January 1 to June 26, the housing loan balance rose by 32.2 billion TL, breaking an annual all-time high. Originally the highest amount recorded had been in 2017, when the housing loan stood at 27.6 billion TL.

The balance, which had ended at 188.5 billion TL at the end of 2018, had increased by 10.2 billion TL at the end of 2019 to 198.7 billion TL.