Housing Prices Rise, Sales Fall

Housing prices in Turkey break a new record, increasing by 2 percent in April compared to the previous month; meanwhile, the number of houses sold in May was the lowest 2021.

While the housing prices in Turkey increased by 2 percent in April compared to the previous month, the Housing Price Index increased by 32.4 percent nominally and by 13 percent in real terms, compared to the same month of the previous year. Despite the 16.2 percent increase in house sales compared to last year, the worst housing sales figures of 2021 were seen in May this year.

According to the Central Bank, the Housing Price Index (2017=100), which is calculated for monitoring the price changes adjusted with the quality effect of the houses in Turkey, increased by 2 percent in April 2021, compared to the previous month, reaching 168.8. This resulted in the Housing Price Index’s increase by 32.4 percent compared to the same month of the previous year, which indicates an increase of 13.0 percent in real terms. 

Considering the developments in housing price indexes of Istanbul, Ankara and Izmir, compared to the previous month, increases of 1.5, 1.5 and 1.4 percent, respectively, were observed in April 2021. Index values increased by 28.6, 29.8 and 34.3 percent in Istanbul, Ankara and Izmir, respectively, compared to the same month of the previous year.

According to the housing sales figures declared by the Turkish Statistical Institute (TSI), 59,166 houses were sold throughout Turkey. Istanbul had the highest share in housing sales, with 11, 356 houses. Istanbul, which has a share of 19.2 percent, was followed by Ankara at 5, 653 houses, and by Izmir at 3,298 houses. The lowest number of houses was sold in Ardahan, at 7 houses. Also, 11 houses were sold in Hakkari and 26 houses were sold in Bayburt. It is estimated that high house prices and interest rates are the reasons for the decline in housing sales.

Turkey Takes the Lead in the Increase in Housing Prices on a Global Basis

According to the global housing prices index prepared by Knight Franks, a residential and commercial property consultancy company, as of the end of March, housing prices increased by 7.3 percent, on average, in 12 months worldwide. This increase in global prices was noted as the highest increase in housing prices since the last quarter of 2006. It pointed out the heat in the housing industry, which led to the global financial crisis in 2008.

In the index, Turkey took the lead in the increase in housing prices. During this time period, housing prices increased by 32 percent in Turkey. Turkey was followed by New Zealand, with an increase of 22.1 percent, and Luxemburg, with an increase of 16.6 percent.