Construction Turkey to build low-cost housing to ease rent pressures By William Sellars January 14, 2025, 12:22 PM Unsplash/PF Turkey needs to build 250,000 houses a year to meet rental demand Target of 250,000 houses Focus on urban areas Could reduce rents by 10% Turkey has unveiled a new scheme to provide affordable homes for low-income earners and first-time buyers aimed at easing inflationary pressures generated by rising rents and helping to support the housing sector. Vice president Cevdet Yılmaz announced on Friday that state housing agency TOKİ would be overseeing the new low-cost housing programme, with work to start on the first of 250,000 units by mid-year. Under the terms of the scheme participants will have to provide a 10 percent deposit on the purchase cost, with a repayment term of up to 240 months – 20 years – and capped repayments. Access to the programme is restricted to those with a monthly income of TL45,000 ($1,265) or less, approximately twice the current minimum wage. Those who already own a house, or have a spouse who does, will not be eligible for the scheme – a response to claims that under previous housing development projects some participants were building up property portfolios by buying multiple homes at cheap rates. The project will cover all 81 of Turkey’s provinces, but emphasis will be given to major urban areas where demand is greatest. Contractors employed by TOKİ to build the developments will be required to deliver homes that are energy efficient, constructed with climate-friendly materials and are zero-waste compatible. If all the project’s units could be brought to market within a year the impact of a large number of new properties would have a significant effect on rental costs, says real estate economist Dr Ahmet Büyükduman. “The planned 250,000 housing units represents 3 to 4 percent of the rental market, and this increase would push the current rental prices down by 10 percent, but only if they can manage to launch them at once,” he told AGBI. With Turkey already requiring 250,000 units a year to meet rental demand, any gradual approach to provide entry level housing to the market may not have the structural impact on inflation and rent costs the government hopes for, Büyükduman said. Turkish exporters cashing in on end of Syrian conflict Winter resorts add to Turkey’s tourist hotspots Turkey hopes trade deals will protect it from Trump’s tariffs High rental costs were cited by treasury and finance minister Mehmet Şimşek in an address on January 8 as one of the leading structural problems affecting the Turkish economy, and one that needed to be resolved as part of wider economic reforms if inflation was to be brought under control. Rather than state-backed housing schemes, Büyükduman believes providing the private sector with incentives, such as tax relief on the construction of housing units with limited floorspace, could help Turkey to overcome its rental and low-cost housing shortage while also allowing market forces to decide on types and locations of developments. “Doing it this way would help to have accommodation built where it is needed instead of the state having to make plans, where and to whom resources will be allocated,” he said.