Turkey home sales hit nine-year low on rising interest rates

Unsplash.com/Hulki Okan Tabak

Sales of residential properties in Turkey fell to their lowest levels in nine years in 2023 due to rising interest rates and inflation.

Home sales declined 17.5 percent year on year to 1.23 million in 2023, Daily Sabah newspaper reported, citing Turkish Statistical Institute (TurkStat). 

The central bank has raised its policy rate by 3,400 basis points since June 2023 and said it is committed to calming inflation, which stood at 62 percent in November.

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The bank has signalled that the aggressive hikes may end soon, but it vowed to maintain tight monetary policy as long as needed.

Makbule Yönel Maya, general manager of TSKB Real Estate Appraisal, said a sharp fall in house sales in the last quarter of 2023 led to the lowest level in the past nine years.

She attributed the drop to the central bank’s restrictive regulations on housing loans for those purchasing a second home, coupled with the high-interest rates of 3.5 percent on mortgage loans.

Total sales fell 33.4 percent in December 2023 year on year to 138,577 units, data showed. Mortgage sales declined 72.3 percent year on year last month and 36.6 percent in 2023, making up 14.5 percent of total sales.

In addition, the minimum investment required for foreigners to obtain citizenship through real estate purchases reached $400,000 in 2023 from $250,000.

Russians continued to top the list of foreign buyers, with 10,560 houses purchased last year.