Residential sales were record-breaking in September, but the rate of construction stocks has also declined to historically low levels. Prices are under pressure.
Household sales in Turkey increased by 28.8 percent year-on-year in September, recording a record of 140 thousand 298 units. On the contrary, according to the calculation of the Turkish Construction Material Industries Association (IMSAD), the stock melting rate has also reached the slowest level. In the month of September, the melting rate of stocks was 2.5 percent on the basis of 2.7 square meters.
According to IMSAD, sales are at the highest level, while the decline in stock melting speed in new housing shows that there is an increasing supply of housing. This expansion of housing supply continues to exert pressure on prices. The possible slowdown in sales due to the end of tax cuts for housing sales in September may negatively affect the stock melting rate.
However, the increase in the number of players entering the market while the demand side of the construction sector is alive is also seen as a source of distress. The construction sector is expected to create a new supply-demand balance in the coming period, and the report emphasizes that the possibility of a systematic crisis in the construction sector is very low, but a consolidation on the supply side seems inevitable.
The increase in building construction costs was 22.1 percent on an annual basis as of the end of September. In the same period, material costs and labor costs increased by 25.1 percent and 12.9 percent, respectively, from the two main building construction costs.