There are two important questions that the Turkish economy and households are facing: what is the appearance of the private construction sector, which has become an important locomotive of the economy since 2009? And what about housing prices in 2017? The answer to these two important questions is explained in FinansInvest’s February report.
Situations Waiting For The Construction Industry
The construction and real estate sector is very popular in Turkey. The traditional investment plan of most Turkish citizens is undoubtedly to buy a house, then one more house and one more house. The reason for this trend is stable long-term rise in housing prices and demographic support. The sense of security that comes with bricks and mortar has an adverse effect on the high uncertainty that affects financial assets. Construction continues to be an attractive sector for entrepreneurs because of its stable and flexible demand, profitability and simplicity.
What Was The Housing Price?
At this point, since 2010, housing prices have increased by 9 percent and 5 percent per annum in Istanbul and Turkey, respectively, and it has been reported that Turkey is carrying 3 rd and 12 th ranks in 54 big economies. This was not a sustainable trend, and it ended. As a result of the concerns mentioned above, the increase in house prices may be below the inflation rate in 2017.
Nevertheless, it is not considered a housing price balloon in Turkey. Housing prices in Turkey are still not overvalued compared to other countries according to price-income and price-to-rent ratios. As a result, from a medium-term perspective, demographic and other factors will continue to support increases in housing prices; But a lower real rate will be realized when compared to the last few years.