Housing sales alert: Turned negative

Turkey’s house sales decreased by 47.6% in December 2020 compared to the same month of the previous year to 106K units.

The spike in the interest rates, the weak TL an the absence of state subsidies for the sector that was supplied through state banks earlier in the year stand out as the reasons for the dismal sales performance.

Looking forward, home sales will turn negative for 2021 due to central bank’s rate hikes. President Erdogan’s growth model set for Turkey is mostly based on construction activity and the forced hike in the interest rates endangers the appetite for pre-mature rate cuts in 2021 to stimulate growth.

House sales, December 2020

In detail the December figures unfold as follows: ,

-The drop is the mortgaged house across Turkey with 14% share in total was more pronounced with 71% compared to the same month of the previous year to 14,631 units.   

-First house sales crashed by 51% to 36,898 units as it has 35% in total house sales.

-Second hand house sales also dropped by 45.4% to 69,083 units compared to the same month of the previous year.

-House sales to foreigners eased 16% to 4,427 units.

The overall  2020 house sales performance has a different story. The increase was 11.2% throughout the year over 2019 reaching 1,499,316 units. In the January-December period, sales of mortgaged houses jumped by 72.4% to 573,337 units, thanks to subsidized low interest rates following the initial peak of the pandemic.  2020’s “other types of sales” was 925,979 units posting a decreased of 8.9%.