House Price Index (HPI) increased by 2.2 percent in April compared to the previous month and reached 1257.7. Monthly CPI inflation in April was 3.18 percent.
In the statement made by the CBRT, it was said:
“CPI, which increased by 48.4 percent compared to the same month of the previous year, decreased by 13.3 percent in real terms in the same period.
When the developments in the housing price indices of Istanbul, Ankara and Izmir are evaluated, an increase of 2.1, 3.0 and 1.9 percent, respectively, was observed in April 20-24 compared to the previous month. “The index values increased by 37.6 58 9 and 45.1 percent in Istanbul, Ankara and Izmir, respectively, compared to the same month of the previous year.”
The data indicates the sharpest monthly decline in real estate prices measured over the last 14 years, adding yet another piece of evidence to Turkey’s deflating real estate boom.
For instance, house sales in Türkiye dipped in May compared to the same month last year, according to the Turkish Statistical Institute (TURKSTAT). A total of 110,588 houses were sold, representing a 2.4% decrease.
Looking at a broader timeframe, house sales for the January-May period also showed a slight decrease of 3.4% year-on-year, reaching 465,761 units.
Mortgage Sales Slump
The leading cause of the housing slump is mortgage sales which witnessed a significant decline in May, dropping 63.9% compared to May 2023. Only 9,909 houses were sold with mortgages, constituting just 9% of total sales. This trend continued for the first five months of 2024, with mortgaged sales falling 58.7% year-on-year to 44,602. The share of units sold on mortgage loans dropped to 10% from historic average of 30%, as banks upped rates and tightened eligibility conditions.
Also, foreigners abandoned the property market as prices reached London and Paris levels, while fear of new taxes on second homes and on transactions reported at prices below the market to the authorities.
With rates to remain high in 2024-2025, and median household incomes not benefiting from the country’s 5% GDP growth, the house slump could well extend Nito 2025. Prices could decline faster if house flippers and those who bought for investment purposes decide to sell at a loss of benefit from relatively high TL deposit yields.
Turkish press sources, PA Turkey staff
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