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Türkiye’s housing market recorded its strongest month of the year in July, official data showed on Wednesday, as demand remains strong despite high borrowing costs.
Residential property sales grew 12.4% year-over-year last month to 142,858 units, the Turkish Statistical Institute (TurkStat) said, marking the second-highest July figure ever.
The figure extended the upward trend that began a year ago and signaled the resilience of the housing market despite tight monetary conditions and inflationary pressures.
Monthly sales had ranged between 107,000 and 130,000 units in the first half of the year. Last month’s performance was second only to the pandemic-driven boom in July 2020, when a low-interest loan campaign pushed sales to a record 229,357 units.
The TurkStat data showed mortgaged sales leaped 60.3% on an annual basis in July to 18,425 units, accounting for 14.9% of all house sales.
The country’s largest and most populous city, Istanbul, once again led the market with 23,152 units sold last month. The capital Ankara followed with 12,491 sales, while the Aegean city of Izmir recorded 7,815 sales.
New home sales climbed 7.8% year-over-year to 43,984 units, while second-hand sales jumped 14.6% to 98,874 units, the TurkStat data showed.
Mortgaged sales almost double
Last month, the Central Bank of the Republic of Türkiye (CBRT) cut its key policy rate by 300 basis points to 43% as it relaunched an easing cycle that was disrupted by political turmoil earlier this year, as markets calmed and disinflation continued.
The bank had hiked its benchmark policy rate to 46% from 42.5% in April and lifted its overnight lending rates to 49 % following market volatility over the arrest in March of Istanbul Mayor Ekrem Imamoğlu.
Imamoğlu was jailed pending trial over graft charges.
Before April, the CBRT had gradually cut its key policy rate from December as inflation eased.
Official data last week showed inflation slowed to 33.5% in July, the lowest rate since November 2021, having peaked at 75% in May last year.
Sales to foreigners declined by 18.6% to 1,913 units last month, according to TurkStat. By nationality, the highest number of sales was made to citizens of the Russian Federation, with 315 units sold. Russia was followed by Iran with 152 units and Germany with 135 units.
From January through July, overall sales reached 834,751 units, the second-highest seven-month total ever and a 24.2% increase from a year ago.
The peak was recorded in 2020 when 854,126 units were sold in the first seven months.
Mortgaged sales almost doubled during this January-July, rising 93.2% to 121,515 units, the TurkStat said. Purchases by foreigners declined by 12.1% to 11,267 units.
In the whole of 2024, sales grew by 20.6% to about 1.48 million units, returning to levels last seen in 2022.
What do industry officials say?
Industry representatives say this year’s sales are expected to surpass 1.5 million units, highlighting persistent demand fueled by high rents and the fact that housing price increases currently remain below inflation.
“Our expectation that this year’s total sales will exceed 1.5 million has strengthened further, driven by falling inflation and declining interest rates,” Ziya Yılmaz, head of the Association of Housing Developers and Investors (KONUTDER), said.
Yılmaz pointed to movement in both first-hand and mortgaged sales. “We believe that improving credit conditions and taking steps toward the development of suitable land are crucial for maintaining this positive outlook,” he noted.
Engin Keçeli, head of the Association of Turkish Contractors and Real Estate Developers (INDER), said that despite high interest rates, the slowdown in price increases, affordability in certain segments and surging rents are compelling people to buy.
“As long as this price stagnation persists, sales will continue to rise. Long-suppressed demand has now turned into a necessity,” Keçeli said.
He says demand will keep rising, but supply-side challenges are a concern. “All our developers must roll up their sleeves for new projects and construction,” he noted.
“I expect record-breaking sales figures by year-end. In 2026, we could reach even higher sales volumes.”
According to Ismail Özcan, president of the Association of Real Estate Marketing and Sales Professionals (GAPAS), the increase in mortgaged sales despite high borrowing costs indicates “a renewed rise in the motivation to transition from renting to homeownership.”
July is usually a sluggish period for the housing market due to the holiday season, Özcan said.
“While July has traditionally been a period marked by rising sales to foreigners, the situation now appears to have reversed,” he added.
