Turkish housing sales slipped 31.6% year-on-year in February, official data showed Monday, falling for the sixth consecutive month as borrowing costs rose from a summer low.
Some 81,222 houses were sold in the month, according to the Turkish Statistical Institute (TurkStat) data. Sales were down 37.9% year-on-year in January.
Sales boomed last summer on the back of a state-driven lending spree but have skidded in recent months as the monetary tightening cycle began.
This prompted mortgage sales to fall 66.5% last month to around 14,669 units after a 74.6% drop in January. The sales accounted for 18.1% of the total in February.
Sales of mortgaged houses in the whole of 2020 surged by 72.4% year-on-year, climbing to 573,337 units.
The Central Bank of the Republic of Turkey (CBRT) has lifted its policy rate from 10.25% to 17% with hikes in November and December. The benchmark rate was held steady in January and February meetings.
Economists expect the bank to raise its policy rate by as much as 100 basis points to 18% at its next meeting on Thursday.
Cheap loans extended to ease economic fallout from the COVID-19 pandemic drove the 11.2% year-on-year rise in the overall house sales in Turkey in 2020, when nearly 1.5 million houses, an all-time high, changed hands.
The data Monday showed nearly 24,737 newly built houses were sold last month, while the rest were second-hand sales.
Istanbul, Turkey’s largest city by population, had the highest share of residential property sales with 19.6% or 15,929 units.
It was followed by the capital Ankara and the Aegean province of Izmir with 7,757 and 4,659 house sales, respectively.
Residential property sales to foreigners fell 26% on a yearly basis, reaching 2,964 units.
Istanbul was the top location with 525 sales last month to foreigners, followed by the holiday resort city of Antalya and the capital Ankara.
Iranian citizens topped the list of buyers as they bought 477 properties in February.
They were followed by Iraqis with 432 units, Russians with 259, Afghanis with 230 and Kazakhs with 119.
The overall property sales in the January-February period totaled 151,809, down from 232,368 from a year earlier.
In the first two months this year, foreigners bought 5,639 houses in the country, an annual decrease of 28.7%.
They had purchased around 40,812 houses throughout 2020, a 10.3% year-on-year decrease from 45,483 units in 2019. It still marked the second-highest annual figure ever.
Higher rates are likely to limit the performance of the sector in 2021, and companies have said they expect no new burst of fiscal or monetary support this year.
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