Home sales recorded a whopping 209.7% year-on-year increase in June after public lenders announced mortgage loans at historically low rates to help avert an economic fallout from the coronavirus pandemic.

June recorded the highest monthly level of sales since last December, back when more than 202,000 houses were sold as the sector again benefited from interest rate cuts.

According to the Turkish Statistical Institute (TurkStat), a total of 190,012 units were sold in June, with sales of mortgaged houses accounting for 53.4% of the total.

Istanbul – Turkey's largest city by population and one of its top tourist centers – took the lion's share of housing sales with 21,915 units in June.

It was followed by the capital Ankara and the Aegean province of Izmir with 21,915 and 11,690 housing sales, respectively.

Meanwhile, sales to foreigners recorded a decline despite the overall increase seen in the real estate sector across the country. In June, a total of 1,664 units were sold to foreign nationals, a 38.1% decline compared to the same period of last year.

Istanbul was the top city for foreign buyers with 730 property sales, followed by the Mediterranean resort city of Antalya with 277 sales and Ankara with 180.

Iranian citizens were the top buyers of Turkish properties with 398 housing sales. Iraqis, Chinese and Azerbaijanis followed the Iranians on the list.

'Cheap mortgages historic opportunity for buyers'

Treasury and Finance Minister Berat Albayrak said Monday that the low-interest rates took effect and housing sales last month reached the historical high for the month of June.

The minister tweeted that the recovery in the housing sector will revive economic activity in 250 different sub-sectors.

Turkey’s three largest state lenders extended four new loan packages on June 1 to invigorate the transition to post-coronavirus normality and revive social life.

Sedat Kılınç, CEO of construction company Sedat Kılınç İnşaat, said low-interest mortgages present a historical opportunity for homebuyers but urged people to beware of real estate companies inflating prices.

Kılınç said the cheap mortgage loans was a push by the government for the real estate sector to sell units they have at hand and start making new investments to expand businesses and support other sectors.

Ziraat Bank, VakıfBank and Halkbank's packages include mortgages for new houses as well as loans for vehicle purchases, locally manufactured goods and holiday expenses at annual interest rates running below inflation.

Mortgages for new homes can have up to a 15-year maturity, with interest rates as low as 0.64% and a grace period of up to 12 months, the banks said.

Last week, the Banking Regulation and Supervision Agency (BDDK) announced that housing loan balance increased by TL 32.2 billion ($4.69 billion) from Jan. 1 to June 26, breaking an all-time annual high.

The highest amount was earlier recorded in 2017 at TL 27.6 billion.

The balance, which was TL 188.5 billion at the end of 2018, had increased by TL 10.2 billion at the end of 2019 to TL 198.7 billion.