'Specialized housing bank might satisfy Turkish real estate sector'

SEDA TABAK
ISTANBUL
Published 17.08.2016 22:34
Updated 17.08.2016 22:35

Stating that the real estate sector makes crucial contributions to economic growth, Özak GYO Chairman Ahmet Akbalık said: "Unfortunately, the banks do not share our appetite for success," suggesting the establishment of a "specialized housing bank." Pointing out the importance of developing a model that provides home loans to customers with convenient interest rates, Akbalık said this system would help increase the housing supply and also serve as leverage for both the sector and the country's economic growth.

The said banking model should be positioned among the state, banks, home manufactures and citizens, according to Akbalık. Regarding how the bank would be provided with resources, Ahmet Akbalık said: "The specialized bank would issue bonds with an interest rate close to the borrowing rates in Treasury auctions. This bond revenue will be returned to citizens in the form of long-term home loans with low interest rates." Pointing as an example to the systems in rooted real estate markets abroad, Akbalık said: "There are four big public institutions in the U.S. that implement this mortgage system. Nearly 70 percent of total bond issuances of the Treasury are used by these institutions for housing finance and the loan terms range from 10 to 30 years." Noting that real estate was one of the economic growth's locomotive sectors, Akbalık stressed that the Housing Development Administration of Turkey (TOKİ) and Emlak Konut, Turkey's biggest real estate investment trust, played a serious role during this period. "Banks unfortunately could not keep up with the real estate sector during this period. They do not share our appetite for growth. They could not create the groundwork that would support the real estate sector regarding the long-term home loans with convenient interest rates," Akbalık said.

Stressing that the most suitable definition of a foreigner that would buy a property in Turkey was "the permanent tourist," Akbalık said foreigners would buy houses in Turkey, travel, spend money for their vital needs and serve as volunteer promotional envoys by talking about their properties in Turkey. According to Akbalık, Turkish banks took an important step by dropping the home loan interest rates below 1 percent but said that this is not enough. Referring to the 40 percent increase in the profits of the Turkish banking sector during the first half of the year, Akbalık said while the banking sector added more to its profit, the real sector is bleeding out.

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