Turkish house sales jumped 55.8% year-on-year in January, the best-ever start to the year for the housing market, according to a national statistical body Friday. This marked a leap for a third consecutive month after the central bank slashed interest rates.
A total of 113,615 houses changed hands last month, up from 72,937 the previous year, the Turkish Statistical Institute (TurkStat) said.
The Central Bank of the Republic of Turkey (CBRT) has slashed its key interest rates by 1,275 basis points since July last year after having raised the key rate to 24% in September 2019 in the face of rising inflation. The CBRT lastly cut its key interest rate to 11.25% last month due to the stabilizing Turkish lira and a drop in inflation.
Its easing monetary policy allowed public lenders and some private lenders to slash, among others, interest rates in mortgage loans, playing a major role in the increase of sales.
Sales with mortgages rose by 546% last month, official data showed. The institute said more than a third of sales involved mortgages.
Residential property sales to foreigners also rose significantly – up 23% year-on-year to 3,907 units, and also the highest-ever January in terms of sales to foreigners.
Istanbul, the country's largest city by population, enjoyed the lion's share of sales to foreign buyers, with 48%, or 1,875 units.
The Mediterranean holiday resort city of Antalya followed with 762 properties, while the capital Ankara came third with 235.
January data showed that Iraqi citizens made up the largest group of foreign sales according to nationality, as they bought 739 houses in Turkey. They were followed by Iranians with 678 house sales, Russians with 254, Afghans with 204 and Yemenis with 142.
Nearly 1.35 million housing units were sold in the country in 2019, while up to 45,500 houses were bought by foreigners, seeing a 14.7% increase compared to the previous year.
Industry representatives expect the upward trend to keep its pace throughout this year and project year-end sales to foreigners to exceed 50,000 units.
Nevita Board Chairman Faruk Akbal said 16,600 more house units were sold compared to the same month last year, stressing the effect of rate cuts and pace gathering in the economy.
If the trend keeps up its pace, Akbal said sales to foreigners could hit 55,000 units.
Anatolian Side Building Contractors Association (AYİDER) Deputy Chairman Ahmet Erkurtoğlu stressed the importance that the sales have exceeded 110,000 units in the first month of the year, adding it was an indicator that wheels are now turning in the sector.
The buoyancy will last as long as interest rates on house loans are under 1%, Erkurtoğlu said.
“We think the buoyancy in house sales will continue throughout this year. ... The pace in sales to foreigners will also continue because of the high interest,” he noted.