Recent statements from Turkish experts have stirred conversations about the potential reduction in housing prices in Turkey, with claims ranging from 25% to a more astonishing 40%. The driving force behind this anticipated price drop is the forthcoming sale of specific state-owned land assets, set to open doors for widespread development. However, there are crucial nuances to consider.
The Sale of Treasury Lands:
Mehmet Ojaseki, the Minister of Environment, Urbanisation, and Climate Change, has announced the sale of state-owned lands, inviting mass development. The expectation is that developers will seize the opportunity, initiate rapid housing projects, and flood the market with new apartments, ultimately causing a decline in prices.
The Catch:
While this announcement made headlines across Turkish media, the fine print reveals a significant detail. The state-owned lands released for development will initially be allocated to developers operating within the framework of the state's preferential housing program called "Half is at our expense" (Yarısı Bizden). Importantly, this program is exclusively designed for local residents. Even foreigners who have recently acquired Turkish citizenship may not always be eligible to participate in such initiatives. Moreover, these projects primarily focus on budget-friendly mass housing in less urbanized regions.
Inflation and Realistic Expectations:
Considering Turkey's persistent inflation rate (forecasted to reach 58% by year-end, according to the Turkish Central Bank), it is prudent to approach the idea of a sudden housing price plunge with caution. Instead, a more plausible scenario is a slowdown in price growth. In certain areas like Antalya, developers are indeed offering slight price reductions on specific properties already on the market. However, these reductions typically amount to a few thousand euros for apartments priced over €100,000, equating to discounts of around 5%.
While there is excitement about the potential for housing price reductions in Turkey, it's essential to recognise the nuances of the situation. The state's land sale initiative primarily benefits local developers working on budget housing projects, making a significant price drop across the broader market less certain. Buyers and investors should stay informed and consider all factors when assessing the Turkish real estate market.
