As September approaches, the real estate market is expected to become more dynamic, driven by anticipated interest rate cuts. After a quieter summer due to high interest rates, the sector may see a resurgence in activity as these rates are projected to decline.
Currently, savings interest rates are at record highs of 55% due to soaring inflation, making deposit accounts an attractive option for investors. This has led many to keep their money in savings rather than invest in real estate, contributing to a slowdown in property transactions. Sellers are finding it challenging to attract buyers amidst rising rents and the lucrative returns offered by savings accounts.
Since July 2023, property prices in USD terms have consistently fallen, reflecting the impact of record-high interest rates on the market. However, the prevailing market consensus is that these prices have hit the trough of the dip. The high cost of borrowing has significantly influenced this downward trend, but with expectations of interest rate reductions, prices are anticipated to begin rising again.
In response to the anticipated market shift, state banks are preparing to introduce special offers on interest rates and loans for first-time buyers. These targeted promotions are designed to make homeownership more accessible and stimulate activity in the real estate market.
This renewal in activity is already reflected in the latest statistics. This reveals that nationwide housing sales in Turkey increased by 16.0% in July compared to the same month of 2023, reaching 127,088 units. This figure marks the highest monthly sales for 2024 and the highest July sales since 2020. However, sales to foreigners decreased by 16.1% year-over-year in July, totaling 2,350 units. Foreign sales accounted for 1.8% of total housing transactions, with Antalya, Istanbul, and Mersin being the top cities for foreign buyers. For the January-July period, foreign housing sales fell by 42.0% compared to the previous year, totaling 12,811 units. The largest number of sales to foreign nationals were made to citizens of Russia (485), followed by Ukraine (171) and Germany (162).
With schools reopening and a potential reduction in interest rates on the horizon, the real estate market is likely to experience increased activity. Investors are advised to closely monitor housing loan campaigns, which may offer favorable terms and stimulate market growth. Early investment could prove advantageous, as property prices are expected to rise with the anticipated market upswing.
Despite current challenges, rental rates are at a record high, contributing to a return on investment timeframe of 180-200 months. This emphasizes the potential for long-term gains in real estate, making it a promising investment avenue even amid prevailing market conditions.
