Housing data from the Turkish institute of statistics has revelead the strongest September figures since 2021 and the best monthly figures of 2024. According to the Turkish Statistical Institute (TÜİK), 140,919 housing units were sold in September 2024, marking a 37.3% increase year-over-year. When analyzed by working days, an average of 6,710 housing units were sold daily.
New Constructions on the Rise
Of the homes sold in September 2024, 32% were new constructions, up from 30% in the same month last year. Sales of new homes increased by 47% compared to the same period last year.
Mortgage-Based Sales See a Surge
Home sales using mortgages saw an 87.4% year-over-year increase in September, with their share of total sales reaching 11.2%. In comparison, this ratio was 8% in September 2023. Meanwhile, sales to foreigners continue to decline, accounting for only 1.4% of total sales last month, down from 3% in the same month last year. Sales to foreigners fell by 31% year-over-year.
The Impact of Tight Monetary Policy
The tight monetary policy that began in 2023, along with rising mortgage interest rates, had caused mortgaged purchases to hit rock bottom. In periods when interest rates were closer to Turkey’s average, the share of mortgaged sales in total sales was around 25%. However, the latest data shows this share at 11.2%. Currently, the trend of cash purchases continues, and the real decline in housing prices appears to have been a determining factor in the September figures.
We expect good data to continue to emerge, depending on the decline in real prices and the campaigns of housing developers, as well as expected lower interest rate mortgage campaigns. It is likely that we are at the bottom in terms of mortgaged purchases. When mortgage interest rates decrease, that segment will provide support this time around.
Housing Sales by Type
- Total housing sales for January-September increased by 5.2%, reaching 947,236 units compared to the same period last year.
- Mortgaged sales in September amounted to 15,825 units, representing an 87.4% increase year-over-year but a 42.6% decrease for January-September 2024 compared to the same period in 2023, with a total of 92,310 units.
- Other types of sales increased by 32.8% in September, reaching 125,094 units, and by 15.7% for January-September 2024, totaling 854,926 units.
New and Second-Hand Home Sales
- First-time home sales in September increased by 47.1% year-over-year, reaching 44,858 units and accounting for 31.8% of all sales. In the January-September period, new home sales increased by 12%, totaling 300,879 units.
- Second-hand home sales in September rose by 33.1% year-over-year, reaching 96,061 units, accounting for 68.2% of total sales. For January-September 2024, second-hand home sales increased by 2.4%, reaching 646,357 units.
Sales to Foreigners
Sales to foreigners continued their decline, with only 2,022 units sold in September 2024, a 31% decrease compared to the same month last year. The share of total sales to foreigners was just 1.4% in September 2024, compared to 3% in the previous year. The top city for sales to foreigners was Istanbul, with 783 units sold. For the January-September period, sales to foreigners decreased by 39.1%, totaling 17,090 units.
Sales by Nationality
In September, the highest number of sales to foreign nationals were to Russian Federation citizens (346 units), followed by Iranian (163 units) and Iraqi (139 units) buyers.
Key Takeaways
This summary of the housing market in Turkey for September 2024 shows a recovery in general sales figures, with new home sales and cash purchases leading the way. While sales to foreigners remain subdued, a potential shift could occur if mortgage interest rates start to decrease in the near future.
