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Date - 16th August 2007
Demand for real estate, which temporarily reduced because of the elections, has started to revive. This can be viewed as a result of the victory of the Justice and Development Party (AKP), which lead people to think political and economic stability will continue. Positive climate in the markets, reduced interest rates offered by banks and stable real estate prices in foreign currency terms have led to the revival of the sector. There has been a 20 percent increase in loans and sales in the past two weeks after the elections.
Growth rate increased by 10 percent: On the financial front, the weekly portfolio growth rate in the two weeks before the elections was YTL195 million, whereas by the end of July, a week after the elections, this rate increased to YTL220 million, reflecting a growth of 10 percent. According to bankers, many sectors including the Turkish real estate sector were at a temporary halt because of the elections. Sales dropped drastically especially in the Turkish real estate sector. The elections and applied interest rates played a role in leading to a temporary reduction in consumer interest in buying real estate. With the outcome of the elections banks started decreasing interest rates to an average of 1.30 percent.
Real action expected in autumn: After the elections a 15-20 percent revival has been noted in the sector, but it is expected that real action will take place in the autumn after the presidential elections, the end of summer vacations and Ramadan. It is expected that the figure will reach 50 percent in the autumn. But experts warn that the accumulated demand will lead to price increases. Turkish property agents, who say that price adjustments will be made in September, are asking investors to evaluate the period carefully. Finance experts say that loan usage has started to increase and that it will continue to increase also after the presidential elections. According to them, interest rates will drop as low as 1.20 percent and thus the weekly home loan growth rate will reach YTL 300 million. |
