Turkey faces worst real estate crisis in history, central bank reveals – Middle East Monitor
Turkey is currently facing one of the worst real estate crises in its history after a number of economic causes led to the doubling of property prices in the country, data from the Central Bank of Turkey has revealed.
According to the publication by the bank of its annual report report last week on the housing index in Turkey, the average price of a property in the city of Istanbul fell from 750,000 Turkish liras last year to 1.6 million Turkish liras ($110,000) in 2022.
📈 İstanbul’da ortalama konut fiyatı 1.6 milyon TL’yi aştı pic.twitter.com/7In7NfuXlV
— Bloomberg HT (@BloombergHT) April 18, 2022
This sharp increase in property prices was seen across the country, with Istanbul’s year-on-year increase in February amounting to 106.3% and even the less-developed predominantly Kurdish cities from Diyarbakır and Sanlıurfa with an increase of 111%. Across the country, the average increase in home prices that month was 96.4%.
The skyrocketing property prices come at a time when Turkey is going through its own economic crisis and has seen its lira fall over the past year. The causes of the increase are believed to be inflation, imbalance between supply and demand, rising construction costs and the ongoing Russian war in Ukraine which has delayed materials and created shortages.
According to the London-based outlet Middle Eastern eye, a ton of cement cost 500 lira ($60) in September, but now a ton of cement costs about 1,400 lira ($95). In terms of inflation, which rose to 61.6% last month, wages have not kept up sufficiently, while property prices have increased twice as much as wages. That’s all while the monthly minimum wage in Turkey is only 4,253 liras ($290).
Turkey: Panic home buying increases in Istanbul, report says
These factors have made it increasingly difficult for Turks and their families to buy houses and properties, even small apartments. At the head of the construction company Kiptas, Ali Kurt, declared recently, “It becomes impossible for people to buy an apartment because one square meter of apartment costs about 14,000 lira ($955) in Istanbul. In other words, an average apartment of 100 square meters costs 1.4 million lire ($95,000).”
Another effect of soaring real estate prices would be growing dissatisfaction with the foreigners and refugees that many Turks are increasingly detaining, as they blame the millions of refugees in the country for allegedly having occupied space and foreigners to have purchased properties in the country.
This is due to laws that encourage foreigners to do so, with the Turkish government currently granting citizenship to any foreigner who buys property worth $400,000. This reportedly led to the sale of 293,000 properties worth $41.3 billion to foreigners over the past nine years.
The great famine is coming and the world must prepare for it