Residential property sales across Turkey jumped 54.4% year-on-year in November, official data showed, reflecting the lower borrowing costs after the Central Bank of the Republic of Turkey (CBRT) slashed interest rates.
A third of the total 138,372 house sales last month involved mortgages, the Turkish Statistical Institute (TurkStat) said. Mortgaged house sales amounted to 43,911, a 725% year-on-year increase. November marked the fourth consecutive month in which mortgaged house sales jumped compared to the same period last year.
The surge came after the CBRT kicked off an easing cycle in its monetary policy in July. After raising the key rate to 24% in September last year in the face of rising inflation, the bank has cut the rate a total of 1,200 basis points to 12% since July.
This easing cycle led public lenders and some private banks to lower interest rates, including on housing loans, as of August to spur domestic demand and support the recovery in the economy.
The drop in the borrowing costs stirs up house sales with mortgages, which had been declining on a monthly basis from January to July compared to the same period of 2018.
Mortgaged house sales in August jumped by 168% year-on-year and totaled some 34,148 units, constituting more than 30% of total sales in the sector in the month. In September, they skyrocketed by 410.2% year-on-year and made up almost 39.5% of all house sales in Turkey. In October, they jumped by 525.1% year-on-year, according to TurkStat data.
ALL OF 2018 SURPASSED
Mortgaged house sales in the last four months alone have surpassed those made in the January-July period of this year. Sales with mortgages totaled 186,281 in the August-November period, compared to 95,949 units in the first seven months, according to the statistical body.
Overall, the mortgaged house sales from January through November have surpassed the whole of 2018 in terms of house sales that involved mortgages. In 2018, 276,820 houses were sold with mortgages, and that figure reached 282,230 in the January-November period of this year.
Overall residential property sales in November amounted to some 89,626 in the same month of 2018.
Housing sales to foreigners slipped significantly in November. “House sales to foreigners totaled 3,988, decreasing 14.6% compared to the same month last year,” TurkStat said.
Istanbul, the country's largest city by population, enjoyed the lion's share of those sales to foreigners, with 47% (or 1,885 units). The Mediterranean holiday resort city of Antalya followed with 825 properties, while the capital Ankara came third with 218.
November data showed that Iraqi citizens made up the largest group of foreign sales according to nationality, as they bought 575 houses in Turkey. They were followed by Iranians with 500 house sales, Russians with 300, Afghans with 216, and Saudis with 174.