What is the latest situation in housing prices? Expert explains

Due to high inflation and negative fluctuations in the economy, the problem of high prices in the housing market continues. Görkem Öğüt, co-founder and general manager of Endeksa, evaluated the April 2024 Housing Sales Statistics announced by TÜİK and the change in current prices.

"IT IS SEEN THAT IT HAS DECREASED BY 9 PERCENT"

Öğüt stated that when they look at Endeksa evaluations, prices continue to increase nominally compared to last year and the year before, but real price growth is at its lowest level, adding, "Average real estate sales price figures across Turkey show that the nominal increase in the housing market for sale continues. Accordingly, when looking at annual value changes, housing prices for sale have increased by 54 percent within a year as of April. According to Endeksa data, while the average housing price across Turkey has reached 3 million 358 thousand 940 liras, this figure has exceeded 7.5 million liras in Muğla and 4.5 million liras in Istanbul. However, when housing prices are adjusted for the current inflation in the country, it is seen that the annual change in sales prices has decreased by 9 percent," he said.

THE IMPORTANCE OF LIQUIDITY IN THE HOUSING MARKET

Emphasizing that purchases in the housing market have recently been carried out with liquidity, Öğüt underlined that there are tough negotiations, especially for high-segment housing, and stated that it is a period where cash is strong in real estate and that since it is a market revolving around cash, bargaining margins have also increased significantly.

Pointing out that the reflection of the real decline in the rate of housing growth on nominal values may take longer than expected, Öğüt assessed, "If it continues this way, it is possible for the gap that opened in 2022 to close within 2 years. We will be able to talk about figures that are falling not only in real terms but also in nominal terms. However, it should not be forgotten here that real estate, as in the world, remains one of the top, time-independent, good, and safest investment vehicles in our country as well."

"IT HAS STARTED TO REMAIN BELOW REAL LEVELS"

Stating that there is a considerable number of regions where price increases remain below inflation, Öğüt noted the following:

"Especially when we look at Istanbul, for example, we feel this price drop more in regions like Esenyurt, where houses are sold faster. In this region, the decline has reached 35-40 percent. Likewise, in regions like Antalya and other coastal cities, which rose very rapidly in August 2022, price growth has slowed down and started to remain below real levels."

According to Endeksa data, while rental housing prices increased by 55 percent in April compared to the previous year, the annual increase decreased by 8 percent when adjusted for inflation. According to TÜİK data, housing sales across Turkey decreased by 28 percent compared to the previous month and by 12 percent compared to the same month of the previous year, reaching 75 thousand 569 in April.

Öğüt made the following evaluations regarding mortgage sales:

"When looking at the last two years based on sales volume, the biggest factor behind this decline is the drop in mortgage sales. Mortgage-backed housing sales across Turkey decreased by 45 percent compared to the previous month and by 68 percent compared to the same month of the previous year in April, reaching 7 thousand 71. The share of mortgage sales in total housing sales was 9 percent. In the last 2-year period, this rate was at the 30-32 percent level."