Housing loses value against inflation... Only one province in Turkey is profitable

The April housing price index results from the Central Bank of the Republic of Turkey (TCMB) have revealed the performance of housing investments against inflation. Although housing prices across the country have shown a nominal increase, when the effect of inflation is taken into account, many cities have experienced a real loss in value. However, Ankara has stood out from this situation, providing real gains to its investors.

In April, the housing price index showed a 1.5 percent increase compared to the previous month. However, when the inflation effect is removed, this increase turned into a 1.5 percent decline. On an annual basis, despite a 32.9 percent nominal increase, the real value of housing decreased by 3.6 percent.

ANKARA IS PROFITABLE

In examinations conducted on a provincial basis across Turkey, it was observed that only Ankara provided protection against inflation for housing investors. While the annual real return in the capital was calculated at 2.9 percent, Istanbul experienced a real value loss of 2.5 percent, and Izmir saw a loss of 5.1 percent.

Among the cities experiencing the highest real value loss, Hatay, Osmaniye, and Kahramanmaraş stood out. The annual real loss rate in these cities was determined to be 9.3 percent. They were followed by Ordu, Giresun, Trabzon, Rize, Artvin, Gümüşhane (-8.2%), Edirne, Tekirdağ, Kırklareli (-7.9%), Konya, Karaman (-7.5%), and Antalya, Isparta, Burdur (-6.9%).

EASTERN AND SOUTHEASTERN PROVINCES DECLINED LESS

It was observed that prices declined less in real terms in the Eastern and Southeastern Anatolia regions. While the annual nominal price increase in Eastern Anatolia reached 37.5 percent, the real loss was limited to only 0.3 percent. In Southeastern Anatolia, despite a 35 percent nominal increase, the real decline occurred at the 2 percent level.

According to analyses by Istanbul Real Estate Valuation, housing prices have also shown a significant increase in dollar terms. Since September 2018, prices have increased nominally by 163.8 percent in dollar terms, and when adjusted for US inflation, this increase stands at 107.6 percent. This situation reveals that housing continues to be a strong investment vehicle for long-term investors, even in foreign currency terms.

News Source: 12punto