Land investments are on the decline, housing sales are rising: Will 2025 be the year of housing?

Investors' preferences in the real estate market are changing every day. Investments in land and fields, which attracted significant interest especially during the pandemic years, have been on the decline as of 2024. Such investments reached record levels during the pandemic period and saw serious demand in 2021 and 2022. However, according to TUIK data, non-residential real estate (land-field) sales fell by 8 percent compared to the previous year at the end of 2024, dropping to 1 million 588 thousand.

So, what is the latest situation in housing sales? In contrast to the notable recent data on non-residential real estate, housing sales increased by 20.6 percent to 1 million 478 thousand 25. Reasons such as the dream of living in touch with nature during the pandemic, fear of earthquakes, and the desire for a detached house had led many investors to purchase land or fields.

According to the report by Türkiye Gazetesi; on the other hand, the expectation of obtaining high premiums from such investments had also driven up demand. However, as of 2023, profits obtained from land and field real estate began to be realized, and sales commenced. A large portion of the earnings from this was directed toward bank deposits. With the revitalization in the housing sector, shifts from deposits to housing were observed. Many investors or those wishing to become homeowners turned to buying housing by taking out loans in addition to their savings. According to experts, interest in housing began to increase from the second half of 2024, and there is a forecast that this trend will continue to grow in 2025.

WILL 2025 BE THE YEAR OF HOUSING?

So, why did investments turn from land and fields to housing? Real estate sector experts listed the reasons for this situation as follows:

Demand for branded housing projects has increased: Investor interest has grown in reliable projects with high social amenities developed by large construction firms.

Contractor campaigns have been effective: Down payment discounts, long-term payment plans, and additional advantages have attracted buyers.

Decrease in bank interest rates: The reduction of housing loan interest rates by some banks has led investors to turn toward housing.

Housing prices remaining affordable relative to the market: The expectation that housing prices are still at reasonable levels compared to market conditions and that prices will rise has prompted investors to take action.

Experts state that 2025 will be the year of housing and that branded housing projects, especially in metropolitan areas, will attract more interest. While it is among the forecasts that the decline in land and field investments will continue, it is estimated that the activity in the housing sector will persist.

LATEST SITUATION IN LAND PRICES

So, what is the latest situation in land prices? At one point, with the serious increase in demand for land and fields, prices also rose. For example, the price of a 500-square-meter plot of land in the immediate vicinity of Istanbul caught up with the price of a 2+1 apartment in the metropolis. Consequently, interest in land also decreased. Experts summarize this as follows: For a period, people turned to more affordable land and fields because they could not buy housing. The goal here was to own a title deed with small investments and to be able to sell the land in hand and buy a house when the time came. However, when landowners sent prices soaring in direct proportion to the incoming demand, buyers began to approach the situation with the logic of "I will buy a 1+1 house instead of land, and it will also provide rental income." Naturally, a shift toward housing occurred instead of land or fields.

"AN UNAVOIDABLE REALITY"

Turkish Contractors Association (TMB) President M. Erdal Eren, in his statement on the anniversary of the February 6, 2023, Kahramanmaraş-centered earthquakes, said that disaster-priority urban transformation must be carried out rapidly to prevent new suffering in our country, which is located in an earthquake zone. Eren stated, "Accelerating the urban transformation process is an unavoidable necessity. While there is a need for an average of 800 thousand to one million new houses in our country every year, a need for 650 thousand new houses has arisen in addition to this figure following the earthquake. Furthermore, considering that approximately 6-7 million houses carry risks and need to be renewed, it is clear that disaster-focused transformation is an unavoidable reality. In order to prevent new suffering, it is expected that steps will be taken by the state to reduce land costs, provide financing convenience, and implement deep-rooted reforms regarding the shortage of qualified intermediate staff that the sector is experiencing."

"ONE OF THE BIGGEST PROBLEMS IS THE DIFFICULTY IN FINDING QUALIFIED WORKERS"

On the other hand, the "Construction Sector and Labor Dynamics: Turkey'24" research commissioned by GYODER to BETAM was shared with the public. GYODER President Neşecan Çekici said, "One of the biggest problems of our sector is the difficulty in finding qualified workers. This situation has increased even more, especially after the earthquake. This crisis can be overcome not only with short-term solutions but with long-term strategies. Our report, which we have prepared, sheds light on the current state of our sector while also offering an important roadmap for the future. In this context, as GYODER, we are starting work to establish a 'Long-Term Strategic Labor Platform' with 7 sectoral NGOs and unions in order to increase the quality of the workforce and produce strategic solutions. Our goal is to support the human resource structure that will enable sustainable development in the sector and to take on a leading role in this field."

News Source: 12punto