Activity expected in the housing sector in the new year: What is the outlook for prices?

Although 2024 was a stagnant year for the real estate sector due to high loan interest rates, activity began in the final quarter of the year. The Housing Price Index announced by the Central Bank showed that housing prices, which remained flat throughout the year, began to decline at the end of the year.

However, industry representatives say that this decline could give way to significant price increases in 2025.

'ACTIVITY IS REMARKABLE'

Real estate expert Rıdvan Akgün stated that there was a significant increase in sales in September and October, and shared the following information:

“The activity at land registry offices is remarkable. There is intense demand, especially for homes between 2-5 million TL. Buyers acting out of fear of price hikes have taken action with the expectation that prices will rise in 2025. We currently see that quality housing is standing out in both prices and sales.”

Akgün predicted that there could be a 25 percent increase in prices in the first quarter of 2025 and an increase of nearly 50 percent in the second half of the year, noting the following:

“Rising costs and the high prices of new homes will increase demand for second-hand housing. This situation may cause second-hand housing prices to compete with new housing.”

THE IMPACT OF FOREIGN EXCHANGE AND INTEREST RATES ON PRICE INCREASES

Real estate expert Ali Güvenç Kiraz stated that foreign exchange and interest rates will be decisive for the market. Kiraz said, “Expectations that interest rates would fall in 2024 brought limited activity to sales. However, because prices are still high, there is stagnation in the middle segment of the market. If an expectation of an increase in foreign exchange rates forms in 2025, housing sales could be negatively affected. Interest rate cuts, on the other hand, could increase activity.”

WHAT DO TURKSTAT DATA SAY?

According to data from the Turkish Statistical Institute (TÜİK), housing sales in October 2024 increased by 76.1 percent compared to the same period of the previous year, reaching 165 thousand 138. Istanbul was the province with the highest number of housing sales with 24 thousand 812, followed by Ankara and İzmir with 15 thousand 257 and 8 thousand 658 sales, respectively.

The real estate sector appears to be entering a new rebalancing process in 2025 due to cost pressures and changes in interest rates. Experts are drawing attention to the increase in demand, particularly for second-hand housing.