Turkey's Housing Market: Challenges and Future Expectations

Housing market realities in Istanbul: prices high, demand affected by various factors, no opportunity expected before 2025.

### Understanding the Current and Future Real Estate Market in Turkey
* 🏠 Despite nominal price decreases, real estate demand in Turkey remains relatively stable, with a **3.5% decrease in housing sales** in the last year.
* 💰 The affordability of housing is a major concern, as **current prices are not aligned with average personal incomes**.
* 📉 Economic stability measures are expected to keep interest rates high until at least **2025**, limiting the attractiveness of **mortgage loans**.
* 🏗 Urban transformation projects and earthquake zone constructions will impact **housing supply and demand dynamics**.
* 🏛 Proposed tax reforms, including potential changes to property taxes and sales taxes, may affect **real estate transactions and prices**.
* 🔮 The speaker predicts that the Turkish housing market will not present **significant buying opportunities** until the end of 2025, as prices continue to adjust.
* 🌐 The content creator also mentions the importance of **economic stability** and potential changes in **interest rates** that could alter this timeline.

Hello dear tenants, I wish you all love from F channel who are looking for a house at an affordable price. I'm checking the news again on the weekend. An announcement from the Istanbul Planning Agency says that the housing prices and rents in Istanbul's favorite neighborhoods are higher than Barcelona. I chuckled to myself. In Turkey, housing is still cheap, seize this opportunity, some say. They don't know the truth. Now, I will tell you the realities of the housing market. Frankly, the housing market is brain dead. Especially on Friday and Saturday, after the Vice President of the Central Bank of the Republic of Turkey (CBRT) and a member of the Monetary Board, Professor Cevdet Akçın, made statements to Reuters, we know about the interest rates, but there are many other variables that determine housing prices and demand beyond interest rates. I will explain these to you. Of course, housing is not just a need, it is not purchased only for investment. Many people wonder, Should I buy a house or should I endure high rents? If you say that housing prices are falling or will fall, when will the opportunity arise, when is the best time to buy a house, they must be asking themselves these questions.

I will find answers. As I mentioned in this video, there is the issue of interest rates, the question of how much per capita incomes will increase, and when they will catch up with housing prices. Construction activities of housing in earthquake zones have a significant impact on the dynamics of the housing market. Besides these known and unknown factors, there is talk of another tax package coming. They say that real estate tax and real estate purchase tax will be adjusted according to Rice or increased for some houses. Do you know, now a ghost housing story has emerged. It is said that there are 600,000 houses with debts in Istanbul. Will the government somehow bring these into the market? And finally, of course, there is urban transformation. Before the elections that Turkey urgently needs, we are starting right away, making promises about urban transformation. Will 100,000 houses in Istanbul really be subject to urban transformation every year? Will this policy, let's say, involve the demolition and reconstruction of 150,000 houses? How will all of these affect housing prices? But first, with your permission, I would like to thank the sponsor of this video, C.

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You can subscribe to Kize with packages starting at 429 lira per month according to your needs. Thank you very much to C for sponsoring such programs. As I mentioned, I don't need to prove to you that housing prices have dropped. Thus, the most boring part of the video is left behind for all of us. Everyone is feeling this now. But we also have indices. Let me mention them with your permission; all of them show that housing prices have dropped. For instance, the Central Bank of the Republic of Turkey (CBRT) publishes the housing price index every month. In addition to this, there is the index of INDEKA, which dates back to a very old history, showing both house sale and rental prices. Recently, Betam Research Center collaborates with sahibinden.com to publish a housing market outlook every month. Despite all this, we see that housing prices have decreased not only nominally but also in real terms. Although there are occasional nominal declines, the demand for housing has not significantly decreased. We rely on the official housing sales statistics of the Turkish Statistical Institute (TUIK), which were published as of May, I believe the most recent data. According to these, housing demand has decreased by around 3.5% in the last 12 years. This indicates that there is still a demand.

Our people, that is, when housing prices drop, they buy. This is quite natural. In a country like Turkey, where the population growth rate is still above 1%, there will always be a need for housing until the population ages at least in the next 10-15 years. At this point, we ask the following question: Have we reached the bottom of these decreases, or when will we reach it? If you are planning to start a family, it may seem small to you now, or maybe I have children, or I have started working from home, and I am looking for a new, larger house. Let's look for an answer to the question of when the opportunity will arise. Of course, the problem lies in the first answer, which is income. In other words, no matter what interest rates are at the current prices, you cannot afford housing with the average personal income. Besides the decrease in housing prices, personal incomes also need to increase faster. Unfortunately, I cannot give you good news in that regard. We are currently in the midst of a stability or austerity program. Although the implementers and Mr. Erdoğan reject this austerity program, achieving the goal of low inflation for Turkey will require some sacrifices.

Sacrifices mean a recession or a very slow growth of the economy. If the economy is growing slowly, your income will probably grow slowly as well. So, let's say this program, assuming there won't be an early election and Mr. Erdoğan hasn't changed his mind, and he said, Mehmet Şimşek, my son, you are doing a good job, carry out the program as you wish. Even if a few people suffer, as long as you bring me a Turkey with low inflation, whenever it happens, it won't be before 2026, my friends, even under the best conditions, we will see that inflation has dropped to 25% to 30% by the end of 2025. But I consider this a success. Towards the end of 2006, we will gradually see inflation declining towards the 10% range. However, after that date, Turkey's sustainable rapid growth that creates employment may be possible. Therefore, if your personal income is currently not sufficient to buy a house, it probably won't be enough for the next 2 years, or if there are no significant drops in house prices, your income won't be enough to buy a house due to interest rates. Then, interest rates.

Let's get to the topic because it is a very important topic. Of course, we are buying a house with a mortgage loan, or if we are going to buy a house, we have our savings as an alternative, we have deposits. When deposit interest rates are high, the demand for housing decreases. In Turkey, there is a discussion about interest rate cuts. Actually, this discussion should be over by now. As I mentioned, Cevdet Akçay stated in his statement to Reuters for the first time that the Central Bank of the Republic of Turkey (CBRT) mentioned the household and private sector surveys it organizes. These measure inflation expectations. I won't give a specific number. If you check my previous video, I explained this topic in more detail there. However, the Central Bank's target for the end of 2025 is to decrease inflation to 14.4%. Probably, when the inflation report for the third quarter of the year is announced on August 8, this target will be slightly revised upwards to around the 20s. But both households and the private sector have inflation expectations in the 50s, 60s, 70s, so I don't even need to give a specific number. These expectations are calculated in people's minds for 12 and 24 months ahead, aiming to reach the inflation target in 2025. Interest rates...

Interest rates are not reduced, of course. Unfortunately, in Turkey, interest rates have become a political propaganda material. Well, if Mr. Erdoğan gives up on this program, the economic stability program, and returns to the old days, we will experience a rapid decline in interest rates. I do not think such a thing will happen. At least until the first half of 2025, I believe he will stick to this program and even if it is not sufficient, additional powers will be given to Şimşek, such as new tax packages and budget expenditure constraints. Therefore, I don't see any developments that will ease us in terms of interest rates. So, in 2025, we may not have access to an interest rate environment that can make loans attractive. Let's move on to the other changes, which will constitute the advantages of my video. If you have been patient until this point, there are currently many housing and construction videos on YouTube. I follow them all with respect. You will see that I say different things. We are talking about three very important variables here, and when will earthquake construction activities really begin? In September or October, the package will be announced. Will real estate sales and property taxes be added to the rent increases?

Thirdly, as I mentioned, let's talk about urban transformation. Let's return to the earthquake zone. Why are the constructions in the earthquake zone important? They are important for two reasons. When we finish the constructions in the earthquake zone, temporarily, those who left the region because their houses were destroyed in the earthquake can return. This will reduce the housing demand in other regions, lower housing prices, and most of the human resources and materials used in Turkey's construction sector, from cement to iron and steel, are currently facing a high demand increase. Because there is continuous construction activity in the earthquake zone. These will end by 2025 or slow down significantly. At that point, we will see a decrease in construction costs, and all our citizens in the earthquake zone will regain their old houses. Generally, this will have a reducing effect on housing prices, and producers will also agree to this decrease because their cost increases will also slow down. Now, let's move on to the tax issue. We don't know, so far, a savings package has been announced by the government.

Corporate Tax and a tax package for private employees were announced, both of which turned out to be nonsense, to be honest. The new Tax package was enacted; once, revenues of 400, 500, 600 billion were expected, but by 2025, it had decreased to 150 billion. 150 billion, considering Turkey's economy size of around 40 trillion, almost makes no sense. Now, according to some, Mr. Erdoğan said, This is enough, don't come up with more tax packages. However, official statements, the latest of which was made a month ago by Mehmet Şimşek from Cev Akçay, indicate that the first of these tax packages will be followed by new ones. In the second tax package, I believe that when Mehmet Şimşek faces Erdoğan, he will demand this: why are we talking about the fair taxation of the housing market? It is a well-known fact that in real estate transactions, both buyers and sellers voluntarily understate the housing prices to avoid taxes or reduce the tax burden, then transfer the price difference tax-free through bank transfers, hotel contracts, and so on. You cannot prevent this, but you can

There is a solution. This is already partially implemented, meaning the state will determine what the housing prices should be in each region and will say, My friend, I don't care about the price you declare to me, but you will pay a sales tax at least based on this price. Also, every year we pay property tax, you know. Here, the property declaration values we report to the state are nonsense compared to the market value. You say 500 liras for a house worth 1000 liras. This is the same all over the world at the same time. So, I'm not making a big criticism. Here, the solution is again the state will say, Hey, where do you live, Atilla? I live in Gokturk or Kemerburgaz. The property value in your region is this much per square meter. You cannot pay taxes below that. These will be realistically determined, I emphasize, taxes will increase. Frankly, you will pay more taxes when buying a house or if you have bought a house, the property tax will increase. So, how will these affect the housing demand? Well, my friends, when you tax something,

In the market, if demand is high, the buyer pays the tax; if demand is weak and shops are struggling, the seller bears the tax. Currently, due to generally low housing demand, sellers will bear these taxes, thus not significantly increasing housing prices. These taxes affect housing purchases, specifically investment purchases. Just like you consider the automotive tax when buying a car, you will now also consider it when buying a house. You will think, Okay, I'm buying this house now, even with a mortgage. Will I be able to pay this tax as well? This has a decreasing effect on housing prices because you will pay a higher tax, possibly making the house unaffordable at the price you could reach. Therefore, these factors reduce housing demand. Now, let's talk about urban transformation, but before we get into that, I have a request. If you have stayed with me up to this point, YouTube has a membership program where you can subscribe to Atilla Ihsan's exclusive videos for a fee.

It's a very small fee, and I shoot special videos. You can enter my channel below to see videos exclusive to subscribers. If you like the topics, I recommend you subscribe. Urban transformation is a very serious story, I mean, in Turkey, these buildings are not earthquake-resistant. Especially the ones built before the year 2000, those built afterwards may not be very sturdy, we don't know because there is no supervision in Turkey. Before the elections in Istanbul, it was said that 100,000 houses in Istanbul would be subject to transformation every year, and this will be implemented in other cities as well. We are talking about around 150,000 houses being subject to urban transformation. Of course, urban transformation is also a source of profit for everyone, so in construction, apartment owners come together and want to get back more than they gave to the contractor when they gave their homes. Therefore, after urban transformation constructions are completed, they increase the housing supply because you are demolishing 1 square meter and maybe building 1.5 square meters in its place. Therefore, in the long run, at some point, what is built is rebuilt and put up for sale again or

When the number of housing units offered exceeds the number of houses demolished due to urban transformation, we will see that the housing supply expands and when the housing demand remains constant, this lowers the price. But this will not be the case in the first few years, especially in small neighborhoods where small constructions are built between neighborhoods. Contractors generally take their time with these, let's say it takes about 2 years, on average. Let's say 2 to 5 years, it doesn't really matter. Until 2.5 years after the period when the urban transformation movement seriously began, the number of demolished buildings will exceed the number of new buildings put into service. So, the housing supply will actually shrink, and in this case, people will naturally be willing to pay higher prices or rent out their houses while they are under construction, which will increase rental prices. In short, to sum it up, friends, let me put all this together for you, and if you ask me what I think, I will tell you. By the end of 2025, there won't be an opportunity in the housing market. Probably, housing prices will continue to decline. According to my rough estimates, in Turkey, the housing market will not offer an opportunity before the end of 2025.

There is still a bubble between 155% and 3030% in prices, there is foam, this needs to deflate. However, only after that, the market will settle at a reasonable level. Of course, if another election period begins, this economic stability program should not be abandoned. Interest rates will decrease rapidly. Then, much earlier opportunities will arise in housing, and that's when we will talk. For now, there are no opportunities or anything, the decline in housing prices continues. Dear friends, thank you all for watching. If you subscribe to my program, I would be happy. And of course, I sincerely thank you all for your support to my channel. I wish you all low-rent months.

Konut piyasasının beyin ölümü gerçekleşti | Atilla Yeşilada

ATİLLA YEŞİLADA

The Complex Realities of the Istanbul Housing Market

Housing prices and rents in Istanbul's popular neighborhoods have surpassed those of Barcelona, despite claims of affordability.

The market is influenced by various factors including interest rates, income levels, construction activities, and potential tax adjustments.

Urban transformation promises and the issue of ghost housing with debts further contribute to the complexity of the housing market.

The Current State of Housing Prices in Turkey

Housing prices in Turkey have been consistently decreasing, despite a continued demand for housing due to population growth.

The decrease in prices has not significantly reduced the demand for housing, as people tend to buy when prices drop.

However, the affordability of housing remains a challenge, as the average personal income is not enough to afford the current prices.

The projected slow growth of the economy and inflation rate suggests that it may take until 2026 for housing prices to become more affordable.

The Impact of Interest Rates and Construction Activities on Housing in Turkey

The Central Bank of the Republic of Turkey is aiming to decrease inflation to 14.

4% by the end of 2025, but both households and the private sector have much higher inflation expectations.

Interest rates in Turkey have become a political issue and are not expected to decrease significantly until at least the first half of 2025.

Construction activities in the earthquake zone are important for reducing housing demand in other regions and lowering housing prices, with a potential decrease in construction costs by 2025.

The Controversy Over Tax Packages and Real Estate Taxation in Turkey

The announced corporate tax and tax package for private employees were ultimately deemed ineffective.

The projected revenue from the tax package decreased significantly by 2025, causing skepticism given Turkey's economy size.

There are discussions about implementing a new real estate taxation system to prevent underreporting of housing prices and increase property taxes, which is expected to impact housing demand.

The Impact of Tax Burden on Housing Demand and Urban Transformation in Turkey

High housing demand shifts tax burden to buyers, while low demand makes sellers bear the tax, reducing the impact on housing prices.

The housing tax has a decreasing effect on demand, as buyers consider the affordability of the tax along with the house price.

Urban transformation in Turkey, driven by the lack of earthquake-resistant buildings, is set to affect around 150,000 houses, increasing housing supply in the long run and becoming a source of profit for construction stakeholders.

The Impact of Urban Transformation on Housing Prices in Turkey

The expansion of housing units due to urban transformation initially lowers prices, but this is followed by a period of shrinking supply, leading to higher prices and rents.

The housing market in Turkey is predicted to have no opportunities until the end of 2025, with prices expected to continue declining.

The potential for a stable housing market will depend on the deflation of the price bubble and the implementation of an economic stability program.