Delivering a speech yesterday at a press conference called to present the association's recently released report on the sector as of the third quarter of the year, Tanes said the real estate sector is one of the sectors that was hit most severely by the global financial crisis. Citing the impact of the crisis on the construction sector as an example, he explained that the construction sector, as a sub-sector of real estate, contracted by 19.5 percent, a figure approximately two-and-a-half times the contraction of the overall economy, which is 8.4 percent. The number of building permits secured from municipalities also decreased from an annual average of 580,000 in the years between 2005 and 2007 to a predicted 420,000 for the end of 2009, Tanes said, adding that they consider 2009 a “lost year.”
However, he noted, the sector saw a 24 percent rise in housing sales figure in the January-September period of 2009 over the same period of 2008. These sales totaled some 416,000 units thanks to several incentives introduced this year -- a cut in title deed fees and the value-added tax (KDV) -- and attractive promotions launched by the firms to deplete current housing stocks. The current stocks will also prevent a sharp rise in housing prices to occur until the second half of the coming year, he said.
Tanes also stressed the fall in mortgage interest rates to less than 1 percent, the same level as seen in 2006, by the second quarter of the year. The number and amount of mortgages also saw a significant rise in the third quarter of the year, increasing to 96,808 loans for a total amount of about TL 6 billion. These figures were 58,661 loans amounting to TL 3.7 billion in total in the same period of last year.
Tanes noted that even though the annual housing needs are around 650,000 to 700,000 in Turkey, the amount of people who can afford purchasing a house hovers around 100,000, which, he remarked, proves the necessity of taking serious measures, such as reducing KDV, title deed fees or input costs, to ensure demand and supply equilibrium. “The sector's contribution to gross domestic product (GDP) is at levels that cannot be ignored. The sector accounts for more than 10 percent of total employment in Turkey,” Tanes said, stressing the need to support the sector, which can indeed establish the backbone of the economy.
