GYODER: Turkish real estate market not oversupplied

September 01, 2011, Thursday/ 16:29:00

In a country where the yearly housing need is around 600,000-650,000 units, we cannot talk about a pricing balloon or say that the sector is oversupplied, Real Estate Investing Partners Association (GYODER) President Işık Gökkaya told the Anatolia news agency on Thursday.

“According to our [GYODER] research, there will be a huge housing need in Turkey by 2015 as a result of the rising population, renewing old buildings, constructing earthquake-resistant buildings and urban renewal. In a country where the yearly housing need is around 600,000-650,000 units, we cannot talk about an oversupplied [real estate] sector and say the prices are too high since the average price of a house in Turkey increased by 6.2 percent in the first quarter of this year when compared to the same period in 2010 despite the fact that the costs of building a house rose by 8.4 percent,” Gökkaya noted, adding that he expects there will be a housing gap in provinces such as Ankara, Bursa, Bitlis, Hakkari, Kars, Aksaray, Gaziantep, Adana, Ardahan and Kırıkkale.

The GYODER president noted that the rising interest rates on mortgage loans as an outcome of a central bank measure to increase reserve requirements has led to a slowdown in consumer interest towards the real estate market but added that this slowdown was compensated for with the rising demand of commercial property. “We expect the strong economic growth and domestic demand to also continue this year and that the real estate market will wake up again,” he stated.

Separately, Ankara All Real Estate Agents Trade Chamber (ATEM) Vice President Ahmet Rıfat Yetkin told Anatolia on the same day that economic stability is the major reason behind good sales figures in the Turkish real estate market. “Consumers will try to buy a certain property when they have the financial income. However, the basic requirements they look for is economic stability. If there is no [economic] stability, they won't put money into the real estate sector even if they have the financial means,” he added.