Prices in the real estate sector are beginning to drop as a result of high interest rates and prices, election uncertainty, and mortgages that are not accessible to the middle class.
The Referans Real Estate Index showed that in May real estate prices in four big cities, not including Bursa, declined by 1.3 to 6.3 percent.
Nejat Kuduğ of Century 21 Seta office says that due to high interest rates, the demand for real estate has decreased and those who want to buy a home thoroughly research prices.
Nabi Cücük, the general manager of Reha Medin Real Estate Services, says that homes built by TOKİ, or Toplu Konut İdaresi (Housing Development Administration of Turkey), at an affordable price also affect high-priced projects in the region.
He also says that there is sufficient supply of homes targeting middle-upper income groups but because of low demand, prices are dropping. Prices in İzmir have dropped the most.
In İzmir, prices dropped by 6.3 percent and the price per square meter dropped to YTL 377, according to the Index.
In Istanbul, the price per square meter dropped by 1.3 percent from YTL 2,089 to YTL 2,061 on average in April. In Ankara, prices dropped by 3.5 percent where square meter prices went down from YTL 1,211 to YTL 1,169. In Antalya the prices dropped by 2.1 percent where price per square meter dropped from YTL1,081 to YTL1,058.
Rauf Saatçi, general manager of Century 21 Turkey says that the stagnation prevailing for seven months continues even after the announced election day. According to him, there will be some activity after the elections but one should not expect too much.
Nabi Cücük said that high interest rates and high-priced supply makes the consumer reactive. He added that mortgages have not responded to the needs of the middle class and that it's best to wait.
Can Demiröz, responsible for the Colliers International Consultants Department, says that people have enough purchasing power for luxury homes. He believes that dropping real estate prices is not a good solution, as prices may drop to the point of what it cost the developers to build properties in the first place.
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