Article: Low-interest bank loans boost Turkey’s home sales_Xinhua
The photo taken on July 21, 2020 shows a general view of apartment buildings in Istanbul, Turkey. (Photo by Osman Orsal / Xinhua)
ISTANBUL, July 22 (Xinhua) – Muttalip Iscan, a real estate agent, hung a banner “for sale” on the window of an apartment in an upscale district of Istanbul on Tuesday while waiting for his next date.
“The business has experienced a triple or even quadruple increase since early June with sales soaring thanks to the reduction in the interest rate on home loans by state banks,” Iscan told Xinhua.
Located in the heart of the Nisantasi district on the European side of Turkey’s largest city, the 250-square-meter apartment was listed for sale for 7 million Turkish liras ($ 1.02 million) a month ago.
“I was very worried when I first hung the banner, fearing that the price would be high enough in the difficult economic conditions of the COVID-19 pandemic,” he said.
But soon after, he began to receive numerous calls from his potential clients intending to purchase the apartment. A family of four told Iscan they wanted to buy the apartment and requested the deeds to complete the final legal inspections.
“The loans cover 90 percent of the total price of the property with a very low interest rate, which means paying just 10 percent of the total amount would be enough to own a home,” Iscan noted.
Home sales across Turkey tripled year-over-year in June to 190,012, from 61,355 in the same month a year earlier, according to the latest figures released by the Turkish Statistical Institute .
Istanbul, with a population of over 16 million, ranked number one with the sale of 28,799 properties in June, the data revealed.
Meanwhile, the Cumhuriyet daily reported that despite recent high home sales, the decline in the country’s construction sector has continued for three years.
In an article published on Monday, the daily said more than 360,000 workers remained unemployed over the past year and the sector contracted financially by 14.3% year-on-year in September 2019.
For Metin Turkyilmaz, freelance business writer for the Dunya daily, the industry’s biggest issue is rising costs. According to him, without a significant reduction in spending, sustainable growth would not be possible.
Turkyilmaz told Xinhua that the latest record sales could be a sign of recovery, but it would be too early to comment without seeing their effects on generating new investment.
Speaking of the low loans offered by state banks, Turkyilmaz said they are unsustainable and that many may soon start to struggle to pay their debts, which could put the state’s treasury under pressure in the future. the near future.
In Iscan’s view, recent efforts by state-owned banks have been a good indication for the future of the sector, as sales would increase the flow of capital.
“For builders to invest in new projects, they must first sell the homes in the stock and make money,” he said. Final element