Phenomenal growth in transactions for buying a home in Turkey for cash

According to the president of the Istanbul Chamber of Realtors Nizameddin Asha, the number of transactions for the purchase of housing for cash has recently increased significantly.

This is due to the increase in interest rates on consumer loans for the purchase of housing, so people were forced to look for more profitable ways and use their savings. At the end of the first quarter of 2021, the largest number of transactions “without loans and mortgages” was recorded on record.

At the same time, data from the Central Bank of Turkey (Türkiye Cumhuriyet Merkez Bankası, or TCMB) say that in June 2020, when the low-interest mortgage lending campaign was launched, another record was recorded: 130,721 home sales transactions in mortgages. This was the highest figure for the entire observation period. At that time, the minimum lending rate was only 0.75%.

However, since that time, lending rates began to rise, and, as a result, home sales in mortgage, relative to the total number of transactions, began to gradually decline. And by April 2021, it decreased to a minimum, taking into account inflation and concerns of Turkish citizens about the economic crisis and job instability caused by the consequences of the pandemic.

Thus, since April 9, the rate has increased by 1.52%, totaling 18.22% per annum.

As a result, "non-credit" sales increased in March 2021 by 36.9% percent compared to the same period last year and reached 89,426 units, or 80.4% of the total. That is, at the moment 8 out of 10 housing units are sold without attracting a mortgage.