Turkiye house sales fall by 18% after deadly earthquakes

Residential property sales in Turkiye fell 18% last month from the same time a year ago, official data showed Wednesday, reflecting on the impact of catastrophic earthquakes that ripped through the country’s southeast last month.

Some 80,031 houses exchanged hands in February, the Turkish Statistical Institute (TurkStat) said, marking the lowest level since May 2021.

Magnitude 7.7 and 7.6 quakes on February 6 killed more than 48,000 people in Turkiye’s southeastern region. In addition, over 230,000 buildings have been destroyed or severely damaged, leaving hundreds of thousands homeless, making it the worst disaster in Turkiye’s modern history.

Fears of future tremors, particularly in Istanbul, Turkiye’s biggest city with a population of around 16 million and the country’s commercial engine, have made people rethink their plans for property purchases.

The data showed that house sales were down 18.1% from 97,708 units that exchanged hands in January.

Istanbul had the lion’s share with 18.7% or 14,980 houses sold in February, the TurkStat said, followed by the capital Ankara with 8,235 and the Aegean province Izmir with 5,031 units.

Last month’s disaster forced millions to leave 11 southeastern provinces home to 14 million people.

President Recep Tayyip Erdoğan instructed an immediate reconstruction campaign and has said the devastated regions would be rebuilt within a year.

The fall in the housing market comes amid declining supply and soaring prices. Households have seen real estate as an attractive investment tool to shield themselves from stubborn inflation that soared to a 24-year high in October before moderating after that.

The annual consumer price index (CPI) fell to 55.18% in February, marking a notable regress from the peak of 85.5% registered last October.

The government last year announced several measures to boost home sales and address the prices that more than doubled as residents struggled to find affordable homes to rent or buy.

To help cushion the fallout from inflation, it unveiled a cap on rent increases and launched a major housing project for low-income families.

The TurkStat data showed February mortgaged sales declined 12.7% from a year earlier to 17,357 houses, accounting for 21.7% of the total sales.

The statistical institute said that January-February sales fell 4.4% year-over-year to 177,739. The mortgaged sales were down 11.8% to 33,560 units.

According to the data, home sales in 2022 dropped slightly by 0.4% year-over-year to nearly 1.49 million houses.

Meanwhile, sales to foreigners fell 27% to 3,350 and accounted for 4.2% of all sales in February.

Russians topped the list of foreigners with 1,183 houses purchased, reflecting how many have sought a financial haven after Moscow invaded Ukraine and the fallout of Western sanctions.

Iranians followed Russians with 446, Iraqis with 173, and Ukrainians with 142 houses purchased last month.

Russians bought a record 16,312 houses in Türkiye in 2022, tripling the home purchases that made them the top foreign buyers in the real estate market.

Purchases by Russians accounted for almost a quarter of all sales to foreigners, which rose 15.2% year-over-year to a record 67,490 units.

Ukrainian nationals who flew to join their relatives in the southern province of Antalya also boosted their purchases by 106.6% year-over-year to 2,574 units.