The home ownership rate is declining in Turkey: the largest decline is in the middle income group

Research from the Bahçeşehir University Center for Economic and Social Research (BETAM) revealed that home ownership in Turkey has significantly decreased over the years.

Consequently, the home ownership rate, which was 59% in 2010, dropped to 55.5% in 2021.

When home ownership rates for different income groups are analysed, this rate ranges from 51.3 to 46 (5.3 points) in the lowest income group and from 58.5 to 52.8 (5,3 points). 7 points) in the middle income group. it was seen that it decreased from 70.4 percent to 66.1 (4.3 points).

Source: BETAM

IT BEGAN TO FALL FROM 2014

According to the information in the BETAM research note, there was a 28.6 percent increase in the real unit price of housing in the period 2010-2014, when the home ownership rate did not decrease.

In the note, which states that despite this increase, there was no decrease in home ownership, it is stated that “This is due to the fact that there was a strong increase in the real disposable income of households thanks to to high growth in the same period”. , and continued as follows:

“In fact, the ratio of the current median home price level to median disposable household income has increased a total of 16 percent in four years, and the median annual increase has been 4 percent.”

According to the research, home ownership has been on the decline since 2014.

Source: BETAM

THE INCOME OF CITIZENS DID NOT INCREASE LIKE THE PRICE OF HOUSING

While economic growth has averaged just over 6 percent over the past two years (1.8 percent in 2020, 11 percent in 2021), research shows homeownership continues to decline as the increase in the income of citizens is well below the increases in house prices It was stressed that it was not surprising.

In the study, which discussed home ownership by income group in detail, it was noted that there was a significant decline in home ownership at the end of 10 years in the lowest income group.

In the note, it was indicated that the home ownership rate, which was 51.3 percent in 2010, decreased to 46 percent in 2021:

“However, this drop is the end result of very strong volatility. What is striking in this income group is the significant increase in home ownership through 2015: the homeownership rate has risen from 51.3 percent to 54.1 percent (about 3 percentage points).

HOME OWNERSHIP RATE IN TURKEY IS HIGHER THAN IN GERMANY AND SWITZERLAND

On the other hand, home ownership rates in Turkey were compared with Hungary, Poland, Romania, Mexico, Chile, Germany and Switzerland.

As a result, it turned out that the home ownership rate in Turkey is considerably higher than in Germany and Switzerland, which have much higher incomes: 56 percent in Turkey, 44 percent in Germany, and 38 percent in Switzerland.

“This comparison clearly shows that there is not always a valid economic law, since the higher the per capita income, the higher the home ownership,” the study says.

LARGEST HOME OWNERSHIP IN ROMANIA, HUNGARY AND POLAND

The countries with the highest number of home ownership were Romania, Hungary and Poland, respectively.

As of 2020, home ownership was 97, 88, and 79 percent in these countries, respectively.

It was stated that although the per capita income in these countries is similar to Turkey’s, home ownership rates are much higher than Turkey’s.

The common feature of these three countries is that they are former socialist countries.

In this investigation it was stated:

“The sale of public housing to residents at cheap prices after the socialist regime in Romania explains the very high level of home ownership in this country, at 97.3 percent, in 2010.

High home ownership in Hungary and Poland can be predicted to be the result of a similar development.”