What will be the payment plans in the housing campaign for the middle class?

While the ‘My New Home Campaign’, which was announced for middle-income people to own a home, received a positive response from the industry in general, it also raised some questions.

Although interest rates on loans have been announced to start at 0.69 percent on the project in question, it is not yet clear by how much the maximum interest rate will increase.

Apart from this, the monthly installments will not exceed 40 percent of the household income; It has been announced that it will drop to 25-30 percent on many installments, but it will become clear in the future for whom exactly which rate will apply.

Another concern was the project’s upward impact on housing prices.

There are also experts who say that providing financial support to project contractors will support the supply side and ease housing prices; who predicts that the project will indirectly increase prices by eliminating the margin of negotiation…

PROJECT DETAILS

According to details announced today about the campaign in question:

* My New Evim Project, which will start on January 16, will be valid for new residences, and the homeless will be able to benefit from the campaign.

* The minimum initial payment rate will be 10 percent and the maximum maturity will be 15 years.

* Loan interest/profit sharing will start at 0.69 percent.

* Dues will not exceed 40 percent of household income. In many installments, it will decrease to the level of 25-30%.

* The Ministry of Treasury and Finance will be responsible for part of the monthly installments during the first 3 years, provided they are amortized. The installment amounts will be reduced during the first 3 years.

* Those who live in Istanbul with a maximum income of 80 thousand TL will be able to benefit from the project. A maximum income of 65,000 TL for those living in Ankara, İzmir, Bursa, Antalya, Mersin and Muğla, and a maximum of 45,000 TL for other cities.

FEES FROM 4 THOUSAND TL AND OVER 12 THOUSAND TL

Treasury and Finance Minister Nureddin Nebati explained the exemplary payment plan in the ‘New Home Campaign’, which offers middle-income people the opportunity to own a house with 0.69 percent interest and a maturity of 15 years old:

“Today, a citizen can own a house with a monthly payment of TL 13,587 when using a loan of TL 1 million with 1.2 percent.

In the new system, our citizens will pay a monthly fee of 4,410 TL in the first year, with 0.69 percent in the first 3 years. In other words, you will make an annual payment of TL 52,922. Assuming the monthly household income is TL 15,000, the household with this amount of income will own a house with a 30 percent down payment.

In the second year, households pay 5,400 TL in installments. The fees for the third year are 6 thousand 480 TL. In the first 3 years, we take all the load, the citizen enters the system as if he were paying rent here.

Stating that the fourth installment increased to TL 10,315 per year, Nebati said, “With each passing year, TL 10,315 remains constant, and the total payment amount increased to TL 1,909,570 by increasing it. to 12 thousand 697 TL in the last 8 years”. .

WHAT WILL BE THE MONTHLY FEE OF THE CREDIT CHECK OF 5 MILLION TL?

However, the account that Nabati made was for the citizen who took a loan of 1 million TL.

One of the question marks is whether an interest of 0.69 will be applied to the citizen who requests a loan of TL 5 million.

Real estate appraisal expert Ahmet Büyükduman, who gave information to Sozcu.com.tr, stated that in case of 0.69 interest, the citizen who obtains a loan of 2 million TL will have a monthly installment of approximately 20 thousand TL, and the one who takes a loan of 5 million TL will have a monthly installment of approximately 50 thousand TL.

Consequently, if the same interest rate, ie 0.69 percent, is applied to all loan amounts, a citizen who borrows TL 2 million will pay TL 19,438 in monthly installments; Users of TL 3 million loans will pay TL 29,157 monthly, while those using TL 5 million loans will pay TL 48,594 in installments.

During the first 3 years, a significant part of these amounts will be assumed by the Public Treasury. Citizens will not pay more than 40 percent of their income in the first 3 years. After 3 years, the Treasury will return the support with interest. It is expected that this amount to be paid will be added to the amounts of the monthly installments.

‘IT IS NOT A SOLUTION TO THE HOUSING PROBLEM’

Eva Real Estate Evaluation General Manager Cansel Turgut Yazıcı evaluated the campaign on sozcu.com.tr and said that he did not believe that the project would bring much movement to the market and that it would not be a solution to the housing problem.

Saying: “A good opportunity is offered to those who do not have a house and have a chance to buy a house,” Yazıcı said, “There will not be a sales frenzy like in 2020. I believe it will revitalize and motivate urban transformation. This campaign seems designed to pave the way for production, but I don’t think it’s a short-term solution to the housing problem.

Yazıcı also made the following suggestion: “I think legislation should be created to open unused attics for immediate use. This would be the shortest and least expensive solution.”

POSITIVELY WELCOME TREASURY SUPPORT

Real estate appraiser Ahmet Büyükduman stated that he found the Treasury’s support positive, saying: “Lessons have been learned from the negative aspects of previous campaigns and an arrangement has been made to increase supply rather than increase demand. In general, I found it positive, it will also revive the economy before the elections, ”he said.

Talking to Sozcu.com.tr Nizamettin Aşa, president of the Istanbul Chamber of Realtors, made a similar assessment, saying: “We have an arrangement that has not been repeated in previous campaigns, and the lesson of which has been studied this time. Affordable interest loans made at the start of the pandemic had doubled in prices as it sparked an explosion in demand. This time, we see a project that stops demand and will strengthen supply by offering financing to contractors. Treasury support is also very important,” he said.

HOW WILL IT AFFECT PRICES?

So how does the project in question affect home prices?

Nizamettin Aşa said that providing financial support to contractors with the new campaign will strengthen supply and prices will loosen as demand declines.

Ahmet Büyükduman, on the other hand, believes that the campaign will increase prices indirectly…

“It was said that prices would be controlled, but the price is different, the advertised price is different,” Büyükduman said, adding: “Some strategies can be used to increase the price offer of citizens. Therefore, the advertised prices do not change, but the bargaining margin may disappear. “This means a price increase,” he said.