Brake interest rates on housing loans

The Turkish real estate sector report, published by the Association of Real Estate Investors (GYODER) for the second quarter of 2023, revealed that the share of home loans among retail loans fell sharply.

Consequently, as of June 2023, the monthly interest rate on housing loans increased to 1.84 percent and the compound annual interest rate reached 24.45 percent, reaching the highest value since January 2019.

After this interest rate increase, the share of home loans in personal loans decreased 30.4 percent in June 2023 compared to the same month a year earlier and decreased to 20.1 percent.

The share of housing loans in total consumer loans, which was 38 percent in June 2022, decreased 6.4 points to 31.6 percent in June 2023.

According to TUIK data, in June 2023, compared to the same period of the previous year, mortgage sales decreased to 13,463 units with a record decrease of 66.85 percent.

Source: GYODER (Ratios taken from data from the Central Bank)

THE ANNUAL INTEREST RATE WAS 20.08 PERCENT, EXCEEDING 34 PERCENT

The report also includes the evolution of housing loan rates since the beginning of the year and the decrease in the volume of housing loans in the same period.

The monthly interest rate, which was 1.54 percent at the beginning of 2023, was around 1.33 percent at the end of the first quarter of the year and rose to 1.81 percent at the end of the second quarter.

Likewise, the annual interest rate, which started at 20.08 percent at the beginning of 2023, ended June 2023 with 23.98 percent. In July, the annual interest rate rose to 34.09 percent.

In the report indicating that the volume of housing loans was obtained at the level of 438.5 billion TL by the end of June 2023, it was indicated that the share of public depository banks in the total volume of housing loans it decreased from 65.66 percent in June 2022 to 62.86 percent. in June 2023.

Ratios compiled from BRSA data

MONTHLY FEES 57 PERCENT OF AVAILABLE INCOME

The report, which compiled data from various institutions, drew attention to the relationship between monthly loan installments and household disposable income.

Consequently, the average amount of loans granted for housing in the first quarter of 2023 throughout the country was 770 thousand TL.

In the report, where it is stated that house prices in Istanbul are 5.18 times the median disposable income of households, the expressions “The monthly installments of the house loan to be used for a house of 100 square meters in Istanbul in the second quarter of 2023 they are 57 percent of household disposable income.”

Figures compiled from Index data

SALES DECREASE BY 30.5 PERCENT IN THE SECOND QUARTER

The report also includes the effects of all these events on sales.

In the second quarter of 2023, home sales decreased by 30.5 percent compared to the same quarter of the previous year and fell to 282,564 units.

The decline in first-hand home sales in the first quarter of this year stood out as the lowest data for the second quarter since 2013.

At the end of the second quarter of 2023, home sales to foreigners decreased by 46 percent in the first semester compared to the same period of the previous year, to 19,275 units.