Citizens can’t buy, contractors can’t: Final blow to housing supply

The level of construction costs and the difficulties in obtaining the land have increased the cost of building the new house.

While the main factor driving home prices and rent down is the increased housing supply, the supply has been 200,000 below need for the past three years. In other words, depending on the population and immigration in the country, between 800,000 and 900,000 houses should be built every year, but this level cannot exceed the band of 600,000.

The difficulties experienced by the municipalities in the production of residential land and the construction costs that have increased between 70 and 200 percent in the last year have further deepened the existing supply problem.

According to calculations by real estate contractors and appraisers, the average cost of a 150-square-meter home, attractive to the middle class across the country, starts from at least 4 million Turkish liras, including the cost of the land.

2 MILLION TL WITHOUT PLACING BRICK

Cansel Turgut Yazıcı, CEO of Eva Real Estate Appraisal, He noted that the cost of housing construction starts at 3 million lira, although it is relative, but if the construction lasts 18 months, this figure can reach 4 million with the addition of the financial cost.

Tahir Tellioğlu, President of the Confederation of Construction Contractors (IMKON), “The land cost of a 150 square meter residence in Turkey has exceeded TL 2 million. In other words, just the cost of the land is 2 million lira without putting a brick on it. The construction cost reaches between 2 and 3 million Turkish lira, depending on its size and nature. This means that the construction costs of houses that appeal to the middle-buyer segment across the country will be TL 4-5 million without profit sharing,” and continued as follows:

“Housing is no longer affordable for low- and middle-income citizens. The contractor, by contrast, is wary of production. There was also a period five years ago when 1.3 million houses were built a year. In other words, we have the power to produce, we have the material, we have the will. The problem is the lack of land and the high costs.

The regulations that are made are not made by listening to the representatives of the sector and making real diagnoses. We want relevant ministries and industry to come together and work together to develop solutions to increase housing supply.”

LAND COSTS ARE EFFECTIVE

Ramadan Kumova, President of the Association of Investors and Housing Developers (KONUTDER), He says the underlying reason for talking about these levels in home construction costs is the cost of land.

Emphasizing that on a global scale the cost of land should not exceed 20 percent of the cost, but that this rate is 70 percent for Istanbul, Kumova suggested that the state, as the largest land owner, should pave the way for accessible social services. housing production in cooperation with the private sector.

THE SALES PRICES OF THE SQUARE METERS HAVE FLOWN

On the other hand, according to data from the Bahçeşehir University Center for Economic and Social Research (BETAM), the average prices per square meter of residences for sale across Turkey increased by 82.7 percent annually in July 2023, reaching 22 thousand 866 TL. .

Although this price is 16,852 TL in Ankara, it reaches 26,71 TL in Izmir and 32,000 TL in Istanbul.

The level of home sales prices in Anatolia is not comparable to that of metropolitan cities.

Speaking to sozcu.com.tr in June, the president of the Van Association of Realtors, Orhan Özdek, said that the city leads the increase in house prices for sale, with a house starting from 2 million Turkish lira.