Real Estate Makes a Recovery

The pandemic has had a far greater impact than previously thought however the new ‘normal’ has laid the way for the recovery process.

Real Estate Makes a Recovery

Recent data has revealed that the real estate sector has started to make a slow recovery in 2021 but that it has not reached the dizzy heights experienced in previous years-so far.  

The pandemic has had a far greater impact than previously thought however the new ‘normal’ has laid the way for the recovery process. Everyone remains cautiously optimistic as the housing sector still provides a higher return in interest than the interest yield. The upward trend in global housing prices continues. Turkey remains the country amongst its Euro friends that has seen the housing prices increase the most with a 32% increase from last year. 

Why has this happened? 

People’s expectations of what ‘home’ actually means to them changed dramatically, especially during the pandemic period. Demand for detached properties, rural idylls and low-rise residential areas increased and urban transformation projects kept the rental market dynamic. It is thought that there will be a decrease in the rate of price increases which in turn will affect the increase in housing supply. As winter progresses it is likely that there will also be a decrease in the rate of rent increase as urban transformation applications slow down. 

Might normality see the end of summer houses? 

Summer houses were seen as a dead investment for many years However, during the pandemic restrictions this situation rapidly changed. People saw a summer house as a way of escaping city life and it eased their feeling of restriction, and enabled them to work from home. As a result, prices rocketed to an all-time high but as restrictions on life have eased it is predicted that this trend will slow down.  

Highlights of the report written:

  • Construction permits are at the highest level in the last four years 

  • Annual rate of increase in the housing price index (adjusted for inflation) is 9.9% 

  • In the first seven months of 2021, loans for house sales decreased by 69% compared to the same period in 2020 

  • Depreciation in the Turkish lira led to an increase in real estate sold to foreigners, last year in the seven-month period measured it was 2%, this year it has increased to 3.8% 

  • Seasonally adjusted construction confidence index increased in July by 86.3 This is a positive trend even though the threshold index is at 100 

  • The square metres being offered to shopping malls is at 13.6 million; this market has increased to 447 Malls. Istanbul remains the centre of the shopping mall market  

  • Eurostat data reveals Turkey to be the country where housing prices increased the most. Between the years 2020 to 2021 rents increased by 9.4% this occurred mainly in the big cities. Austria followed closely behind with a 5% increase and then Latvia with an increase of 4%