House prices in Turkey in July 2024 increased by 38.7% in nominal terms (in national currency) compared to July 2023. However, adjusted for inflation, a key factor in the country's current economic landscape, they decreased by 14.3%, the Central Bank of the Republic of Turkey (CBRT) reported.
Home sales rebounded in July and reached their highest level this year, despite the increased mortgage rates and high prices that the industry is suffering from. Note that transactions with foreigners are essential decreased in 2024.
From an economic point of view, the nominal price increase reflects the situation without adjusting for inflation. On the contrary, prices in real terms give a clearer idea of whether the value of this asset is actually increasing in terms of purchasing power. In the case of Turkey, while nominal housing prices have risen sharply, the value of properties has actually decreased in real terms.Istanbul, Turkey's largest city, which is a key driver of the real estate market, saw the smallest nominal increase among the main regions: prices rose by 26.8% year-on-year.
Turkey is struggling with persistently high inflation, the impact of which is exacerbated by disruptions in global supply chains and fluctuations in energy prices.Since the second half of last year, the authorities have taken aggressive measures aimed at curbing inflation. Since June 2023, the Central Bank has begun to raise the base interest rate and brought it to the current 50%. Last month, inflation, according to official data, fell to 61.8% year-on-year.
Source: Daily Sabah
