House sales in Turkey dipped to a five month low in May, hurt by high borrowing costs and the pandemic.
Data from the Turkish Statistical Institute (TurkStat) show that 59,166 residential properties were sold last month, versus 95,863 in April. On an annual basis, the May figures are up 16.2 percent though last year’s numbers were very low due to initial measures taken to contain the spread of Covid-19.
With the average interest rate on a home loans having risen to about 18 percent in the last year, lending costs are weighing on demand from local buyers. Data, showed, however, that house sales to foreigners also plummeted to 1,776 in May, from 4,077 in April.
Iraqi nationals topped the list, purchasing 239 homes followed by buyers from Iran (231), Russia (119) and Afghanistan (98).
More than half of the residential properties bought by foreigners were in Istanbul, followed by Antalya, on the southern coast, and Ankara.
Despite the dip, market watchers expect demand from abroad to pick up over the summer, with falling value of the Turkish lira making homes in the country more attractively priced to foreign buyers.
The Turkish lira has been gaining ground in the last seven seven days but is down about 26 percent on the year.
In the first quarter of the year, housing prices in Turkey soared by 32 percent – the highest jump globally - but once inflation is stripped out, the gains are limited to around 16 percent.