Luxury housing construction increasing, low-income housing decreasing in Istanbul
Gülistan Alagöz - ISTANBUL
A view of Istanbul with the Bosporus Bridge in Turkey, Sunday, June 7, 2015. AP PhotoThere has been a dramatic rise in luxury housing production and stock in Istanbul, but the opposite is the case for lower-income housing due to skyrocketing land prices in the city, according to a new sector report.
A majority of construction companies focus on building houses that go on sale for over 5,000 Turkish Liras ($1,830) per square meter, but construction activities have slowed for more economical houses on sale for less than 2,000 liras ($730) per square meter, according to research by EYG Gayrimenkul.
It will be almost impossible for construction companies to build houses for lower-income groups as long as the land prices in Istanbul remain so high, according to sector representatives.
Companies currently pay at least 50 percent of their income for each house they build to land-owners in the city so they focus on building more expensive houses in order to maximize profits, according to the report. This makes it more difficult for low-income residents to buy a new house in the city.
Over 212,000 new homes built within the last 12 months or set to be built over the next 12 months were examined in the research. More than 76,000 of these homes were put on sale for over 5,000 liras per square meter, while only 3,000 went on the market for less than 2,000 liras per square meter.
The research has also showed that Istanbul currently has an overstock in high-end houses, sold for more than 9,500 liras ($3,467) per square meter.