Gold prices emerge as new barrier to home purchases in Türkiye

ISTANBUL

The number of homes sold across Türkiye in July fell 17 percent year-on-year to 123,603, according to official data.

After a decline in May and a slight recovery in June, housing sales dropped significantly again last month.

Despite strong housing demand and robust buyer appetite, buying a home has become increasingly difficult, daily Milliyet reported.

Many households that invested their savings in gold have been affected by the precious metal’s weak performance over the past five months.

Those who do not sell their gold holdings and convert them into down-payment funds have postponed their home purchase decisions.

Households unable to generate financing for a home by selling their gold are facing a similar problem in interest-free financing companies operating under what is commonly known as the “Evim [My Home] system.” In this model, buyers who can provide a large down payment gain a significant advantage. They are able to acquire homes or vehicles more quickly while benefiting from lower subsequent payments. However, those unable to sell gold to raise a down payment have also postponed joining these financing schemes in recent months.

According to Central Bank data, housing prices have failed to outpace inflation in 28 of the past 29 months, resulting in a real decline compared with the previous year. While this trend has created purchasing opportunities for prospective buyers, shrinking down-payment capacity has emerged as a major obstacle.

Meanwhile, mortgage rates offered by banks have risen rapidly since the second quarter of the year. The lowest available mortgage rate increased from 2.49% to 2.87%. In addition, special campaigns launched by banks that helped reduce borrowing costs have largely come to an end.