Government mulls housing project for mid-income groups

Government mulls housing project for mid-income groups

Government mulls housing project for mid-income groups

As part of its efforts to address the growing problems regarding property prices and rents, the government considers launching a new project to build houses for middle and upper-middle income groups.

Emlak Konut Real Estate Investment Company will coordinate the project, but private developers will also take part in the scheme.

In the past, such projects targeting those income groups were implemented, houses offered at affordable interest rates, prices and payment plans, which drew strong interest and demand.

The government recently announced that it will start, what officials describe as the largest-ever social housing project in Türkiye, for low-income groups.

President Recep Tayyip Erdoğan will unveil the details of the social housing project on Sept. 13.

However, Environment, Urbanization and Climate Change Minister Murat Kurum provided some details.

There will be an income cap on eligibility for applying for buying a house from the social housing project, Kurum said.

Households with an income below 16,000 Turkish Liras ($880) in Istanbul and 14,000 liras in other provinces and those who are not currently homeowners will be allowed to apply, according to the minister.

The payments, which could be made in instalments of up to 240 months, will be kept at a level that minimum wage earners can afford, said Kurum.

The Housing Development Administration (TOKİ) will be in charge of this major project, which will cover 81 provinces of the country.

Some of the houses to be built under the project will be allocated to pensioners, young people, veterans and the disabled.

How many houses will be developed in each province will depend upon demand. Kurum previously said that his ministry sent a communique to the governors to determine how many houses are needed in their provinces.

In a bid to boost property supplies, the government will also offer public lands to low-income groups on which they will be allowed to build houses.

Other plans include developing industrial sites for small and medium-sized companies, which are expected to increase production and employment.

Skyrocketing rents and property prices have become a pressing issue for many people, which prompted the government earlier this year to introduce a new regulation, which limited rent hikes to 25 percent.

The residential property price index leaped nearly 161 percent in June from a year ago, according to the latest data from the Central Bank. The monthly increase was 9 percent and the annual rise, in real terms, was 47 percent, said the bank.

In Istanbul, the country’s most populous city and its financial center, property prices increased by 185 percent year-on-year, while in Ankara the rise was 165 percent. In İzmir, the third largest city, prices rocketed 151 percent on an annual basis.

House sales last month plunged 12.9 percent from a year ago, which some experts say is due to the high prices. Only around 94,000 houses were sold in Türkiye in July.