Gov’t plans low cost, long maturity housing loans

Gov’t plans low cost, long maturity housing loans

Gov’t plans low cost, long maturity housing loans

Turkey has completed the infrastructure of financing model that will help low income groups and minimum-wage earners to buy homes at favorable terms, Treasury and Finance Minister Berat Albayrak has said.

The new system will provide housing loans with 20-year maturity and the lowest interest rates ever, Albayrak said at a gathering with businesspeople on Nov. 7 in the Black Sea province of Samsun.

He added that with the government under the new financing model at least 100,000 people will be able to buy a home each year.

The Housing Development Administration of Turkey (TOKİ) will also be part of the scheme, the details of which will be made public by the end of this month at a special event to be attended by President Recep Tayyip Erdoğan, according to the minister.

“We are taking this important step which will help economic activity gain further momentum and different sectors of the economy. This is a step also concerning social justice. Those steps are only a beginning. We hopefully will announce such measures in the period ahead,” Albayrak said.

Housing loans stood at 187 billion Turkish Liras ($32.5 billion) at the end of September this year, according to data from the Banking Regulation and Supervision Agency (BDDK).

In the wake of the Central Bank’s rate cuts, home sales on the local market gained traction.

In September, home sales jumped more than 15 percent on an annual basis to hit 146,903 units.

Mortgaged-financed property sales soared 410 percent to nearly 58,000 units in the month from a year earlier, making up a 39.4 percent share of all house sales in Turkey.

In his speech in Samsun, Albayrak also praised the country’s economic performances.

“We have shown significant improvements in all the macroeconomic indicators since last year,” he said.

“Now we are starting a period of change in which we will lay the foundation of a strong and sustainable growth.”

Leading indicators regarding the third quarter suggest that the recovery in economic activity have gained further momentum, he said, adding that corporate loans grew by 6.4 percent on an annual basis as of Oct. 25.

“Interest rates on corporate loans are lower than what they were in April 2014. The rates were hovering around 25 percent. Now, they are down at 12 percent-13 percent,” he said.