House construction slows, failing to meet needs
Türkiye needs to produce at least 800,000 houses each year to meet people’s accommodation needs, but the number of construction permits granted for dwelling units remained at 262,000 in the first half of 2022.
In the face of the growing need for new houses, the government recently announced that it would launch two major projects soon.
The government will start what officials describe as the largest-ever social housing project in the country to build tens of thousands of houses in all 81 provinces.
President Recep Tayyip Erdoğan will unveil the details of the social housing project on Sep. 13, Environment, Urbanization and Climate Change Minister Murat Kurum said on Aug. 21.
Another large housing project will be launched, led by the Emlak Konut Real Estate Investment Company.
The government also announced last week that idle offices will be turned into dwelling units to address the growing problems in the housing market. The move means creating additional 50,000 houses.
Officials say those projects will help bring property prices and rents down.
Since 2019, house supplies have been insufficient. In 2016, construction permits were granted for 1 million dwelling units and this increased to 1.4 million units the next year. The number of construction permits declined gradually in the following years, dropping to 320,000 in 2019, even though picking up to 555,000 in 2020. Last year, permits were issued for 721,000 dwelling units.
Fewer permits granted
It takes around two years to finish the construction of a building, thus the dwelling units for which construction permits were granted in 2019 are not on the market yet.
The number of construction permits granted by municipalities for building and dwelling units declined by 7.5 percent and 15.3 percent on an annual basis in the second quarter of 2022, the Turkish Statistical Institute (TÜİK) reported on Aug. 19.
In the first half of this year, a total of 262,000 construction permits were granted for dwelling units. Data also showed a growing interest in detached houses amid the COVID-19 pandemic. Authorities issued construction permits for 12,000 such houses, with a total of 2.6 million square meters in the second quarter of 2022.
According to the use of the building for which construction permits were granted, two and more dwelling residential buildings had the highest floor area share with 18.3 million square meters, followed by industrial buildings and warehouses at 2.9 million square meters.
Meanwhile, as house prices have increased, people are increasingly turning to buy land plots as an alternative investment, which boosted their costs.
The price of land plots, which are suitable for housing construction, rocketed by 83 percent on average across Türkiye, with increases exceeding 100 percent in some provinces, including Istanbul, İzmir, Antalya, Muğla and the Black Sea province of Rize.