No balloon risk in Turkey’s real estate sector, say sector representatives

No balloon risk in Turkey’s real estate sector, say sector representatives

ISTANBUL - Reuters
Turkey’s real estate sector will grow at around 6 percent by yearend and continue growing at around the same rate in 2014, as long as political stability is maintained in the election-intensive coming years, according to leading sector representatives.

The housing stock, at around 5 to 5.5 percent of the country’s GDP, does not pose a balloon risk in the near term, they added, speaking at a summit yesterday organized by the Association of the Real Estate Investors (GYODER).

“The sector appears to be closing the year at around 6 percent growth. There is no slowing down in new licenses. The sector will most probably grow at around the same rate in the next year unless some big surprises happen, specifically a weakening of the political stability of the country,” said head of GYODER, Aziz Torun.

Torun noted that the biggest obstacles preventing the sector from growing more were the new value-added regulations on housing, as well as the expected increases in housing taxes in the near future.

The sector is expected to sell around 1 million houses by the year’s end.

“The housing sector is growing with the help of the urban development reform and the reciprocity law, allowing foreigners to buy real estate in Turkey. In order to keep growing, it is of great importance
for us not to observe any uncertainties, specifically any ruining of political stability. Our sector will be affected negatively from any incidence like the Gezi protests,” said Yeşil Housing Development General Manager Işık Gökkaya.