Erdoğan pledges support for homebuyers, builders after prices surge

Turkish President Recep Tayyip Erdoğan said his government would provide more support for builders and low-income homebuyers after the price of housing surged, putting home ownership out of reach for many people.

The government will ensure mortgages are provided at an inflation-busting interest rate of 0.99 percent per month for purchases of new homes valued at as much as 2 million liras ($131,000), Erdoğan said in televised comments after a cabinet meeting on Monday.

Erdoğan said his government would provide financing of 20 billion liras to help finish housing construction projects that are at least 40 percent complete. It will also provide 30 billion liras to state-run homebuilder TOKI to help low-income people become home-owners, he said.

The price of housing surged by 96.4 percent annually in February, according to central bank data. The cost of homes has jumped after the price of raw materials increased sharply due to a slump in the value of the lira, which slid by 44 percent against the dollar last year.

Erdoğan, who must call elections for June 2023 at the latest, also said his government would provide further help to low-income families through social security funding and projects to help make up for higher living costs.

Consumer price inflation in Turkey accelerated to 69.97 percent in April, the highest level in two decades, according to official data published last week. Some unofficial estimates for living costs put the annual increase at more than 100 percent.

The government is facing calls from opposition parties and many non-government groups to increase the net minimum wage of 4,253.4 liras ($280) per month. The government had approved a hike in the wage of 50 percent in December.

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