Turkish home sales shrink by 38 percent as mortgage lending slumps

Turkish sales of new and existing homes slid by an annual 38 percent in January, reversing an 11 percent increase in December, Turkish Statistical Institute figures showed.

Sales fell to 70,587 units from 113,615 units in January 2020, the institute said on Monday.

Turks are purchasing fewer homes after the central bank more than doubled its benchmark interest rate to 17 percent since September and the country was struck by a second wave of the COVID-19 pandemic. The rate hikes, designed to defend the lira and rein in inflation, have reversed a boom in sales of apartments and houses as borrowing costs surged.

Purchases of homes via mortgages slumped by an annual 75 percent in January to 10,732 units, the institute said.

The average cost of a housing loan has jumped to 18.1 percent this month from 9.1 percent in July, according to central bank data.