Turkish home sales climb on cheap mortgages, Russian purchases

Sales of new and existing homes in Turkey rose by 38.8 percent in April from a year ago after the government encouraged people to take out mortgages with deeply negative interest rates and Russians topped the list of foreigners buying property.

House sales climbed to 133,058 units as mortgage lending jumped by an annual 82.9 percent, the Turkish Statistical Institute said on Tuesday.

The price of property in Turkey is surging as consumers seek to protect their wealth from the erosive effects of inflation, which accelerated to a two-decade high of 70 percent in April. The government ordered the central bank to cut interest rates late last year despite inflationary pressures. It has also instructed state-run banks to lend cheaply.

Annual interest rates on mortgages stood at an average 18.33 percent in the week to May 6, central bank data showed. House prices jumped by an annual  96.4 percent in February, the central bank said in a report last month.

Earlier this month, President Recep Tayyip Erdoğan said his government would help alleviate the cost of higher property prices by offering zero interest rate mortgages to low income families. He also said the government would provide financing for unfinished housing projects provided the developers froze prices for a year.

House sales to foreigners increased by an annual 58.1 percent to 6,447 units as Russians topped the list of purchasers, buying 1,152 units. Iranians bought 905 properties.

Turkey is offering citizenship to Russians and citizens of other countries who spend at least $250,000 on a property. That lower limit is due to rise to $400,000 next month, the government said last week.

Russians have topped the annual list of visitors to Turkey in the past several years. The government has refused to follow many Western nations in imposing sanctions on Russia for its war on Ukraine. Several of its oligarchs have parked their luxury yachts off Turkey’s southern coast to avoid seizure in Europe.   

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