'Stock market rally of 2023 is over, real estate crisis is coming in 2024.'

During the day, I gave a seminar on Integral Forex. The topic was "The Impact of New Economic Policies on the Markets". I finished the presentation, and question-and-answer one young guy asked: "Father, you've been saying for two years now that the real estate market will decline, have you ever thought about changing your mind?" No, I haven't thought about it. In 2024, after the local elections, there will be such a reduction in supply in the real estate market that it will take 2-3 years for prices to recover.

The stock market rally in 2023 is over because now Mehmet Şimşek and Gaye Erkan, who hear fish with their ears and lionesses with their minds, are yelling "I'm not leaving the house". The world is full of people who can't see the forest for the trees. There is a very simple rule in economics that we constantly''ve been proving it for 100 years. When interest rates rise, stock market and real estate prices fall. However, the timing of causality changes in every cycle. The same is happening now. Thanks to better than expected economic data in the U.S., Wall Street isn't panicking yet, but when they realize the Fed won't cut interest rates until 2024, the selling will continue.

In the U.S., mortgage rates are at 8%, but real estate prices still aren't falling. Why? Because people have been home for 2 years and no longer want to live downtown, which means above average demand for housing. Also, getting building permits in popular cities and states in the US is so difficult that new construction is not''Indicator. The impact of rising interest rates on stocks and real estate will also take time in reality. There are two other big reasons for the delay in the real estate crisis.

The first is the earthquake. Mass migration to regions and even 3 major cities has led to a sudden increase in demand, which is difficult to meet. When the middle and rich classes, who have high sensitivity to the earthquake, begin to doubt the sustainability of their rental housing, real estate prices do not adjust. After the earthquake, the government remembered its responsibilities and launched a massive rebuilding program to shore up the building stock, which reduced housing supply and kept prices high. Because as soon as 12-unit apartment buildings are demolished''gardens and build buildings of 24 apartments, old owners become tenants.

Take a close look at the data on monthly real estate sales.

This is a very optimistic prediction. I, indiscernible, expect average annual inflation to be around 50% in 2024. To bring that inflation down to 25% or lower by 2025 would require policies of at least 55% and deposit interest rates of at least 60%. Banks want to get rid of deposits as lower interest rates on loans have significantly reduced businessmen's demand. But soon profile''debtors will change and the demand for credit will increase to a reasonable level. Now the enterprises that are really profitable and intend to invest in fixed capital or need additional funds to increase exports will go to the bank. Since their credit risk will be lower compared to the past, the bank will be happy to lend to them.

There is another important reason for the fall in the stock market that I think is not getting the attention it deserves on social media. This is the start of inflation accounting from 2024. Let's read how inflation will affect companies based on Mehmet Akif Soysal's article in New Shafak: "The purpose of this procedure is to recognize the current value of non-financial assets and sources (e.g. raw materials, materials, goods,''will increase. Also the 'hot money' that never comes back to us will faint from this bitter recipe.