Turkish home sales down 18% after strong earthquakes | Daily Sabah

Residential real estate sales in Turkey fell 18% in February this year compared with a year earlier, official data showed, reflecting the impact of the catastrophic earthquakes that hit the country last month. A total of 80,031 homes were sold last month, the Turkish Statistical Institute (TurkStat) said, the lowest level since May 2021. The magnitude 7.7 and 7.6 earthquakes on Feb. 6 killed more than 48,000 people in Turkey's southeastern region. They also destroyed or severely damaged more than 230,000 buildings, leaving hundreds of thousands homeless, making it the worst disaster in Turkey's modern history.

Fears of future tremors, especially in Istanbul, Turkey's largest city with a population of about 16 million and the country's commercial center, have made people reconsider their plans to buy property. The data showed home sales fell 18.1 percent from the 97,708 units sold in January. Istanbul had the largest share of sales with 18.7 percent or 14,980 homes sold in February, TurkStat said, followed by the capital Ankara with 8,235 and the Aegean province of Izmir with 5,031 units.

Last month's disaster forced millions of people to flee 11 southeastern provinces, home to 14 million people. President Recep Tayyip Erdogan ordered reconstruction to begin immediately and said the devastated areas would be rebuilt within a year.

The fall in the housing market comes against a backdrop of shrinking supply and rising prices. Households viewed real estate as an attractive investment vehicle to protect themselves from stubborn inflation, which reached its highest in 24 years in October before falling back. The annual Consumer Price Index (CPI) fell to 55.18% in February, a significant regression from the peak of 85.5% recorded in October last year.

Last year, the government announced several measures to stimulate home sales and address prices that more than doubled as residents struggled to find affordable housing to rent or buy.

TurkStat's data showed that home mortgage sales in February fell 12.7% year-on-year to 17,357 homes, accounting for 21.7% of total sales. The statistics institute also reported that January-February sales were down 4.4% from a year ago to 177,739 units. Mortgage sales fell 11.8% to 33,560 units.

According to the data, home sales in 2022 fell slightly by 0.4% from a year ago to nearly 1.49 million homes. Meanwhile, sales to foreigners fell 27% to 3,350 and accounted for 4.2% of total sales in February. Russians topped the list of foreigners with 1,183 homes purchased, reflecting how many people are seeking financial refuge after Moscow's invasion of Ukraine and the impact of Western sanctions. Russians are followed by Iranians with 446, Iraqis with 173 and Ukrainians with 142 homes purchased last month. Russians bought a record 16,312 homes in Turkey in 2022, triple the number of acquisitions and making them the largest foreign buyers in the real estate market. Purchases by foreigners rose 15.2% to a record 67,490 units. Ukrainians who flew to join their relatives in the southern province of Antalya also increased their purchases by 106.6% to 2,574 units.