'Turkey's high inflation is driving home sales'
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![Высокая инфляция в Турции стимулирует продажи жилья.](https://cdn.hatamatata.com/pic/blog/3430/HpeDHX6dXiFtWsd95HwM4IuoiajPSbBfZeT7HNA9.webp)
The prices of real estate in Turkey have risen sharply due to a number of factors, including the demand of rich people for property to protect their savings from inflation, which has reached an annual rate of nearly 50%. Demand in the housing market has outpaced price increases by 10 percentage points above inflation, pushing prices even higher. Meanwhile, supply has fallen due to a slowdown in new investment, a result of rising costs in the construction sector.
Pressured by President Recep Tayyip Erdogan
The Turkish Central Bank cut its interest rate by 500 basis points in the last four months of 2021, despite rising inflation and at the expense of contributing to the fall of the Turkish lira. The interest rate cut led to the December''it amounted to 14%, while annual consumer inflation reached 36% and manufacturing inflation at the end of the year almost 80%. The contrarian policies provoked a flight into hard currency and gold as real yields on the lira became deeply negative. Those who invested their money in hard currency and gold were not only able to offset the impact of inflation, but also realized real returns. According to January data from the Turkish Statistical Institute (TUIK), the U.S. dollar made the highest real return of 23% for the year, followed by gold (bullion) with 19.7% and the euro with 14.5%, while those who relied on deposit interest and government bonds suffered losses of 22.75% and 32.7%, respectively. It is for this reason that many''have turned to buying real estate to protect their savings from inflation. Home sales are already up in 2020 and did not lose momentum last year, even as prices rose by 60%. In Istanbul, Turkey's largest city with a 63% annual price increase, the average price of an apartment per square meter is 121% higher than in the capital Ankara and 34% higher than in the third largest city Izmir. 'year. The nearly 60 percent gain in 2021 exceeded inflation by 24 percentage points, meaning that those who invested in housing made at least as much profit as those who relied on the U.S. dollar. And while government interventions have tried to prop up the lira and thus contain the dollar's rise since December, nothing has been able to keep real estate prices from rising.
27 February
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27 February
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