A significant increase in demand on buying property in Turkey due to a new government decision
During the Corona crisis, the Turkish government has strived to control the general situation since the first cases of the virus were recorded in the country, and after less than two months it was actually able to control the pandemic through a health system that demonstrated the ability of the Turkish medical staff and modern treatment equipment not to mention the huge facilities of hospitals, Clinics and medical cities.
And Turkey’s success in confronting the emerging virus was not only on the medical side, but the authorities in the country fought the pandemic with an effective economic decision package that reduced the heavy burden on millions of families and residents in Turkey, as well as on the working class after freezing thousands of activities and sectors, which led to the mandatory referral of thousands of workers on a sudden to an unpaid vacation.
Through the package of economic decisions, Turkey tried to maintain mobility and activity and help families complete their projects, which were suspended due to Covid-19, among which are the purchase of property in Turkey.
What are the new government decisions that are related to buying property in Turkey?
Before going into government decisions regarding buying property in Turkey, it must be noted that these measures were a major reason for the high demand for purchasing property in Turkey by 50% since the beginning of the Corona crisis.
In this text the Turkish government, as we mentioned previously, has made a package of economic measures, including granting loans at significantly lower interest rates, which was issued in May and June, for helping to stimulate, resurrect and revive the economy in line with the stage of returning to normal after the pandemic.
Three exceptional economic initiatives were sponsored by three major Turkish banks, which are the Ziraat Bank, Vakif Bank and Halk Bank, in addition to two participatory banks, namely the Ziraat Katilim Bank and Vakif Katilim Bank, by launching four packages of loans that include real estate mortgages for new homes, as well as loans for the purchase of cars and locally produced goods and holiday expenses with less interest.
The lending banks set the period of mortgages allocated for new homes and second hand units that are included in the housing package to 15 years, with low interest rates of 0.64 percent and a maximum period of 12 months.
The lenders indicated that the low repayment rate for low shares starting at 10% is applied to the use of the financing.
The five banks confirmed that they are working to ensure that the largest number of customers benefit from the loans by specifying the amount of financing that is provided to each customer at 750 thousand TL, i.e. within the limits of 110 thousand US dollars in order to buy homes in 3 major cities: Istanbul, İzmir and Ankara , While customers in the remaining cities were allocated a maximum of 500 thousand TL.
Since the launch of the reforms packages, the real estate sector in Turkey has confirmed the increase in demand by about 50%, as offers for buying property in Turkey were filled with requests from interested persons who remarkably rushed to all types of property in Turkey.
On the other hand, this low mortgage rates and the length of the payment plans gave the middle-income families the opportunity to purchase property in Turkey after it was difficult for them before because of the high mortgage rates until the last quarter of 2019.
Finally, it should be noted that real estate sales in Turkey, i.e. residential ones, increased by 8.9 percent during the period from January to April 2020 thanks to the payment plans provided by the mortgage and the big reduction of interest rates.