Housing sales not even stagnating
Housing sales figures for February were released and we saw that there was a decline of 5.4 percent in sales when compared with the same month the previous year. First sales in February declined by 3.1 percent while second-hand sales declined by 7.1 percent.
Total sales declined by 2 percent in the first two months; 1.5 percent in first hand sales and by 2.3 percent in second hand sales.
Things are not looking good in the housing industry. This is evident in the figures as well as real life.
According to the figures gathered by Turkish Statistical Institute (TurkStat) and the General Directorate of Land Registry and Cadaster, there was a decline in housing sales over the last three months of last year in comparison with the 2016. There was a moderate increase this year in January but sales declined again in February.
A total of 1.4 million homes were sold in the last 12 months at the end of February. This figure is only 53,000 more than the sales over the the same period the previous year.
On the one hand, our population is soaring and the need for housing is rising. On the other, supply is also soaring and surpassing demand. Nonetheless, based on the rising population, sales should still be increasing, but they are in decline.
Isn’t that odd? We can’t sell houses but we continue to invest so heavily with the idea or hope of a future demand? Let’s assume there will indeed be a future demand. But how? What will lead to an increase in demand?
Huge decl ne n mortgage sales
Mortgage sales in February decline by 28 percent, the sixth consecutive month of decline. Mortgage housing sales in the last four months of the previous year and the first two months this year were in decline when compared with the same period last year. Total mortgage housing sales over this period came in at 207,000, down from 263,000 over the same period a year before. According to these figures, mortgage sales declined by 21 percent in the last six months when compared to the
same period the previous year.
Th ngs seem d re!
Total housing sales declined every month in the last five months compared to the same period last year with January being the only exception. Mortgage sales declined over the last six months. And the total rate of decline is above 20 percent.
People are avoiding mortgage sales primarily for two reasons: 1) First hand sales are far too expensive for them; and 2) despite options with affordable prices, credit interest rates are too high. Current rates are high for one thing but also the constant debate over reducing rates creates the perception that rates may be cut at any moment, leading people to wait.
The expectation that housing prices will go down and the possibility of an interest rate cut underscores why people considering to buy a house prefer waiting.