Home sales and pricing
F rst sales dropped by 30 percent. Mortgage sales are a d saster w th a 77.2 percent fall compared to January 2018. Total sales also nosed ved by 24.8 percent. W th around 6,500 mortgage sales, th s market s almost dead now.
Clearly, even f rst sales are no good, and they should be cons dered as the ma n nd cator of demand because the d fference between occupancy perm ts and f rst sales are more l kely to prov de us w th a measure of excess supply, or so does tell us a recent CBRT blog.
Mater al costs are st ll very h gh, although they have regressed somewhat from the r peak r se. If we look at pr ces from an nflat on-adjusted (real) standpo nt, home pr ces fell by 8.49 percent. Istanbul and Izm r y elded negat ve returns to home nvestors, by 12 percent and 9.3 percent respect vely n 2018.
Only cheapness can be a tr gger, but not obv ously for mortgage sales. For mortgage sales to p ck up, rates should halve, and for th s to happen nflat on should fall and cred t must become abundant anew. On the other hand, home pr ces fell sharply, yes, but the alternat ves are st ll much more attract ve and potent al nvestors w th ready cash n hand awa t further pr ce drops. Unless home pr ces recover why buy houses for nvestment purposes now?
3-months mov ng averages (annual zed) are not good e ther. The 5 largest c t es, exclud ng İstanbul, posted a 26.4 percent sales drop.
The break-even po nt – that s the opt mal comb nat on of mortgage rates, costs, stock deplet on, home pr ce r ses n terms of pr ce-rent rat os and conf dence - l es so farther away that th s sector won’t rev ve for a long t me. An even bleaker p cture s portrayed by the automot ve sector. Expect bad pr nts n both for many months to come.