Following the Central Bank’s latest rate announcement, Algün Chairman Cihat Algün said that pent-up housing demand will now become active. “When people who are waiting to buy a home see a downward move in loan rates, they act immediately,” Algün noted.
“After the CBRT lowered the policy rate from 46 percent to 43 percent, we will once again see record-breaking sales figures in housing, as we have in previous instances. From now on, loan rates will decline, consumption and investment will rise, and the housing market will surge.”
Assessing the potential effects of the Central Bank’s cut on construction and real estate, Algün stated that reducing the rate to 43 percent will invigorate the market. He pointed to Turkey’s housing shortage, saying that the balance in the sector has been disrupted and rapidly rising rents are pushing people to buy homes. “All eyes were on the Monetary Policy Committee, we were all waiting for this decision. By cutting the policy rate by 300 basis points to 43 percent, the CBRT has fulfilled the call we have repeatedly made, ‘Interest rates must fall for home sales to increase.’ This move will mobilize those who have been waiting to become homeowners, and in the coming period we will see encouraging numbers, especially in mortgaged transactions. Home sales will take off.”
Algün recalled that, as in every sector, construction costs keep climbing and are reflected in home prices, adding that the financial burden has become unsustainable and prices will rise further. “Housing prices will not fall, on the contrary, they will climb even higher. That is why anyone waiting to buy moves quickly when they see loan rates trending lower. As before, we will now witness figures in housing sales that can be called record-breaking, loan rates will fall, and because borrowing becomes cheaper, consumption and investment will increase.”