The Association of Housing Developers and Investors (KONUTDER) held the first press conference of its new board of directors. In addition to KONUTDER Chairman Ziya Yılmaz, the meeting was attended by Deputy Chairmen Özen Kuzu, Mert Boysanoğlu, Erden Timur, and Ömer Barlas Ülkü.
A New Model Proposal for High Land Costs
Speaking here, KONUTDER Chairman Ziya Yılmaz drew attention to the fact that one of the items that increases housing prices the most in Türkiye is land costs, and said: “While in developed countries the share of land in total project cost does not exceed 20 percent, in our country—especially in major cities like Istanbul—this rate rarely falls below 40 to 50 percent. This difference becomes one of the main reasons that make access to housing difficult.”
Yılmaz said that they proposed a model in which the public and private sectors can work in synergy to produce a solution to this situation, and stated: “In regions where housing need and supply shortage are high, it will be an important solution for lands produced by the public sector to be given to the private sector on a deferred basis so that their share in total development cost does not exceed 10 to 20 percent depending on the place and region. By imposing special conditions on these lands and requiring the project to start within three years, land hoarding would also be prevented. Housing need can be met quickly and completely by housing developers who meet the qualification criteria and hold A- and B-class contractor certificates.”
Emphasizing that access to housing could increase by 40 percent thanks to this model, which will combine the public sector’s planned land production power with the private sector’s speed and quality capability, Ziya Yılmaz continued: “As a sector, we are ready to provide every support to public authorities in this process. We have conveyed our requests to our Ministry of Environment, Urbanization, and Climate Change for the production of affordable housing. Work is also being carried out within the ministry to solve the problem and produce land at reasonable costs.”
Access to Financing Should Be Restructured
The second important agenda item of Ziya Yılmaz was housing finance. Yılmaz reminded that the average home-ownership rate in the European Union is 69 percent.
Pointing out that the home-ownership rate in Türkiye has fallen to 56 percent, Ziya Yılmaz said, “The rent increases and supply shortages we experience today are directly related to the difficulties individual investors face in accessing finance. At this point, we think that the Banking Regulation and Supervision Agency’s (BDDK) credit restrictions will be lifted in the upcoming period, because the fact that inflation has entered a more orderly path increases this expectation. We are also discussing this issue with our Ministry of Treasury and Finance. It is also essential not to overlook those who have the means to buy more than one house and offer them to the market as rental housing. It is extremely important to lift the BDDK’s credit restrictions for investors who will buy a second home in order to balance the supply and prices of rental housing.”
Yılmaz emphasized that restructuring access to finance is critically important not only for the sector but also for social balance and inflation management.
A Common Vision for Safe Cities
After the shocking earthquake on 23 April, the condition of the building stock in Istanbul in particular caused serious public concern. Speaking about earthquake and housing safety, KONUTDER Chairman Ziya Yılmaz made the following assessment: “Our President Recep Tayyip Erdoğan’s determined emphasis that ‘urban transformation is a matter of life and death’ and our Minister of Environment, Urbanization, and Climate Change Murat Kurum’s statement that ‘more than 600,000 buildings must urgently be transformed’ clearly reveal the seriousness of this situation. As KONUTDER, we welcome this determination and vision; as branded housing developers, we declare that we are ready to take responsibility at the center of this process.”