Yasemin Kabalci is a second year business finance student at Istanbul University. She says she’s confident she’ll get a good job one day, but that buying a home will be a lot more difficult.
“At present I am too young to buy a house but I can tell already...that houses are too costly, and you need a lot of savings,” says Kabalci, 22.
Turkey has a well-developed housing construction industry, building nearly 800,000 units per year. But for the moment, most of those are in the high-end of the market, potentially pricing a lot of people out.
This and other issues surrounding the Turkish housing market are addressed in The World Bank’s Country Economic Memorandum on Turkey.
The memorandum finds that while Turkey’s housing finance market has laudable features, such as predominance of fixed-rate local-currency mortgages and modern legislation, it is under-developed in terms of product diversity, funding channels and market penetration.
Lenders serve affluent clients with loans affordable only by the top twenty percent of urban households, the study shows.
“In the case of Turkey, we have a high number of buildings which need to be affordable, so it is important to match supply with demand,” says Orhan Vatandas, Data Analytics Manager for REIDIN, a real estate market information service operating in Turkey.
“That also applies for housing purchasing power, which is essentially governed by income and conditions, and interest rates and maturity rates for the mortgages,” he says.