The positive impact of the top court's decision not to close the ruling party has yet to be felt in the real estate market, say real estate agents.
Demand is, however, expected to rise following the holy month of Ramadan. Sales in Turkey's real estate sector had stagnated as a result of the global mortgage crisis and the political uncertainty clouding the country. Real estate demand in Turkey will never disappear, but the sector may experience temporary stagnation, said Hilmi Işıkören, general manager of Realty World Turkey. Many people opted to postpone purchasing real estate until the Constitutional Court had reached a final decision on the Justice and Development Party, or AKP, closure case, said Işıkören, adding that the stagnation had nonetheless continued after the court's decision came out in July, one of the most static periods for the real estate sector.
The demand for real estate will never cease as it appeals to the basic needs of the customer, said Işıkören, adding that sales in the sector never fell below 950,000, even in the most stagnant period. The number of sales reached 1.4 million a year in the strongest periods, he added. A total of 997,000 sales of real estate took place in 1996, while this number stood at 937,000 in terms of registry of deeds, said Işıkören. Meanwhile, the average number of sales amounted to 1.3 million in 2005, 2006 and 2007, while this level stood at 341,000 for the first quarter of 2008, he added. �I expect this number to surpass 1 million toward the end of the year,� Işıkören noted.
There is nothing we need to worry about in these numbers, said Işıkören. �There is no stagnation in the real estate sector; instead there are people who do not know enough about the industry. Some the new projects failed to receive the attention of the customers, as a result they were not sold,� Işıkören said. �Meanwhile, projects constructed in the right location and put up for sale at the right price are sold without any problems,� he added.
Işıkören also noted that customers are more likely to focus on the basic features of a property rather than its location, whether or not their purchase is motivated by investment opportunities or personal housing needs.
To attract attention every project, small or big, needs to have a theme to reflect its unique characteristics, said Işıkören. �Multifunctional projects which have a theme and which encompass their own villa, residence, business center, shopping center and even a school and a hospital on the basis of the basic needs of the region will not encounter any problems in receiving the attention of the customers in the upcoming period,� Işıkören said.
The Constitutional Court's decision not to ban the AKP was a crucial decision because it averted the possibility of stagnation in the economy, said Aşkın Çınar, chairman of the board of Retürk Real Estate Consulting, adding that the real estate sector will enter an active period in the upcoming months with the coming of fall, which he said is a very active period every year.
�We can also observe the same activity for this year. The increase in the demand for real estate will in turn increase the prices in the sector for the short term,� Çınar said. �Meanwhile, contractors will begin to launch projects targeting lower and middle income groups for the medium term and this will in turn further boost demand in the sector. However, we need to wait until the spring of next year for the realization of these improvements in the sector,� he added.
The situation in the real estate sector is worse this year compared to last year, said Nabi Cücük, general manager of Reha Medin Real Estate Services, adding that the company expects a revival in the sector from the end of September onwards. Some real estate offices working under his company were becoming involved in subsidiary fields following the temporary lack of demand in real estate, said Cücük, adding that the company had closed these kinds of offices and opened new ones.
Homebuyers generally prefer to purchase new projects, said Cücük, adding that the prices of second-owner houses had declined significantly. �We come across a variety of second-owner houses that are either put up for sale or rent. These numbers will increase,� Cücük said. �We will experience a further decline in the prices of these houses from October onwards following the revival in the sector,� he added.