Turkish President Erdogan announces measures against rising real estate prices

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ISTANBUL, May 9 (Reuters) – Turkey’s President Tayyip Erdogan on Monday announced several measures to stem soaring house prices as residents struggle to find affordable housing to rent or buy following last year’s currency crisis.

Property prices have risen over the past year, fueled by inflation which hit 70% in April, an ailing currency, a hot housing market and a growing local population alongside a steady influx of immigrants. Continue reading

After a cabinet meeting, Erdogan said cheaper home loans would be made available to those who convert their forex savings into lira or sell their gold to the central bank to use to buy houses worth up to 2 million lira.

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Interest rates on the loans would be 0.89% monthly, with terms of up to 10 years, he said.

Ankara has urged individuals and companies to convert their foreign exchange savings into lira amid the currency crisis sparked by a series of unorthodox rate cuts by Erdogan.

Erdogan said the home loan measure would aid those efforts and reverse a years-old dollarization trend.

He said loans of up to 2 million lira with a monthly interest rate of 0.99% and a tenor of 10 years would be made available to first-time homeowners.

36-month loans would be given to construction companies to complete some projects if they promise to leave sales prices unchanged for a year, Erdogan said.

“By doing so, we are aiming for quick completion of projects under construction in order to increase the housing supply in the short term and thus balance prices,” he said.

A construction boom has helped spur economic growth in Erdogan’s nearly 20 years in power.

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Reporting by Ali Kucukgocmen; Editing by Nick Macfie

Our standards: The Thomson Reuters Trust Principles.

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