The latest report of the International Monetary Fund (IMF) also included a debate over whether a “real estate balloon” has emerged in Turkey in recent years. Observing the real estate market of 57 countries, the IMF noted that the prices in Turkey are ‘swollen’ compared to the emerging market countries and that there is no risk of balloon explosion for the time being thanks to the safety of households.
The IMF’s February Global Housing Monitoring report said housing valuations in Turkey “become bloated”, but macroeconomic spillover effects from the housing market have yet to be expected.
Rent Will Be Preferred
In the latest report, IMF noted that in recent years, cumulative real housing prices in Turkey are higher than in other emerging market countries, and construction companies have a considerable amount of foreign currency debt and a high “non-return credit”. IMF experts estimated that in the period December 2010-July 2016, the nominal value of property prices in Turkey increased by 110 percent and the real value by 35 percent.
Real Prices Increased 35 Percent
The actual prices in the 13 emerging market countries followed by the IMF either declined or stayed on the spot in the same period. Turkey, on the other hand, was one of the three countries where real prices increased by 35 percent and over.
In terms of the change in the price-rent scale, Turkey is following the difference with other countries with a ratio approaching 50 percent, followed by Mexico with 20 percent. In the report also ‘price-annual rent for the year’ opening of the scissors pointed to the bulging price of reminders, reminded that the price of the people would prefer to lease instead of buying is said.