Let’s start with an introduction to the economy as if it first comes down to the roof: If the price of a good or service increases, the producers will supply more of it. According to the researches between 1992 and 2016, real house prices and the number of houses receiving construction license act together in line with the supply law in Istanbul.
In other words, as real prices increase, new housing construction starts to increase. When real prices enter a decreasing tendency, the number of new housing starts is decreasing.
As everyone knows, almost all the constructions in our country are made for “flood”.The dominant method in residential construction is based on a joint venture with the landowner and the contractor from the largest contractor to the smallest. Of course, widespread production is on small parcels of 10-20 apartments. It is essentially a contractor who needs financing in this mode of production. The greatest commercial success of this small contractor is to obtain finance of the construction with sales that will realize while construction continues. So he is trying to sell the house that produce as fast as possible. He can start a new building as long as he sells it. In other words, as the construction sector sell, it can do. In the housing market, manufacturing begins with a construction license and ends with permission to use the building. However, the actual purchase and sale of the housing starts with purchase of construction license and continues after permission to use the building. In other words, while the houses are under construction and after construction is over, they will be on sale in the market.