Real estate markets in four major cities dropped by 6 to 12 percent in the weeks right before the elections. The downward trend has continued since April because of uncertainty over the outcome. Constructors complain that their rising costs are not reflected in current prices and plan an increase of 10 percent
Real estate markets across the country faced the July 22 elections at base prices. The uncertainty of the outcome and summer drowsiness has caused market prices to drop continuously since April. Five major Turkish cities reflect the downward trend in real estate, with prices dropping by 6.6 percent in Istanbul, 18.1 percent in İzmir, 9.3 percent in Bursa, 14.5 percent in Antalya, and 4.5 percent in Ankara. All cities except Ankara showed a 6-12 percent drop over July 1-20 alone. However, real estate agents, project developers, and constructors predict that the political stability and economic policies following the election will revive the market in the next few months. It is expected that the election results – a single-party government – will put an end to the stagnation and drop in the market, with postponed demand picking up in September. Ali Ağaoğlu, chairman of the board of Ağaoğlu Group of Companies, predicted that investments would continue with the political stability following the elections. Nazmi Durbakayım, chairman of the board of Teknik Yapı, said that a decrease in interest rates will support the dynamics of trade but that there will not be a boom like that in 2005. He continued by saying that some of the increased costs in building material are not reflected in current prices. Construction companies plan to raise their prices – down to catalog prices before the election – to compensate for their current financial troubles. Managers of well-known construction companies like Ali Ağaoğlu, Nazmi Durbakayım and Yaşar Aşçıoğlu are planning an increase of about 10 percent in the first stage. Yaşar Aşçıoğlu, chairman of the board of Aşçıoğlu Construction, said that companies will introduce new projects starting in September after political issues regarding the presidential elections settle. Bahadır Teker of Istanbul Kapital predicted an increase in foreign capital flow. He foresaw the most action in necessary and important urban transformation projects. Nabi Cücük, general manager of Reha Medin Real Estate Consulting, said that there is no expectation regarding foreign exchange and that the stock exchange is brisk; therefore, real estate is the best investment to make at this time. “We asked for a single-party government and it happened. So the investor should forget about elections now and start investing,” he says. According to Cücük, the relaxed political atmosphere will help the Central Bank of Turkey decrease interest rates, which is essential to reviving mortgage loans.
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