The Turkish government has long relied on the construction sector as the driving force behind the economy, but in recent years both the sector and the economy have ground to a halt.
With unsold housing stockpiling up and the troubled economy leaving few with the purchasing power to buy homes, the government has tried to reinvigorate the sector, by offering slashed rate mortgages and citizenship to overseas property investors in real estate.
This year, the Turkish government, led by President Erdoğan, forced the central bank to slash the benchmark interest rate by 10 percentage points in three months. In an added effort to stimulate the housing sector, he also ordered state-owned banks to offer low-interest mortgages. But housing sales have continued to drop.
The Turkish government made another attempt to reinvigorate house sales last year by lowering the value of real estate purchases that would allow foreigners to obtain Turkish citizenship to $250,000.
While in October housing sales fell by 2.5 per cent compared to the same month last year to 142,810 across Turkey, sales to foreigners fell by 31.9 per cent in the same period to 4,272.
Treasury and Finance Minister Berat Albayrak has attempted to bt the home property market with a new campaign that will offer 10-year mortgages to people on low wages at a monthly interest rate of 0.5 percent – nearly half the rate offered in the last campaign. The campaign aims to sell 100,000 homes in a year.
The Turkish government has also stepped up its attempts to attract foreign investors to buy property in Turkey by ordering the creation of an office to help foreigners with their purchases under the General Directorate of Land Registry and Cadastre.
The office is to be tasked with helping foreigners in every aspect of purchasing real estate in Turkey and aims to open branches in 12 countries. The campaign is already active online, with websites in Turkish, English, Arabic and German explaining the process of buying property and acquiring citizenship.