Mortgage in Turkey: a loan to those who do not have a home, not to investors!

A new era has begun in the field of mortgage lending. The banking regulator (BDDK) has introduced restrictions on loans for those who buy a second home. Now, if a consumer already has a property, he will be able to take out a loan not for 90% of the cost of a new house, but only for 22.5%. The goal is to ensure access to housing not for investors, but for those who really need it. A new campaign is expected for those who buy their first home.

The first concrete step was taken within the framework of statements by government officials that “housing should not be an investment tool.” The decision announced the other day says: “If the consumer, his spouse or children under the age of 18 already have at least one home, the loan will be provided taking into account a 75% reduction.”

For example: previously, a person buying a house worth 3 million liras could request a loan for 90% of the cost, regardless of the amount of real estate available. Now, if he already has a house, taking into account the 75% limit, he will be able to take out a loan for only 22.5% of the cost, that is, 675 thousand liras. The initial payment will be not 300 thousand, but 2 million 325 thousand liras.

The new solution will not affect those who buy their first home. They will be able to use a loan of up to 90%, depending on the cost and energy class of the housing.

Expectations and possible consequences

The goal is to increase the share of real homeowners by redistributing credit opportunities. It is planned to stabilize price growth by reducing demand.

However, if the process is delayed, it can lead to a decrease in production and an imbalance between supply and demand. Reducing the number of those who buy housing as an investment can lead to a decrease in the number of rental properties. Regulation will have the strongest impact on the cottage market. Due to restrictions on loans, significant reductions in sales of dachas, which are second homes, are expected.

Share of credit sales

In Turkey, the share of credit sales in total sales ranges from 10.5% to 25.4%. According to TÜIK data for July, this share is 13.3% — the minimum for the last 7 months. Consumers prefer cash and installment purchases due to rising interest rates.

Expectations for loans for the purchase of a first home

Details of the expected campaign for those who buy their first home have not yet been announced. It is expected that the interest rate on the loan may decrease to 1.2%, and the loan term will increase to 15 years.

Source: Hürriyet / Gulistan Alagöz

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