‘Stagnation to strike real estate market in Turkey’
Posted by meb at September 23rd, 2008
The Turkish real estate sector will experience a period of stagnation due to the global financial turmoil stemming from the collapse of the US subprime mortgage market, a real estate sector representative has predicted.
Association of Real Estate Investment Companies (GYODER) President Bekir Cumurcu told the Anatolia news agency that he expects a slowdown in the Turkish real estate sector to begin early next year and persist until 2010.
Pointing to the unprecedented developments in global markets, Cumurcu said he does not anticipate a recovery in the short term. He noted that the real estate sector is among the most fragile sectors and that the global financial crisis therefore is having a much greater effect on it compared to other sectors. Stating that it will take time for the sector to bounce back from the negative impact of the crisis, he said the growth in the sector will start to decelerate in 2009.
“We also expect a decrease in Turkish exports. Foreign investment in Turkey will decrease in the medium term. The combination of these developments will cause stagnation in the Turkish real estate sector,” he explained. He also predicted a decrease in domestic investment in real estate. However, he noted, banks in the US failed because they had extended a large number of subprime mortgages due to the liquidity surplus, but this had not occurred in Turkey. He stated that Turkish real estate investors may have difficulty in paying back the loans they’ve taken out, but that this situation will not continue for long and the banks will not be significantly affected by this problem.
source: Today’s Zaman
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