Turkey A Front Runner In Europes Increasing House Prices
News Posted On: 27 February 2014
The house price rate of appreciation index shows Turkey leading the European charts, during the January-September period in 2013, as per statistics from Knight Frank, a consulting agency in real estate. The house price average value saw a 12.5 percent rise during Q1,Q2 and Q3, when compared to last year's prices in the same quarters. The company estimates that there will be a rise of about 10-15 percent this year, in wake of the construction cost hikes.
What the statistics report
As per Knight Frank's statistics, Turkey bags the sixth position worldwide, with Dubai bagging the first place with its residential home prices at 28.5 percent, and China in the second spot with a 21.6 percent. Despite China's political crisis, Hong Kong saw its homeowners enjoy a 16.1 percent gain in properties, while Taiwan saw house prices rise by 15.4 percent. Brazil closely followed Turkey with a 11.9 percent.
Turkish Central Bank recently released a report on European house prices up till 2012 with Turkey showing the highest increase of five percent. Another research company, Reidin, reports that the Turkish house prices saw a 13.32 percent increase between November 2012 and November 2013. As per the statistics, Istanbul saw the highest increase in house prices of 17.06 percent, with Kocaeli reporting the lowest increase.
Adana and Izmir took the spots following Istanbul, registering 12.06 percent and 10.51 percent respectively. Another study by Reidin, which takes high-end brand projects into account, reports a rice in house prices in Turkey of 14.75 percent. The study shows the appreciation rate to be the highest in the European side of Istanbul with a 10.78 percent, while the Asian side of Istanbul reports a 9.01 percent, garnering the second spot.
Construction companies predict a hike in house expenses
Construction company Chairman, Ferhat Bakgor, says the depreciating value of lira has caused the iron prices to rise up by 10 percent, while a 35 percent increase has been reported by the furniture prices, which have in turn shot up 2013's house expenses by nearly 10 percent. Aside this, the regulations that have recently come to the fore, will cause factors such as land expenses and other costly items to show up in 18 percent of the net cost assessments, when compared to the one percent previously. These changes are bound to impact the construction costs along with the house prices adversely, he says.
Emin Ustun Chairman Eminevim, agrees with Bakgor's prediction that there is a likelihood of house prices shooting up by 10 percent. Azia Tarun, President of Real Estate Investing Partners Association says the house price rise is an inevitable occurrence. He predicts 2014 will see monetary expansion stalling, which although a disadvantage, can be recovered through economic and political stability.
A few people will put away plans of buying new homes on the shelf, which would affect the construction companies, he says. Foreign investors and local consumers may open up to the increased rates if they see the stability return, say a few others.
Written by Les Calvert
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