Turkish entrepreneurs expect a recovery in the construction sector in Turkey in the third quarter of next year, said the head of the Anatolia Contractors Association. The sector has been through a difficult period since August 2018, but interest rate cuts have been supporting the industry since late last summer, said Melih Tavukçuoğlu.
Last year, the Turkish economy faced difficulties related to foreign currency attacks and rising costs and interest rates, which led to a slowdown in the construction sector. The US dollar/Turkish lira exchange rate, currently hovering around 5.6-5.7, rose to 6.5-7 last year from 3.8 at the end of 2017.
The Central Bank of Turkey has lowered its key rate from 8% to 24% last year to 14% gradually during monetary policy meetings this year. Currently, private and state-owned banks grant housing loans with interest rates of around 0.8% and 1%.
Tavukçuoğlu stressed: “These levels, up to 0.7% to 0.8% or even 1%, are excellent rates for our sector.” Meanwhile, the demand for houses is not at the desired level but is much better than the rates of 1-1.5 years ago, he noted.
“About 200 types of goods are built for the construction sector in Turkey,” he said, adding that the construction sector in Turkey should be revived for all these secondary sectors.
In Turkey, every year, about 700,000 new houses are built while more than 1 million new and second-hand houses are sold.
The country eased citizenship requirements for foreigners last year by reducing the property value limit to $250,000.
Following the decision, the number of home sales to foreigners increased by 19% year-over-year in the January-October period.
Turkey Focuses on Africa, Russia, and the Middle East
Turkey is the best country after China in the global construction market with its cost advantage and the pace of projects, he said.
So far, Turkish contractors have undertaken about 10,000 projects worth $400 billion in 126 countries.
“But there is a recession in the world. We have targeted dynamic regions such as Africa, Russia, and part of the Middle East,” he said.
Turkish entrepreneurs are taking on significant projects in African countries, Qatar, Russia, and the Turkish republics.
He added: “I hope that the Syrian war will come to an end and that a consensus will be reached in Iraq. There will be a serious investment here.”
Turkey competes with Italy, Germany, and the US in the global construction market, he noted. Turkish contractors, who complete projects quickly, can also take on high-quality construction projects that require longer lead times and higher budgets resumption of construction.
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