The US Federal Reserve (Fed) has announced a critical interest rate decision. Raising the policy rate by 25 basis points to 1.50-1.75 percent, the Fed maintained its expectation of “three interest rate increases” for this year. The Fed raised expectations of interest rates for the years 2019 and 2020. The Fed’s interest projections show that it plans to raise interest rates three times next year and twice following year. Analysts said the Central Bank of Turkey (CBT) does not foresee a significant change in interest rate decisions and in following policy stance after the Fed’s decision. Even in the case of rising in the reaction in short-term, it is expected that the exchange side will be rebalanced around 3.85 unless surprise news occurs on the agenda.
Traditional Housing Demand Is Continuing
Consistent with the Turkey Statistical Institute’s data on housing sales, home sales declined by 5.4 percent in February 2018 compared to the same month last year was 95 thousand 953 in Turkey. In this period, mortgaged residential sales decreased by 27.8 percent and were realized at 27 thousand 916 levels. The share of mortgage sales in total housing sales was 29.1 percent.
Household sales to foreign people increased by 32.4 percent in February compared to previous year of the same month and have reached 729 thousand. In February, being placed on the top of sale for foreign people was Istanbul with 604 houses. Istanbul was followed by Bursa, Antalya, Yalova, and Trabzon. Consistent with the nationalities, the most sale houses were made to Iraqi citizens.
The Interest Is Persuader
Sector representatives say that credit interest rates that exceed 14 percent per year in the current situation are a persuader in order to purchase a house. Altan Elmas who is president of housing Developers and Investors Association emphasized that the Turkish people continue to have a strong demand for traditional housing.