Published On: Mon, May 7th, 2018

Turkey’s government seeking solutions to reduce housing stocks in the sector

Turkey’s government seeking solutions to reduce housing stocks in the sector

High rise buildings in Istanbul

 

Construction has always been the locomotive sector in Turkey’s economy. In fact the ruling AK Party has used it to strengthen its position in power and managed to form a core group of rich businessmen involved in the sector who have never denied the ruling party their endless support. In more simple words AK Party has created many billionaires thanks to the advantages provided by the construction sector.

The benefits have not been limited to those mentioned above. In fact it has always been very comfortable to persuade people that the party/government works real hard and for the good of Turkey all this time. The only thing needed to do for the ruling party has been to draw the attention of citizens to construction works accomplished in the country. That has brought along the slogan “But, they are working”… People have always preferred to believe and be persuaded what they could see and touch. They have hardly cared about how all that was financed and if the assets of the country were sold one by one, the economy was based on trade rather than production etc etc.

Today however, leave alone the unpleasant situation of the economy based on high inflation, devaluating Turkish Lira and high interest rates etc., even the construction sector (a locomotive as explained above) seems to be quite a headache for the administration, as well.

To verify this, PM YILDIRIM has mentioned in one of his statements the government has decided to start a campaign about this issue. He said, “Ziraat Bank and other banks will campaign to reduce stocks in the housing sector, so that the wheels can start turning again.”

Despite warnings for the “artificial growth” in the housing sector for several years, the sector where the country’s resources are invested seems to have come to a standstill. While many completed housing projects cannot be sold, many construction companies are requiring re-structuring loans borrowed from banks.

Another point to verify this situation was observed last week: An important step was taken regarding the housing sector and 18 percent VAT applied at property deliveries was reduced to 8 percent and deed tax was reduced from 4 percent to 3 percent (both valid until 31 October).





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