Istanbul Gelisim University - “Postponed marriages cause an increase in estate prices and rents”

“Postponed marriages cause an increase in estate prices and rents”

Noting that there have been noticeable increases in estate market and rents, Finance Specialist Dr. Hakan Yıldırım said, "The rise in marriages postponed due to the epidemic this summer cause significant increases in both estate market and rents."

Finance Specialist Dr. Hakan Yildirim made statements about the increase in estate prices and rents.

Stating that the monthly increases make it difficult to own a house, Dr. Yıldırım said, “It is an undeniable fact that there are more than one reason for this increase. It would not be wrong to say that there has been an increase in demand due to the fact that the exchange rates behave in a constantly increasing trend, the increased inflation caused by this trend, the perception caused by the uncertainty due to the epidemic period, and the formation of a population that believes the housing prices will increase continuously due to this situation.”

“COST INCREASE REFLECTED ON HOUSING PRICES”

Emphasizing that increasing exchange rates and inflation cause significant increases in the materials and labor costs to be used in construction, and that the increases in costs are reflected in the housing prices, Asst. Prof. Hakan Yıldırım said, “On the other hand, excessive demand brought about by uncertainty is an important factor in the formation of price bubbles. Especially in 2021, the increase in housing prices caused significant increases in rental prices. The fact that the landlords are racing to raise rents above the inflation rates or trying to find new tenants who are willing to remove the existing tenants and pay higher rents with various excuses, as well as the scarcity of rental properties, are the important reasons for the increase in rental prices.”

“SUDDEN PRICE DROPS HAVE A NEGATIVE EFFECT ON THE ECONOMY”

"The explosion of marriages postponed due to the epidemic this summer caused significant increases in both estate market and rents” said Dr. Yildirim and continued:

“However, it is useful to make this distinction. Price increases caused by exchange rate, inflation rate and demographic-based changes may tend to improve over time. However, the transformation of the price bubbles into larger bubbles and the deflating of these bubbles after a certain period of time may cause serious problems in the housing market. This situation may put the construction industry and homeowners in a difficult situation. It is an indisputable fact that if necessary measures are not taken for the construction sector, which is one of the building blocks of economic growth in the recent period, sudden price drops that may occur due to the price bubbles will adversely affect the country's economy.”

“THE REASONABLE HOUSING SHOULD BE FOCUSED WITH TOKI'S SUPPORT”

"It is necessary to focus on the construction of attractive housing in terms of maturity and price with the support of TOKİ in regions where the population is dense" said Dr. Yıldırım and summarized, “Thus, the increase in housing supply will restrain the increase in prices to some extent and it will enable the demand to continue. It should not be forgotten that one of the most important reasons for the 2008 global crisis was the bursting of bubbles in the housing market.”