Panic buying and panic selling appear to be one of the reasons behind the sharp increases in house prices in the secondhand market, an expert has said.
“Most of the people offer their homes on the market in order to buy another one. As the price of the house they want to purchase rises, they, in return, are asking even higher prices for the properties they are selling,” said Gökhan Taş, the chair of Coldwell Banker Turkey, explaining why home prices keep rising in the secondhand market.
He added that people are turning to real estate in the face of the high inflation to protect their savings, which creates additional demand for homes.
With the expectation that the prices will go up further, potential homebuyers act quickly, Taş said. “They are paying 5 million Turkish Liras for a home whose worth is actually 3 million liras. At this point, prices of other properties in this location increase.”
Taş said that the supply shortage is the biggest problem facing the housing market, which also leads to increases in home prices and rental prices.
Other experts also cite strong demand and the lack of supply as the reasons behind the price hikes in the secondhand housing market.
Prices of newly built houses put up for sale in the market have been increasing due to higher costs. Since people cannot afford those new houses, demand is shifting to secondhand properties.
Secondhand home sales account for 70 percent of all house sales in Turkey.
Potential home sellers look at the price of newly built houses when they set the asking price for their existing homes, said Hakan Akdoğan from TÜGEM, an association for real estate consultants.
“There is nothing wrong with making such a comparison.But, if a new apartment in your neighborhood is put up for sale at 5 million liras, you cannot ask 4 million liras for your 30-year-old apartment.”
In Istanbul, the price of a newly built apartment starts from 8,000 liras per square meter and can go up to 60,000 liras to 70,000 liras, according to a study by TSKB Real Estate Appraisal.