Turkey’s construction sector will revive in the third quarter of next year, said the head of the Anatolian Side Contractors’ Association.
The sector had a difficult period since August 2018, but interest cuts have been supporting the sector since the end of last summer, Melih Tavukcuoglu told Anadolu Agency.
Last year, the Turkish economy faced difficulties that stemmed from foreign currency attacks and rising costs and interest rates causing slowness in the construction sector.
The U.S. dollar/Turkish lira exchange rate, which is around 5.6-5.7 currently, rose to 6.5-7 last year from 3.8 at the end of 2017.
Turkey’s Central Bank has dropped its policy rate, which climbed from 8% to 24% last year, to 14% gradually during monetary policy meetings this year.
Currently, private and state banks provide housing loans with around 0.8% and 1% interest rates. Tavukcuoglu stressed: “These levels, up to 0.7%-0.8% or even 1%, are very good rates for our sector.”
Meanwhile, the demand for houses is not at the desired level but it is much better compared to the rates 1-1.5 years ago, he noted.
“About 200 kinds of goods are manufactured for the construction sector in Turkey,” he said, adding that the construction sector in Turkey should be revived for all these side sectors.
In Turkey, annually, around 700,000 new houses are built while over a million new and second-hand houses are sold. The country eased the citizenship conditions for foreigners last year by reducing real estate worth limit to $250,000.
After the decision, the number of house sales to foreigners rose 19% year-on-year in January-October period.
Turkey focuses on Africa, Russia, Middle East
Turkey is the best country after China in the global construction market with its cost advantage and pace of projects, he recalled. Turkish contractors have undertaken around 10,000 projects worth $400 billion in 126 countries so far.
“But there is a recession in the world. We targeted dynamic regions such as Africa, Russia and a part of the Middle East,” he underlined.
Turkey’s contractors assume significant projects in African countries, Qatar, Russia, ad the Turkic republics.
He added: “I hope the Syrian war ends and a consensus is reached in Iraq. There will be a serious investment here.”
Turkey competes with Italy, Germany and the U.S. in the global construction market, he noted. Turkish contractors, which complete projects rapidly, can also assume high-level building projects which need longer times and higher budgets.