Turkish Housing Sales Plunge 17% in July as Monetary Tightening Bites

Housing sales across Turkey recorded a sharp decline of 17 percent in July compared to the same period last year, heavily weighed down by aggressive monetary tightening and soaring mortgage costs.

Tightening Wave Batters Mortgage-Backed Sales

■The number of residential properties sold nationwide continues to shrink as high interest rates erode purchasing power.

■The contraction in banking sector credit lines has triggered a radical drop in mortgage-backed home sales.

■Investors shifting towards alternative yields (deposit rates, money market funds) are slowing down the flow of hot money into the real estate sector.

Smart Money's New Route and Liquidity Squeeze

■This contraction in the housing market is exerting indirect pressure on leading sectors such as construction and cement equities.

■Transaction volumes and brokerage distribution (AKD) data in Borsa Istanbul's REIT (GYO) index reveal that institutional funds are moving into defensive postures.

■Limited foreign investor appetite remains one of the primary factors reducing market depth and slowing down cash flows.

When analyzing market depth data, we observe that liquidity exiting the housing sector is flowing directly into TL deposits yielding 40-50% and short-term debt instruments. Brokerage distribution (AKD) profiles indicate that institutional players are net sellers in REIT equities. In dark pools, we are tracking block sales in large-cap residential developer stocks. For investors, real estate has ceased to be a 'safe haven' and has transformed into an illiquid asset with high carrying costs. It is highly unlikely for this trend to reverse before a rate-cut cycle begins.