Abstract
The Turkish residential market supported by macro-economic developments is of great importance for the country's economy and the construction industry. The main purpose of this study is to analyze the Turkish residential construction market dynamics, especially in terms of price-cost and supply-demand regimes and conduct future projections. For this purpose, analysis of construction cost and residential price indexes, total and mortgaged residential sales, and construction and occupancy permits were evaluated utilizing institutional data. In addition, positive and negative effects of the changes in the residential prices in the macro scale were examined. After, conducting the residential price and cost change analysis for between 2010-2023, future stock volume and residential market projections were carried out. As a result of the analysis, we can divide the residential market into 3 periods: positive development period between 2010 and 2015, the recession period from 2015 to 2019, and the period after 2020. In the projection, depending on the supply contraction and the results of demand changes, price and cost increases, the current residential stock volume will reach its lowest level by 2023. Following this, the last period is expected to reach a more balanced residential market shaped by need-based purchases rather than individual investments.
Highlights
Construction is generally known as an activity with many specific features which differs from other industries; construction activities have always been closely connected with the social and economic activities of every country
The main purpose of this study is to analyze the Turkish residential construction market dynamics, especially in terms of price-cost and supply-demand regimes for three different time periods (2010–2015, 2015–2019 and later) and conduct future projections based on construction costs
As a result of the analysis, in the period between 2010 to 2015, the new residential price index and the construction cost index difference where we can call it as profit + land margin (Profitability at a level that will allow new supply) is in a reasonable market condition (Delta 1)
Summary
Construction is generally known as an activity with many specific features which differs from other industries; construction activities have always been closely connected with the social and economic activities of every country. Monitoring historical development of indicators such as price-cost and supply-demand regimes is important in evaluating the residential market that shows a significant contribution to the growth of Turkey’s economy. The main purpose of this study is to analyze the Turkish residential construction market dynamics, especially in. In the second part of the study, including the new economic program of the country for the three-year period starting from 2020, residential price and cost change analysis were conducted for between 2010–2023. Depending on the current stock and stock absorption rate, future stock volume and residential market projections were carried out
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