September 19, 2018 / 11:47 AM / 9 months ago

Turkish house sales tumble in August

ISTANBUL, Sept 19 (Reuters) - Turkish house sales dropped 12.5 percent year-on-year in August to 105,154 and mortgaged house sales tumbled by two thirds, data showed on Wednesday, as expectation grows of a sharp economic slowdown in the second half of the year.

The decline marked a turnaround from July, when overall house sales rose 6.9 percent from a year earlier, and the first decline in sales since April.

Growth in the Turkish economy slowed to 5.2 percent year-on-year in the second quarter and the slowdown is expected to gather pace in the latter part of the year as Turkey grapples with a currency crisis.

Mortgaged house sales, which account for just 12.1 percent of all sales, slumped 67.1 percent year-on-year in August to 12,743, the Turkish Statistical Institute said.

Turkey has taken measures to revive the sagging property market. In May, a group of real estate firms said buyers would get a 20 percent discount on house prices and downpayments for mortgages would be cut to 5 percent for one month.

That move came after state-owned lenders lowered their mortage rates after President Tayyip Erdogan urged local banks to help boost the sector.

In one bright spot for the sector, house sales to foreigners surged 129.6 percent in August to 3,866.

The central bank raised its key rate by 625 basis points last week, the biggest such hike in Erdogan’s 15-year rule, to support the lira and cut inflation which surged to 17.9 percent in August, its highest since 2003. (Reporting by Daren Butler Editing by Dominic Evans)

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