Environment, Urban Planning and Climate Change Minister Murat Kurum announced that President Recep Tayyip Erdoğan will announce the details of the biggest social housing move in the history of the Republic on September 13. The statement of the Minister Institution, which gave the message "The date is September 13 in the social housing project of the century", excited the housing sector. Industry representatives, who expect a decrease in housing prices with social housing projects, state that the regulations to be made in the form of "low interest and long term" in consumer housing loans will give the sector a breather. The sector also draws attention to the need to restructure the bank loans and tax debts of construction companies.
“Construction costs increased 106 percent annually”
Bekaş İnşaat Chairman of the Board Bekir Karahasanoğlu evaluated the housing loan expectations of the construction sector and the debts of the companies in the sector. Pointing out that there is a period of high inflation in the economy, Karahasanoğlu pointed out that this situation directly affects housing prices.
Referring to the construction input costs statistics of the Turkish Statistical Institute (TÜİK) for the period of June 2022, Bekir Karahasanoğlu said, “According to TURKSTAT, the construction cost index increased by 3,47 percent in June compared to May and by 106,87 percent compared to the same month of the previous year. . The material index increased by 4,16 percent compared to the previous month, and the labor index increased by 0,72 percent. In addition, the material index increased by 130,59 percent and the labor index increased by 45,67 percent compared to the same month of the previous year. These figures are directly reflected in housing prices. For consumers whose income does not increase at the same rate, it becomes impossible to buy housing. In this case, it is necessary to re-regulate housing loans.
“Credit and tax debts of companies in the sector should be restructured”
Pointing out that the construction industry expects restructuring in housing loans for consumers in the form of “interest rate cuts and long-term”, Karahasanoğlu also touched upon the debt burden of the construction industry. Karahasanoğlu said, “The construction industry faced high inflation before it got over the trauma it experienced during the pandemic. Construction and labor costs are increasing every month. For this reason, the debt burden of the sector is also increasing. Construction companies are having a hard time paying off their loans. Parallel to the increase in fuel and input costs, our debts are also increasing. For this reason, bank loans, SGK and tax debts of companies in the sector should be restructured.
“Construction costs are higher than housing prices”
Karahasanoğlu continued: “Housing manufacturers do not increase house prices. When the construction cost indices of TURKSTAT are followed, it will be seen why the housing prices have increased. For example; Let's say you sell a house that costs 1 million liras for 1.2 million liras. When we try to rebuild the house with the same features, you cannot do it for 1.2 million liras. Since the costs are constantly increasing, you may not be able to build the same house for 1.5 million liras. This situation challenges both us and the consumer. In other words, housing price increases are generally below housing costs. For example, you cannot buy dollar-indexed construction materials at the same price. The industry is experiencing this handicap. Construction costs are higher than housing prices. There are companies that make a loss from sales.”
“Measures should be taken to revive the industry”
“It is necessary to take measures that will revitalize the sector and give it a breather.” Bekir Karahasanoğlu pointed out that the government's social housing projects are an important step. Karahasanoğlu noted that they are eagerly awaiting the project to be announced on September 13 as the “social housing project of the century”, and emphasized that the arrangements to be made in the form of discounts in housing loan rates and long-term housing loan rates along with these projects are necessary to melt the surplus housing. Bekaş Construction President said, “If arrangements such as restructuring for the credit and tax debts of the construction sector are made, both the consumer and the housing producer will breathe. These regulations will also make a significant contribution to employment.” he said.
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