SEYFETTIN – Construction industry doing relatively better

Construction industry doing relatively betterThis year, one of the preferred subjects of discussion in economic circles has been how the slowing economic growth has been affecting the construction sector particularly its housing component.The claim that the industry was experiencing a recession was intriguing to me since none of the economic analysis for this claim was based on solid data However, I have been more or less agreeing that there is a recession as so many people believed there was and I had seen myself that many empty newly constructed housing projects in Istanbul.

Last Tuesday, when the Turkish Statistics Institute (TurkStat) published its housing statistics, I decided to take a closer look. The conclusion is that a revival is expected in the construction sectorThe number of new houses (first time sales) decreased slightly in November 2014 compared to November 2013 (from 48,255 to 48,127) but it increased slightly during the first 11 months of the year from 470,800 to 475,710.

The difference will be understood better when we compare the figures from 2013 and 2014 on a monthly basis. This comparison clearly reveals two trends.

From January to July 2014 the number of new houses sold each month was less than during the same period of 2013. During the first seven months of this year the demand for new houses obviously weakened.

However, since August the demand seems to have become stronger because each month the number of new houses being built exceeded the previous year This can be considered a sign that the slowdown is ending.That said, the issue is rather complicated.

The trends do not apply to every province.In the majority of provinces sales in November and in the first 11 months are higher than in the same months of 2013, but this not the case particularly in big provinces like Istanbul and Ankara Indeed, in Istanbul the number of sales decreased when you compare November 2014 to November 2013 from 9,4777 to 8,828 and during the first 11 months from 92,735 to 90,327.

We can also see similar trends in Ankara Nonetheless, in many other relatively big provinces like Izmir, Bursa, Kocaeli, Manisa and Sakarya the increase in sales is quite impressive. For example in Kocaeli (Izmit), an industrialized province close to Istanbul, the number of sales increased for November 2014 compared to November 2013 from 1,077 to 1,365.

In Sakarya, another industrialized province, the same increase was witnessed, rising from 695 to 827.During the first 11 months there were increases in these provinces but at a lower rate of increase.

This signals a revived demand for new houses.Yesterday, I had lunch with a close friend who has been trying to sell a house in Istanbul and two apartments in Ankara for a long time.

When I told him about this paper and the figures, he objected, giving not only his personal case as an example but furnished me with other examples from his close friends. Given the figures concerning sales in Istanbul and Ankara, it is possible to talk about an economic slowdown.

In Istanbul the number of sales decreased by 7 percent in November compared to last November and by 25 percent in the first 11 months. For Ankara the rates of decrease are lower (0.

5 percent for November) but there were still decreases. Considering the opinions of individuals living in Istanbul and Ankara, their thoughts on the slowdown seem fair given the sales figures for new houses.

Seeing as media is concentrated in these two cities, the story of a slowdown in the construction industry is quickly spread. Before finishing this article I would like to draw your attention to the sales of houses (new and old builds) to foreigners.

The total number of sales was 10,740 during the first 11 months of 2013 but jumped to 17,104 in 2014. Two cities, Antalya and Istanbul, monopolize the majority of these sales.

Together they make up 11,100 out of 17,100. The increase in sales in these two cities was quite impressive, particularly in Istanbul.

The number of sales went from 5,088 to 6,035 for the first 11 months in Antalya, but from 2,052 to 5,046 for Istanbul. Obviously the light slowdown in Istanbul has been lightened by foreigners.

SOURCE: Today’s Zaman