19.Aug .2022 15:00

Türkiye set to convert offices to homes to address housing prices

Türkiye set to convert offices to homes to address housing prices
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As house prices and rent climb in the country, Environment, Urban Planning and Climate Change Minister Murat Kurum announced that Türkiye would convert 4 million square meters of offices across the country into homes.

Kurum said in a social media post on Thursday that this would be equivalent to 50,000 new housing units, citing that in Istanbul alone, there were 1.5 million square meters of offices that remain unused due to a surplus in construction. A new regulation will allow the conversion.

Published in the Official Gazette, the regulation gives a deadline of July 1, 2023, for conversion. Independent units of buildings, under construction or registered as offices but not yet in use will be converted into houses.

The demand for housing in Türkiye continues to grow, but supply continues to lag, keeping real estate prices elevated and squeezing buyers out. Strong demand is being driven by individual buyers and investors, who are trying to take advantage of the hot housing market, as well as the growing population. But limited inventory has pushed up prices, with residents struggling to find affordable homes to rent or buy. Add to that the fact that the construction permits remain low despite a slight rebound following a dip in 2019, as builders struggle with shortages and higher prices for supplies. Still, residential property sales have been rising despite high borrowing costs and soaring prices. The demand for housing in Türkiye is said to have reached 800,000 units per year, versus a supply that has been hovering at around 550,000. Sector players are citing soaring costs, land prices and fluctuations in the economy as the main reasons behind lower real estate production.

The country also plans to unveil in September what Kurum dubbed the "biggest social housing project" in the history of the Republic of Türkiye on Wednesday. Kurum told reporters in Istanbul that their announcement of the plan already led to a decline in housing prices and the real estate market was expected to launch new discount campaigns in a few months, Daily Sabah reports.