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Interest rate cut has created optimism in the housing sector!

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Interest rate cut has created optimism in the housing sector!


The Central Bank of the Republic of Türkiye (CBRT) took the step of monetary expansion at the first Monetary Policy Committee (PPK) meeting of 2025 with a one-week repo tender rate cut by 250 basis points. This situation aims to increase housing demand and create a revival in the construction sector by facilitating the access of market factors to financing. Making statements on the subject, Asst. Prof. Mustafa Kerem Börü added that the interest rate cut can contribute to the realization of new projects in the construction sector by increasing the demand for housing.


Housing sales are expected to increase, especially with the decrease in interest rates, while new investments are expected to be encouraged on the supply side. The acceleration of housing production with the revival of the construction sector can contribute to a balanced price formation in the market.
 
Low interest campaigns on mortgages

The interest rate cut is expected to affect most individual investors and first-time homeowners. The “low-interest mortgage for first-time homeowners” campaigns offered by banks provide a significant advantage for households. Access to low-cost credit creates an attractive opportunity for individuals who postpone their investment decision due to high credit costs.
Istanbul Gelisim University Banking and Insurance Program faculty member Asst. Prof. Mustafa Kerem Börü emphasized that although the ease of citizens' access to credit with the decrease in interest rates creates a vitality in the market by encouraging housing purchase, individuals who are considering buying housing should carefully monitor their price movements.
 
Growth prospects in construction and ancillary sectors

The impact of interest rate cuts is not only limited to the real estate market, but can also be reflected in other areas of the economy. Expected mobility in the housing sector can contribute to employment and economic growth by revitalizing the construction sector.
Asst. Prof. Mustafa Kerem Börü stated that the interest rate cut will have a supportive effect on sectoral growth. Stating that the revival in the construction sector also means new orders for companies producing construction materials, Börü said that the increase in demand for cement, iron, glass and other construction materials makes the outlook of these sectors for 2025 optimistic.
Emphasizing that the mobility in the housing sector may indirectly affect many sectors, Asst. Prof. Börü also said, "When the construction sector grows, production also increases in the subsidiary sectors. This situation can contribute directly to employment and bring a wide range of mobility to the economy."
 
Attention should be paid to price volatility

Experts expect the impact of the interest rate cut on market prices to become more pronounced in the coming months. Individuals who plan to invest are advised to carefully monitor the change in housing prices and evaluate alternative investment tools.
Asst. Prof. Mustafa Kerem Börü stated that it is critical to keep prices at accessible levels in order for interest rate cuts to have a long-term and sustainable effect in the housing sector. Otherwise, low interest rates may suppress housing prices upwards, Börü said, stressing that ensuring price stability is important for the healthy growth of the sector.

It is stated that the developments in the housing sector will be shaped depending on interest rates, supply-demand balance and economic conditions in the coming period. It is emphasized that the long-term effects of interest rate cuts should be evaluated together with the general dynamics of the market.


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