Economics
Real estate contraction
Recent developments in global markets coupled with the increase in interest rates have led the real estate sector to experience a period of contraction, causing a decrease in prices.
The Chairman of the Istanbul Real Estate Agents Chamber has recently announced that the credit crunch and political stalemate with respect to the governing party have led to congestion in the sector with a contraction of 50% in recent months and almost no large transactions for a long time.
“The construction firms cannot start their projects because of financial difficulties. Despite saying that construction projects would be concluded in two years, they are now trying to lengthen this period to six or even seven years in some cases when negotiating with their customers. Moreover, the interest rates are quite high and we think they will keep rising in 2009 further aggravating the current crisis in the real estate sector.”
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