The rapidly increasing land costs in recent years are causing housing prices to rise in Turkey. Sector representatives state that this increase in land costs makes it difficult to become a homeowner, especially for low- and middle-income families. Among the solution proposals on the subject is that the state should reduce the costs of housing producers by allocating affordable land.
While the annual housing need in Turkey was around 1 million, the average annual housing production in the last 10 years remained below 750 thousand. In the last 5 years, this figure has decreased to 600 thousand. Especially the increasing population, marriages and investment demand have caused a serious deficit in housing supply. Sector experts emphasize that the private sector needs to increase production in order to close this gap, but that land costs need to be reduced for this to happen.
One of the biggest cost items in the sector is land prices. Today, the land cost in a construction project exceeds 50% of the total construction costs. This situation leads to an increase in housing prices and makes it difficult to implement new projects. Experts state that reducing land costs can directly affect housing prices.
As a solution to this problem in the housing sector, it is suggested that the state allocate affordable land. Sector representatives state that the state’s allocation of treasury lands to reliable and sustainable companies can increase housing production and help reduce prices. In this way, both the housing supply will increase and it will be easier for low and middle-income citizens to own a house.
The construction sector is considered one of the locomotive sectors of the economy. However, the stagnation in the construction sector negatively affects not only housing production but also industrial sectors such as glass, aluminum, and iron. Supporting the sector will both increase employment and contribute to general economic growth.
Sector representatives state that if land costs are reduced from 50% to 15-20%, current housing prices can drop significantly. For example, a house currently sold for 8 million TL can drop to 4 million TL with the reduction of land costs.
It is also stated that in order to overcome this crisis in the housing sector, local governments should open new development areas and facilitate land allocation processes. In addition, construction costs can be reduced with innovative solutions such as digitalization and modular construction technologies.
Sector representatives state that the state and the private sector must collaborate to produce permanent solutions to this problem. Land allocation and the opening of new zoning areas will increase housing production and stability will be achieved in housing prices. In addition, the implementation of sustainable projects can provide long-term solutions by maintaining the balance in the sector.
The increase in costs and housing prices in the housing sector has become a significant problem affecting not only home buyers but also the entire economy. The rapid and effective steps taken by the state and private sector in this regard offer a great opportunity to ensure balance in the sector.
