Financing solutions needed for residential construction

In the report, it was pointed out that Turkish contractors undertook 132 new projects worth 4.6 billion dollars abroad in the January-June 2022 period, emphasizing the need to be more active in existing markets and to accelerate the search for new markets. In the report, it was stated that the United Arab Emirates (UAE) and Saudi Arabian markets, where the sector's experience is high, came to the fore with the latest developments in foreign policy.

Russia rose to record highs

In the report, it was stated that in Russia, where a record level of 11 billion dollars of new projects were undertaken last year, the ongoing projects amounted to 20 billion dollars. The report underlined that the uncertainties caused by the war caused the sector to enter a waiting period in the leading market, and it was pointed out that 4 new projects with a total amount of 396 million dollars were undertaken in Russia in the 6 months of this year, according to the data of the Ministry of Commerce.

Input costs put pressure

In the report, it was stated that the activities in the construction sector came to a halt again due to the decrease in investments and the problem of increasing input costs, and it was emphasized that cost increases continued to put upward pressure on housing prices. The report noted:

“In order to return to growth in the sector, there is a need for a revival in construction investments and a solution to the problem created by the unpredictable increase in input costs. In particular, there is a need for public investment programs to be guiding in this context. In this context, it is beneficial to prioritize the public investment program and to prefer projects that will create economic and social added value.”

Land costs should be reduced

In the report, which noted that the withholding tax and value-added tax withholding rates were at least reduced to their previous levels, the following statements were included: “With the weighted effect of the high cost increases experienced, a cautious even regression is observed in new housing production with the increase in housing prices. In market conditions where imbalances are observed with the weighted effect of the transition from an extraordinary period, it becomes increasingly difficult for the middle and low-income groups to own a house. Solutions are needed that can finance construction manufacturing. In this respect, the efforts of the Ministry of Environment, Urbanization and Climate Change to reduce land costs, which have a high share in housing prices, are of great importance.”