Construction sector unions GYODER (Real Estate and Real Estate Investment Partnership Association) and INDER (Istanbul Constructors’ Association) have requested their members to inform the unions regarding the housing stocks at hand until November 7, Bloomberg HT reported.
In the informative letter sent to the members of the unions, it was stated that Emlak Konut GYO, which was appointed by Ministry of Treasury and Finance and Union of Banks General Directory, is planning to provide subsidies to sector companies with deteriorated profit/loss equilibrium, with problems with banks due to non-performing loans or companies that have declared concordat.
CONTENT OF THE SUBSIDY PACKAGE
Sector companies with deteriorated profit/loss equilibrium, with problems with banks due to non-performing loans or companies that have declared concordat and sector companies that want to reduce their loan debts may benefit the program priory.
The priority for benefitting the program is given to companies with a high level of middle segment housing stock with occupancy permits. Companies may apply to the program with office and workplaces with a secondary list for these real estates.
Emlak Konut GYO’s experts will evaluate these real estates and purchase them at a discounted amount upon mutual consent. 70 percent of the purchase amount will be utilized in paying bank loans of the companies and the remaining 30 percent will be transferred to the companies for their use.
The companies participating in this program will be supported in negotiations with private banks.
THE FALLEN STAR OF THE AKP YEARS
The real estate sector was the star of the ruling AKP party economic policies for the last 15 years. Real estate and construction sector was the powerhouse of economic growth due to policies followed by the AKP government during the economic boom period. This policy was mainly criticized because the construction sector deteriorated current account deficit and created a temporary increase in growth.
With the significant rise in the foreign currencies against the Turkish lira, many real estate companies, which depend on foreign currency loans to operate, found themselves in a dire economic situation. The rising costs of the foreign input materials and the decline in demand to real estate due to the crisis and the increasing loan interest rates put many of the pioneer construction companies in a tough situation.
The Ministry of Treasury and Finance plans to adopt a plan which will save the real estate companies while decreasing the debt amount of banks with taxpayers money. This is a typical reallocation of funds from the toiling masses to the capitalists, which Turkish people witnessed countless times during crisis. The AKP Government recently transferred funds from the unemployment fund to the public banks in order to improve the third quarter balance sheets.