In May 2018, CEOs of forty-one prominent construction companies announced that they would apply a 20% discount in estate prices; however, it seems that it did not work.
The VAT was decreased from 18% to 8%, and deed duty was decreased from 5% to 4%; however, it did not stimulate the sector.
They put pressure on public banks and forced them to give housing loans with an interest rate under 1%, which could only correspond to a psychological threshold. Then their balance sheets turned upside-down. They were about to bankrupt when they gave up this idea. They are still secretly and illegally channeling unemployment funds to ameliorate the situation. We indeed do not know what else they are doing since such channels are transferred to the Wealth Fund (Varlık Fonu).
Turkey's state-owned Ziraat Bank announced a new campaign, which sought to present a decrease in housing loan interest rates even though such a decrease would not take place. Accordingly, Ziraat Bank declared that it would continue to provide housing loans with an interest rate of 12.5%. The campaign underlined that:
‘Customers working with [Ziraat] bank are provided with housing loans with a monthly interest rate of 0.98% for up to 120 months. The yearly rate of the cost of a house with a price of 500,000 TL then would become 12.5844%’.
"This is such a witty project. Let’s assume that one of the banks said it would not lose money by providing housing loans with a monthly interest rate of 1.78%. Ones who want to buy and ones who want to sell would agree and come to the bank. The bank would provide housing loans with an interest rate of 0.98%, and the rest would be paid by the seller. They think nobody knows how to calculate. The difference between the two interest rates is double. Ones who come up with such a campaign either do not know how to calculate or think everybody else is stupid," Kadir Sev wrote.
On June 17, Ziraat Bank announced that it would provide inflation-linked housing loans, meaning that they could not benefit from the previous witty project.
According to Sev, "the new project seems more realistic since it would be based on market interest rates. It also underlines that ‘the housing loan would be based on consumer prices + 0.19% (monthly) for up to 120 months with the possibility of 6 or 12-month update".
"By May 2019, consumer price has increased 0.95% per month and 19.91% per year. If we add 0.19% to this rate, we end up with 25% interest rates. There is nothing attractive about this but it is rather a scam", adds the expert.
Both bankers and constructors underline that deposits are short-term, and hence do not satisfy the conditions for housing loans, therefore a long-term solution is needed. Sev, on the other hand, warns that once a long-term solution is mentioned, one might think of unemployment funds, individual pension scheme, and foreseen severance pay fund which can be allocated by the government to save the private sector.
