Economy
Türkiye’s housing market sees lowest price increase in year
Türkiye’s housing market recorded its weakest monthly price increase in a year in July, according to data on Monday that signaled a continued slowdown in real terms despite nominal gains.
The Residential Property Price Index (RPPI) rose by 0.9% compared to June, the Central Bank of the Republic of Türkiye (CBRT) said. This marks the lowest monthly increase since July last year.
The index, which measures quality-adjusted price changes of dwellings, recorded an annual increase of 32.8% in nominal terms, yet inflation-adjusted figures revealed a 0.5% decline.
The data marked the 18th consecutive month of decline in prices in real terms.
Türkiye’s largest and most populous city, Istanbul, saw a modest monthly increase of 0.6%, while the capital Ankara posted a stronger 1.2% rise. In contrast, the country’s third largest city, Izmir, experienced a 1% monthly decline.
Year-over-year, Ankara led the three major cities with a 42.9% nominal increase, followed by Istanbul at 33.5% and Izmir at 31.0%.
The lowest annual increase was observed in Antalya, Burdur and Isparta region with 19.6%.
The data came days after the country’s statistical authority said the market recorded its strongest month of the year in July, as demand remains strong despite high borrowing costs.
House sales grew 12.4% year-over-year last month to 142,858 units, marking the second-highest July figure ever.
The figure extended the upward trend that began a year ago and signaled the resilience of the housing market despite tight monetary conditions and inflationary pressures.
Monthly sales had ranged between 107,000 and 130,000 units in the first half of the year. Last month’s performance was second only to the pandemic-driven boom in July 2020, when a low-interest loan campaign pushed sales to a record 229,357 units.
The data showed mortgaged sales leaped 60.3% on an annual basis in July and accounted for 14.9% of the total figure. New home sales climbed 7.8% year-over-year, while secondhand sales jumped 14.6%.
Last month, the central bank cut its key policy rate by 300 basis points to 43% as it relaunched an easing cycle that was disrupted by political turmoil earlier this year, as markets calmed and disinflation continued.
The bank had hiked the one-week repo rate to 46% from 42.5% in April and lifted its overnight lending rates to 49 % following market volatility over the arrest in March of Istanbul Mayor Ekrem Imamoğlu.
Imamoğlu was jailed pending trial over graft charges.
Before April, the CBRT had gradually cut its key policy rate from December as inflation eased.
Latest official data showed inflation slowed to 33.5% in July, the lowest rate since November 2021, having peaked at 75% in May last year.
From January through July, overall sales reached 834,751 units, the second-highest seven-month total ever and a 24.2% increase from a year ago.
The peak was recorded in 2020 when 854,126 units were sold in the first seven months.
Mortgaged sales almost doubled during this January-July period, rising 93.2%.
Industry representatives say this year’s sales are expected to surpass 1.5 million units, highlighting persistent demand fueled by high rents and the fact that housing price increases currently remain below inflation.
In the whole of 2024, sales grew by 20.6% to about 1.48 million units, returning to levels last seen in 2022.
U.S. President Donald Trump has purchased over $100 million worth of corporate, state and municipal bonds since taking office in January, according to disclosures released this week.
The forms, posted online on Tuesday, show the billionaire Republican president made more than 600 financial purchases since Jan. 21, the day after he was inaugurated for his second term in the White House.
The Aug. 12 filing from the U.S. Office of Government Ethics does not list exact amounts for each purchase, only giving a broad range.
They include corporate bonds from Citigroup, Morgan Stanley, and Wells Fargo, as well as Meta, Qualcomm, The Home Depot, T-Mobile USA and UnitedHealth Group.
Other debt purchases include various bonds issued by cities, states, counties and school districts as well as gas districts, and other issuers.
The holdings cover areas that could benefit from U.S. policy shifts under his administration.
Trump, a businessman-turned-politician, has said he has put his companies into a trust managed by his children. His annual disclosure form filed in June showed his income from various sources still ultimately accrues to the president – something that has opened him to accusations of conflicts of interest.
U.S. President Donald Trump has purchased over $100 million worth of corporate, state and municipal bonds since taking office in January, according to disclosures released this week.
The forms, posted online on Tuesday, show the billionaire Republican president made more than 600 financial purchases since Jan. 21, the day after he was inaugurated for his second term in the White House.
The Aug. 12 filing from the U.S. Office of Government Ethics does not list exact amounts for each purchase, only giving a broad range.
They include corporate bonds from Citigroup, Morgan Stanley, and Wells Fargo, as well as Meta, Qualcomm, The Home Depot, T-Mobile USA and UnitedHealth Group.
Other debt purchases include various bonds issued by cities, states, counties and school districts as well as gas districts, and other issuers.
The holdings cover areas that could benefit from U.S. policy shifts under his administration.
Trump, a businessman-turned-politician, has said he has put his companies into a trust managed by his children. His annual disclosure form filed in June showed his income from various sources still ultimately accrues to the president – something that has opened him to accusations of conflicts of interest.
U.S. President Donald Trump again attacked Federal Reserve (Fed) Chair Jerome Powell on Tuesday, saying he is “hurting” the housing industry “very badly” and repeated his call for a big cut to U.S. interest rates.
“Could somebody please inform Jerome ‘Too Late’ Powell that he is hurting the Housing Industry, very badly? People can’t get a Mortgage because of him. There is no Inflation, and every sign is pointing to a major Rate Cut,” Trump wrote on Truth Social.
Inflation is well off the highs seen during the pandemic, but some recent data has given a mixed picture and inflation continues to track above the Fed’s 2% target range.
Trump’s latest salvo against Powell comes ahead of the Fed chair’s Friday speech at the annual Jackson Hole central banking symposium, where investors will cleave to his every word for hints on his economic outlook and the likelihood of a coming reduction to short-term borrowing costs.
The Fed’s next policy meeting will be held on Sept. 16-17.
Investors and economists are betting the Fed will cut rates by a quarter of a percentage point next month, with perhaps another reduction of similar size to come later in the year, far less than the several percentage points that Trump has called for.
Trump’s Treasury Secretary Scott Bessent has promoted the idea of a half-point rate cut in September.
The U.S. central bank cut its policy rate half a percentage point last September, just before the presidential election, and trimmed it another half of a percentage point in the two months immediately following Trump’s electoral victory, but has held it steady in the 4.25%-4.50% range for all of this year.
Fed policymakers have worried that Trump’s tariffs could reignite inflation and also felt the labor market was strong enough not to require a boost from lower borrowing costs.
Mixed inflation picture
Consumer price inflation in the U.S. rose 0.2% in July, with the 12-month rate at 2.7%, unchanged from June.
Core inflation, which strips out the volatile food and energy components, increased 3.1% year-over-year in July. Based in part on that data, economists estimated the core Personal Consumption Expenditures Price Index rose 0.3% in July. That would raise the year-over-year increase to 3%. The PCE is a key measure tracked by the Fed against its own 2% inflation target.
And despite a moderate rise in overall consumer prices in July, producer and import prices jumped, a suggestion that higher consumer prices could be coming as sellers pass higher costs onto households. The inflation picture comes amid a picture of a possible cooling in the labor market, with declines in monthly job gains, although the unemployment rate, at 4.2%, remains low by historical standards.
Trump’s online attacks on the Fed and Powell more typically focus on the cost that higher interest rates mean for U.S. government borrowing. High mortgage rates are a key pain point for potential homebuyers who are also facing high and rising home prices due to a dearth of housing supply.
Mortgage rates can be loosely tied to the Fed’s overnight benchmark rate but more closely track the yield on the 10-year Treasury note, which typically rises and falls based on investors’ expectations for economic growth and inflation. A Fed rate cut does not always mean lower long-term rates – indeed after the Fed cut rates last September, mortgage rates, which had been on the decline – rose sharply.
In recent weeks, the most popular rate – the 30-year fixed mortgage rate – has drifted downward but, at around 6.7% most recently, is still much higher than it had been before inflation took off after the pandemic shock and the Fed began its rate-hike campaign in 2022.
Inflation in the United Kingdom rose more than expected to its highest in 18 months in July, driven by higher food and airfare costs, official figures showed on Wednesday, once again leaving the country with the fastest rate of price increases among the world’s largest economies.
The Office for National Statistics (ONS) said consumer price inflation was 3.8% in the year to July, up from 3.6% in June, tempering market expectations that the Bank of England (BoE) will cut interest rates again this year.
Most economists had anticipated a more modest rise in inflation to 3.7%.
With inflation now at its highest rate since January 2024 and nearly double the Bank of England’s target of 2%, the prospects of another rate cut in 2025 are diminishing.
Inflation in Britain’s services sector – which is watched closely by the Bank of England – accelerated to 5% from 4.7% a month earlier.
The BoE expected headline inflation to rise to 3.8% in July but had forecast a smaller 4.9% rise in services prices.
The latest increase is another blow to the Labour government, which was partly propelled into power last July because of the cost-of-living crisis, which saw inflation rise to over 11% at one time.
Treasury chief Rachel Reeves acknowledged there was “more to do to ease” the cost-of-living.
Rate cut hope ‘extinguishes’
The central bank cut its main interest rate by a quarter of a percentage point to 4% earlier this month, but only after a narrow 5-4 vote by policymakers and it suggested it would slow the already gradual pace of lowering borrowing costs due to inflation’s persistence.
That marked its fifth reduction in a year, when policy makers began lowering borrowing costs from a 16-year high of 5.25%. The Bank of England’s key rate, a benchmark for mortgages as well as consumer and business loans, is now at the lowest level since March 2023.
Sterling rose slightly after the data was published and investors expected a longer wait before the next rate cut.
“July’s outturn probably extinguishes hope of a September interest rate cut, while strengthening underlying inflationary pressures calls into question whether policymakers will be able to relax policy again this year,” said Suren Thiru, economics director at the chartered accountants institute ICAEW.
A quarter-point cut is not fully priced in until March 2026. Earlier this month, the next rate cut was viewed as highly likely before the end of 2025.
“The economy is experiencing a bout of high inflation and weak growth that will likely remain until next spring,” said Deloitte Chief Economist Ian Stewart. He said it was unclear whether the BoE would cut rates again in 2025.
The BoE thinks British inflation will hit 4% in September, double its target, and stay above 2% until mid-2027.
Inflation the United States held at 2.7% in July and in the eurozone, it is expected to remain around the European Central Bank’s (ECB) 2% target over the coming years.
Some of the difference reflects how energy and other utility prices are regulated in Britain. Big increases in utility bills in April have boosted year-over-year inflation comparisons.
Britain’s relatively tight labor market, which economists say has become more rigid since Brexit, is also putting upward pressure on prices. Wage growth in Britain has slowed but at about 5% it is too high for the BoE to feel comfortable about inflation returning rapidly to 2%.
Furthermore, employers say that a tax increase imposed on them in April by Treasury chief Rachel Reeves and a big jump in the minimum wage are forcing them to put up prices.
Higher airfares
Wednesday’s data showed the biggest contributor to July’s rise in inflation came from transport costs, particularly airfares – a component that BoE policymakers sometimes disregard because of its volatility.
Airfares soared by 30.2% between June and July, the biggest jump since the collection of monthly data began in 2001.
Electricity prices, petrol, soft drinks and hotel rooms also pushed up the annual rate of inflation between June and July.
The ONS said it saw no evidence that a tour by rock band Oasis pushed up hotel costs. Previous tours by performers such as Taylor Swift nudged up inflation, some economists have said.
Food and non-alcoholic drink prices – big influences on how the public thinks about inflation – were 4.9% higher than a year earlier, the biggest rise since February 2024. The BoE forecasts food inflation will peak at 5.5% at the end of the year.
ONS data last week painted a picture of an economy with enough momentum to keep inflation high. Output grew by more than expected in the second quarter and the labor market, while still losing jobs, showed signs of stabilization.
Data published earlier on Wednesday showed basic pay settlements by British private-sector employers held at 3% in the three months to July for the eighth monthly report in a row by data firm Brightmine.
The ONS, which has received criticism for problems with its data, said it had identified a “minor error” in the imputation of missing data for seasonal items but it had no impact on headline CPI.
The United States on Tuesday said it was hiking steel and aluminum tariffs on more than 400 products including wind turbines, mobile cranes, appliances, bulldozers and other heavy equipment, along with railcars, motorcycles, marine engines, furniture and hundreds of other products.
The Commerce Department said 407 product categories are being added to the list of “derivative” steel and aluminum products covered by sectoral tariffs, with a 50% tariff on any steel and aluminum content of these products plus the country rate on the non-steel and non-aluminum content.
Evercore ISI said in a research note the move covers more than 400 product codes representing over $200 billion in imports last year and estimates it will raise the overall effective tariff rate by around 1 percentage point.
The Commerce Department is also adding imported parts for automotive exhaust systems and electrical steel needed for electric vehicles to the new tariffs as well as components for buses, air conditioners as well as appliances including refrigerators, freezers and dryers.
A group of foreign automakers had urged the department not to add the parts, saying the U.S. does not have the domestic capacity to handle current demand.
Tesla unsuccessfully asked Commerce Department to reject a request to add steel products used in electric vehicle motors and wind turbines, saying there was no available U.S. capacity to produce steel for use in the drive unit of EVs.
The new tariffs take effect immediately and also cover compressors and pumps and the metal in imported cosmetics and other personal care packaging like aerosol cans.
“Today’s action expands the reach of the steel and aluminum tariffs and shuts down avenues for circumvention – supporting the continued revitalization of the American steel and aluminum industries,” said Under Secretary of Commerce for Industry and Security Jeffrey Kessler.
Steelmakers including Cleveland Cliffs, Nucor and others had petitioned the administration to expand the tariffs to include additional steel and aluminum auto parts.
Since returning to the presidency, President Donald Trump has imposed a 10% tariff on almost all U.S. trading partners, alongside varying steeper levels on dozens of economies such as the European Union and Japan.
Certain sectors have been spared from these countrywide tariff levels but instead were targeted under different authorities by even higher duties.
In the case of steel and aluminum, Trump initially unveiled a 25% tariff on imports of both metals before doubling this to 50% in June.
Though the impact of Trump’s tariffs on consumer prices has been limited so far, economists warn that their full effects are yet to be seen.
For now, some businesses have coped by bringing forward purchases of products they expected will encounter tariffs. Others have passed on additional costs to their consumers, or absorbed a part of the fresh tariff burden.
But analysts note that importers and retailers will unlikely be able to eat these costs indefinitely, and could eventually raise more consumer prices.
Some economists argue that the inflation hit will be one-off, but others are wary of more persistent effects.
The latest Commerce Department additions came after a window for the public to submit product inclusion requests.
Spotify will establish a local office in Türkiye in 2026, Culture and Tourism Minister Mehmet Nuri Ersoy announced on Tuesday, a development that follows a formal investigation and mounting criticism from artists over the company’s chart compilation practices.
The office will address “an important deficiency” and strengthen collaboration between the music streaming giant and Turkish artists, Ersoy said on social media platform X.
The announcement came after Ersoy met with Spotify representatives in Ankara. He said concrete progress would soon be made to ensure Türkiye’s music ecosystem receives the support it deserves from Spotify.
The company has faced backlash from Turkish artists over what they describe as a lack of transparency in how its charts are compiled. Spotify has also been accused of censorship and preferential treatment.
Reports had also suggested Spotify launched an internal investigation into its editors in Türkiye following allegations of bribery linked to local charts, though the company later denied this.
Last month, the Turkish Competition Authority (RK) launched an investigation into “various allegations that the strategies and policies implemented by Spotify” in Türkiye have caused anti-competitive effects in the music industry.
The regulator said the probe would examine whether the Swedish company gave more visibility to some artists and engaged in unfair practices in the distribution of royalties, thereby violating competition law.
The company said its operations complied with “all applicable laws” but would cooperate with the investigation.
“Spotify will establish its office in Istanbul in 2026, deepening collaborations in this field,” said Ersoy. “We will sit down with company representatives and our music industry stakeholders to explore joint initiatives.”
The minister noted that Turkish artists achieved global success in 2024, reaching 2.8 billion new listeners and breaking records on international charts.
“Today, more than half of royalty revenues come from audiences outside Türkiye. This strong partnership will also support young talents and female artists, giving new momentum to our cultural diplomacy,” he added.
“We will continue working closely with the Spotify team on this and similar efforts to promote Türkiye’s rich musical heritage and culture worldwide.”
Spotify, which launched in Türkiye in 2013, says it paid over TL 2 billion (nearly $50 million) to the local music industry in 2024, calling its service “pivotal in growing Turkish artists’ royalties globally.”
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