Economy
Developers gearing up for new housing projects amid strong demand
ISTANBUL
Encouraged by strong sales figures and a decline in home prices in real terms, construction companies are preparing to launch new housing projects.
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Potential homebuyers had been in a wait-and-see mode until the second half of last year but unleashed the pent-up demand, which helped the housing market bounce back.
Last year, nearly 1.5 million homes changed hands in Türkiye, marking a 21 percent increase compared to 2023.
Since July, the housing market has seen double-digit growth rates in home sales. For example, the housing market expanded by 53 percent in December, 64 percent in November and 76 percent in October annually. In January this year, home sales surged almost 40 percent year-on-year to 112,173 units.
A recent survey jointly conducted by the Housing Developers and Investors Association (KONUTDER) and Nielsen IQ Türkiye confirmed consumers’ growing appetite for homes.
The report also found that developers are planning to launch new housing projects in the coming months.
Some 81 percent of KONUTDER member companies said they have new projects to launch within the next six months. More than 71 percent of them think new home sales will increase in the next six months.
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Over 90 percent of participants of the survey expected interest rates on housing loans to decline after the Central Bank started the easing cycle in December. However, despite the anticipated decline in interest rates, construction companies do not expect a significant increase in the number of people taking out housing loans.
Last year, mortgaged home sales declined by 10.8 percent to 158,486 units, accounting for 10.7 percent of all sales in the housing market. In January this year, however, mortgaged home sales soared 183 percent annually to 16,726 which made up nearly 15 percent of all home sales.
The survey found that a little over 76 percent of companies expect home prices to start to increase in the first half of 2025, while only 23.8 percent think prices will be unchanged.
Türkiye’s antitrust authority announced on Friday that it had launched an investigation into Google’s AI-powered ad campaign product, Performance Max (PMAX), to assess whether it breaches the country’s competition laws.
In a statement, the Competition Authority (RK) said the probe will examine whether Google has engaged in unfair practices against advertisers and if it has hindered competition through data consolidation with PMAX.
“The subject of the investigation is the claims that Google violated article 6 of the Act no 4054 by transferring its power in online search advertising services to other online advertising services via Performance Max (PMAX) campaign, which is a type of campaign in Google Ads, by engaging in exploitative practices against advertisers who use PMAX campaign and by distorting competition in the market through combining the data coming from different channels,” the authority said.
Launched in 2021, Performance Max uses AI and automatically finds the best placements for a brand’s ads across Google services, including email, search and YouTube.
“Unlike other campaigns offered by Google, PMAX identifies the ad inventory that will maximize conversions in real-time and automatically optimizes ad delivery process thanks to its AI features,” the board said.
Türkiye recorded the fastest increase in the number of U.S. dollar millionaires last year, growing at a pace seven times higher than the global average, according to a report.
The number of dollar millionaires worldwide rose by 684,000 in 2024, a 1.2% year-over-year increase, the 2025 Global Wealth Report by UBS found.
That translates to nearly 2,000 new dollar millionaires every day across the globe.
Türkiye saw an 8.4% increase as the number of individuals with assets exceeding $1 million rose by 7,000, reaching nearly 68,000, the report among 56 countries showed.
The United Arab Emirates (UAE) ranked second with a rise of 5.8% in millionaire numbers, or 13,000 new entrants.
While nominal per capita wealth increased by over 35% in Türkiye, when adjusted for inflation, real per capita wealth declined by 14.6%, the report said.
Inflation has more than halved compared to the peak of about 75% a year ago amid aggressive monetary tightening as part of the Turkish authorities’ efforts to rein in growth in prices.
The country also saw the median wealth drop by almost 21%, highlighting a growing divide between the wealthy elite and the rest of the population.
Private individuals’ net worth rose 4.6% worldwide in 2024, the Swiss bank said. The United States accounted for almost 40% of global millionaires.
Over 379,000 people became new dollar millionaires in the U.S. last year, more than 1,000 a day, as wealth grew disproportionately quickly.
In 2023, Europe, the Middle East and Africa led a rebound in global wealth after a decline in 2022.
Greater China, which the report defined as mainland China, Hong Kong and Taiwan, led last year for individuals with a net worth of $100,000 to $1 million, accounting for 28.2%, followed by Western Europe with 25.4% and North America with 20.9%.
The majority of people worldwide were below that threshold, however, with over 80% of adults in the UBS sample having a net worth of under $100,000. Overall, about 1.6% registered a net worth of $1 million or more, the report said.
Over the next five years, the Swiss bank projects average wealth per adult to grow further, led by the U.S., and, to a lesser extent, Greater China.
The Turkish Treasury and Finance Ministry has signed a new financing agreement worth $740 million with the Islamic Development Bank (IsDB) to support critical infrastructure investments in public health and education.
The deal will channel long-term, cost-effective funding toward the reinforcement of public hospitals in Istanbul and the development of disaster-resilient educational facilities in Türkiye’s earthquake-affected regions, Anadolu Agency (AA) reported on Friday.
The financing package includes 500 million euros (over $575 million) for the Istanbul Project Coordination Unit to support the reconstruction and strengthening of public hospitals in the city.
An additional $165 million will be allocated to the Ministry of National Education for inclusive and disaster-resilient school infrastructure in the southeastern region that was struck by a devastating earthquake more than two years ago.
“The fact that the financing provided through these agreements is long-term and more favorable compared to market conditions clearly reflects the confidence international financial institutions have in Türkiye’s economy and our program,” Treasury and Finance Minister Mehmet Şimşek said.
Şimşek stressed continued efforts to secure favorable and long-term external financing across various sectors as part of the country’s sustainable development perspective.
“The agreement signed with the Islamic Development Bank will significantly contribute to the strengthening of public hospitals in Istanbul and educational institutions in earthquake-affected regions,” the minister said.
The deal with IsDB brings the amount of public sector external financing Türkiye has secured since the beginning of this year to nearly $3 billion.
As part of earthquake-related financing, the total funding provided to the public sector by international institutions has reached approximately $6.5 billion, according to official data.
Moreover, the IsDB is expected to soon provide an additional 200 million euros in financing to Iller Bank (ILBANK), with 150 million euros designated for post-earthquake urban reconstruction and 50 million euros for urban transport projects, the AA said.
Russian officials engaged in a public dispute on Friday over strategies to stimulate the economy, amid a slowdown more than three years into the country’s military campaign in Ukraine.
Moscow had shown unexpected economic resilience in 2023 and 2024, despite the West’s sweeping sanctions after the Kremlin sent troops into Ukraine in February 2022, with massive state spending on the military powering a robust expansion.
High defense spending has propelled growth and kept unemployment low despite fueling inflation. At the same time, wages have gone up to keep pace with inflation, leaving many workers better off.
But economists have long warned that heavy public investment in the defense industry is no longer enough to keep Russia’s economy growing.
Businesses and some government figures have urged the central bank to further cut interest rates to stimulate activity.
“The indicators show the need to reduce rates,” Deputy Prime Minister Alexander Novak said at the St. Petersburg International Economic Forum, Russia’s flagship economic forum in the country’s second-largest city.
“We must move from a controlled cooling to a warming of the economy,” said Novak, who oversees Russia’s key energy portfolio in the government.
He described the current economic situation facing the country as “painful.”
The call for more cuts to borrowing costs comes a day after Moscow’s economy minister warned the country was “on the verge of a recession.”
“A simple and quick cut in the key rate is unlikely to change anything much at the moment, except for… an increase in the price level,” the central bank’s monetary policy department chief Andrey Gangan said.
The central bank lowered interest rates from a two-decade high earlier this month, its first cut since September 2022.
The bank, which reduced the rate from 21% to 20%, said at the time that Russia’s rapid inflation was starting to come under control but monetary policy would “remain tight for a long period.”
The central bank has resisted pressure for further cuts, pointing to inflation of around 10%, more than double its 4% target.
Russia’s gross domestic product (GDP) growth slowed to 1.4% year-over-year in the first quarter, the lowest quarterly figure in two years.
Russian President Vladimir Putin, who has typically been content to let his officials argue publicly over some areas of economic policy, is set to speak on Friday afternoon at the plenary session of the economic forum.
On brink of recession
Large recruiting bonuses for military enlistees and death benefits for those killed in Ukraine have put more income into the country’s poorer regions. But over the long term, inflation and a lack of foreign investments remain threats to the economy, leaving a question mark over how long the militarized economy can keep going.
Economy Minister Maxim Reshetnikov on Thursday warned Russia’s economy is on the verge and whether the country would slide into a recession or not depends on monetary policy decisions.
“The numbers indicate cooling, but all our numbers are (like) a rearview mirror. Judging by the way businesses currently feel and the indicators, we are already, it seems to me, on the brink of going into a recession,” Reshetnikov said.
Economists have warned of mounting pressure on the economy and the likelihood it would stagnate due to lack of investment in sectors other than the military.
“Going forward, it all depends on our decisions,” Reshetnikov told a forum session, according to Russian business news outlet RBC.
In addition to keeping faith in Russia’s 4% inflation target, Reshetnikov said he was in favor of “giving the economy some love,” addressing Central Bank Governor Elvira Nabiullina, who was on the same panel.
At Thursday’s session, Nabiullina and Russia’s Finance Minister Anton Siluanov gave more optimistic assessments.
Nabiullina said the current slowdown in GDP growth was “a way out of overheating.”
Siluanov spoke about the economy “cooling” but noted that after any cooling “the summer always comes.”
Nine European Union member states have urged the European Commission to propose measures to end EU trade with Israeli settlements in the occupied Palestinian territories, a report said Thursday.
The call was made by Belgium, Finland, Ireland, Luxembourg, Poland, Portugal, Slovenia, Spain and Sweden, according to a letter signed by the countries’ foreign ministers and addressed to EU foreign policy chief Kaja Kallas, Reuters said.
The EU is Israel’s biggest trading partner, accounting for about a third of its total goods trade. Two-way goods trade between the bloc and Israel stood at 42.6 billion euros ($48.91 billion) last year, though it was unclear how much of that trade involved settlements.
The ministers pointed to a July 2024 advisory opinion from the International Court of Justice (ICJ), which said Israel’s occupation of Palestinian territories and settlements there is illegal. It said states should take steps to prevent trade or investment relations that help maintain the situation.
“We have not seen a proposal to initiate discussions on how to effectively discontinue trade of goods and services with the illegal settlements,” the ministers wrote.
“We need the European Commission to develop proposals for concrete measures to ensure compliance by the Union with the obligations identified by the Court,” they added.
Belgian Foreign Minister Maxime Prevot said Europe must ensure trade policy is in line with international law. “Trade cannot be disconnected from our legal and moral responsibilities,” the minister said in a statement to Reuters.
“This is about ensuring that EU policies do not contribute, directly or indirectly, to the perpetuation of an illegal situation,” he said.
The ministers’ letter comes ahead of a meeting in Brussels on June 23, where EU foreign ministers are set to discuss the bloc’s relationship with Israel.
Ministers are expected to receive an assessment on whether Israel is complying with a human rights clause in a pact governing its political and economic ties with Europe, after the bloc decided to review Israel’s adherence to the agreement due to the situation in Gaza.
Israel’s genocidal war has devastated the Palestinian enclave, displacing nearly all its residents and killing more than 55,000 people, mostly women and children, according to local health authorities.
Hitachi Energy will invest $70 million in Türkiye to expand its transformers manufacturing capacity, the Swiss-based supplier of power technology and electrification announced on Thursday.
The investment will be directed toward its plant in Dilovası district of northwestern Kocaeli province, where production capacity is expected to increase by 70%, the company said in a statement.
The expansion is also projected to boost the company’s workforce in Türkiye by 30%, the statement said. The company currently employs more than 1,100 people in Türkiye, according to its website.
Hitachi Energy said demand for electricity in Türkiye, as well as throughout both Europe and Asia, is growing “exponentially” and suggested that the industry and energy infrastructure “simply can’t keep up.”
“Recent geopolitical volatility has exacerbated supply chain disruption and poses additional concerns from an energy security, accessibility, and volatility standpoint,” it noted.
The power transformers facility, one of Hitachi Energy’s major production hubs, will undergo a significant upgrade with the construction of an additional 45,000 square meters of operational space.
The project is scheduled for completion by 2026, the company said.
“The move to the Organized Industrial Zone in Dilovası offers significant advantages, including ease of transportation of transformers due to its proximity to the commercial port,” said Yasemin Hoşder Öztekin, country managing director at Hitachi Energy.
“This investment underscores our commitment to supporting the energy transition and meeting the decarbonization needs of our customers.”
As part of the investment, employees from the Kartal factory in Istanbul will transition to Dilovası, the company said. Hitachi Energy currently has four factories in Türkiye.
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