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.
International efforts to restart energy transits through the Strait of Hormuz intensified Thursday after U.S. President Trump warned of “extremely hard” upcoming strikes on Iran, sending oil prices higher for a public already feeling the strain.
In a speech Wednesday night, Trump said operations would be intensified and gave no timeline for ending hostilities, drawing threats of retaliation from Tehran and depressing share prices.
“We’re going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Ages where they belong,” Trump said in the speech amid mounting domestic pressure to end the conflict.
Britain chaired a virtual meeting Thursday of some 40 countries to explore ways to restore freedom of navigation. The meeting did not produce a specific agreement, although participants agreed all nations should be able to use the waterway freely, an official said.
Trump persisted with his threats Thursday, saying in a social media post: “IT IS TIME FOR IRAN TO MAKE A DEAL BEFORE IT IS TOO LATE.” He also posted footage of what appeared to be strikes on a bridge in Iran.
Iran has effectively shut down the Strait of Hormuz, which normally carries about a fifth of the world’s total oil consumption, in retaliation for U.S.-Israeli strikes that began Feb. 28. The war has caused a spike in oil prices, inflation concerns, supply chain problems and worries about the impact on the global economy.
Still defiant despite the death of several of its leaders, Tehran offered a competing vision for future control of the strait and said it was drafting a protocol with Oman that would require ships to obtain permits and licenses.
“These requirements will not mean restrictions, but rather to facilitate and ensure safe passage and provide better services to ships that pass through this route,” Deputy Foreign Minister Kazem Gharibabadi said, according to the official IRNA news agency.
An Iranian military spokesperson said Thursday the strait would remain closed “long term” to the U.S. and Israel.
The European Union’s foreign policy chief, Kaja Kallas, pushed back against Tehran’s plan, saying Iran cannot be allowed to charge countries a bounty to let ships pass. “International law doesn’t recognize pay-to-pass schemes,” Kallas wrote on X.
Oil hits $108
Benchmark Brent crude prices jumped by about 7% to around $108 per barrel, U.S. bond yields spiked and global equity markets gave back gains.
“The key question in all investors’ minds is ‘When is this going to be over?'” said Russel Chesler, head of investments and capital markets at VanEck Australia.
Trump warned that the war could escalate if Iran did not give in to Washington’s terms, with strikes on its energy and oil infrastructure possible. He told countries that rely on fuel shipments through the Strait of Hormuz to “just grab it.”
However, European and other states have said they will only help secure the strait if there is a ceasefire.
“It can only be done in consultation with Iran,” French President Emmanuel Macron said.
Iran threatens more attacks
Iran’s armed forces responded to Trump with a warning of “more crushing, broader and more destructive” attacks.
The war will continue until the “permanent regret and surrender” of Iran’s enemies, said Ebrahim Zolfaqari, spokesperson for the Iranian military’s Khatam al-Anbiya central headquarters, in a statement carried by Iranian media.
Iran’s Fars news agency later listed several bridges in Saudi Arabia, Kuwait, Abu Dhabi and Jordan as potential targets for Iranian military operations after one of its own bridges was hit by airstrikes. The Revolutionary Guard said it had targeted an Amazon cloud computing center in Bahrain.
There are fears the conflict may leave Iran with a stranglehold over Middle East energy supplies now that it has shown it can block the Strait of Hormuz by targeting oil tankers and attacking Gulf countries hosting U.S. troops.
Gulf states say they reserve the right to self-defense but have refrained from responding militarily to repeated Iranian attacks over the past month, seeking to avoid escalation into an all-out Middle East war.
Iran’s parliament was reviewing a bill that would formalize the blocking of vessels from hostile countries passing through the strait and the charging of tolls for others, spokesperson Abbas Goodarzi said.
Strike on Iran bridge kills 8
Thousands of people have been killed and tens of thousands injured across the Middle East since the war began. The head of the International Federation of Red Cross and Red Crescent Societies delegation said Thursday that medical needs were rising exponentially and supplies could run low.
Iran’s state media said eight people were killed and 95 wounded when a bridge linking Tehran and the western city of Karaj was hit by airstrikes. Some large steel producers and the Pasteur Institute of Iran medical research center were reported to have sustained serious damage.
The Revolutionary Guard said it had targeted U.S.-linked steel and aluminum facilities in Gulf states and an Oracle data center in Dubai, and would step up such attacks if Iranian industries were hit again.
Sirens and the booms from interceptors rang out over Jerusalem after the Israeli military said it identified the launch of a missile from Yemen toward Israel.
Yemen’s Iran-aligned Houthis first claimed an attack on Israel at the end of March, as the conflict with Iran has expanded across the region.
Fuel shortages have already caused economic strains across Asia and are expected to bite in Europe soon, while a report by two U.N. agencies warned a sharp economic slowdown could spark a cost-of-living crisis in Africa.
SpaceX has pushed its target IPO valuation past the $2 trillion mark, a report said on Thursday, setting Elon Musk’s rocket and satellite company for what could become the largest public listing the stock market has ever seen.
SpaceX and its advisers are floating the figure to prospective investors in its initial public offering, Bloomberg News reported, adding that deliberations are ongoing and details of the IPO could still change.
The startup submitted confidential IPO paperwork with the U.S. Securities and Exchange Commission recently and is targeting a market launch later this year.
The Starbase, Texas-headquartered firm could raise as much as $75 billion, according to the report, surpassing the 2019 IPO of Saudi Aramco, which remains the largest on record.
An earlier expectation of a $1.75 trillion valuation was already sparking debate over how much of that value was driven by SpaceX’s cash-generating Starlink business and how much of a premium could be applied to its dominance in space launches, and unproven ventures such as Starship and space-based AI.
The IPO comes after Musk merged SpaceX with his artificial intelligence startup, xAI, in a deal that valued the rocket company at $1 trillion and the developer of the Grok chatbot at $250 billion.
The rocket maker has been lining up anchor investors well ahead of its stock market debut. It has had discussions with Saudi Arabia’s Public Investment Fund about taking an anchor stake of around $5 billion in the IPO, Reuters reported on Thursday.
U.S. President Donald Trump on Thursday ordered new tariffs on certain medicines and an overhaul of metal duties, doubling down on his trade agenda a year after launching trade wars on virtually all partners.
The two orders he signed pile pressure on pharmaceutical companies to manufacture more in the United States, while separately targeting firms that officials accuse of “artificially manipulating” metals prices.
Finished products containing substantial amounts of steel, aluminum and copper will also face a 25% tariff on their full value instead of being targeted for the specific amount of metal they contain, a move intended to simplify the system for firms.
It is not immediately clear how these moves will affect consumer prices, but a senior U.S. official told reporters the administration does not expect to see an effect on affordability.
The moves come on the anniversary of what Trump dubbed “Liberation Day,” when he announced varying tariff rates on goods from dozens of economies last year, roiling financial markets and snarling supply chains.
Although the Supreme Court struck down those global tariffs in February, Trump has been working to reinstate duties using different authorities. His goal for “Liberation Day” was the rebirth of American industry, bringing an influx of jobs and an investment boom – although critics argue these have largely not materialized.
Making good on a threat from last fall, one of Trump’s orders Thursday imposes a 100% tariff on patented pharmaceuticals made abroad unless countries strike trade deals for lower rates or companies commit to building plants in the United States.
Large companies will have 120 days to commit to “reshoring plans” before the steep duty kicks in, while smaller companies have a 180-day buffer, a senior U.S. official said.
“We expect the lion’s share of the world’s patented pharmaceuticals to be building in America,” the official said.
Those who commit to building manufacturing plants – to be completed by the end of Trump’s second term – will face a 20% tariff instead. The European Union, Japan, South Korea and Switzerland will be excluded from this plan and face a 15% pharmaceutical duty due to previous trade deals with Washington.
Britain, meanwhile, has secured a deal allowing U.K.-made medicines tariff-free access to the United States for three years as part of a broader pact, the U.S. Trade Representative’s office said.
Drug companies that reach “most favored nation” pricing deals with the Trump administration while also building plants in the United States can also be exempt from the sharp pharmaceutical tariff. Generic products are not currently subject to tariffs, a decision the White House said will be reassessed in a year.
Affordability concerns
The second order Trump signed reshapes his 50% tariffs on steel, aluminum and copper, requiring importers to pay the duty based on prices American buyers are facing. It is set to take effect at 12:01 a.m. EDT Monday, a White House official told Agence France-Presse (AFP).
The senior administration official charged that “foreign countries were artificially manipulating” prices of imported metals to pay lower tariffs.
The same proclamation called for finished products made with more than 15% steel, aluminum and copper to face a 25% tariff on their full value, rather than being targeted based on metal content.
“It’s a simplification and a fairness issue,” the official said.
Asked about cost-of-living concerns, which have flared ahead of the 2026 midterm elections, the official maintained that the moves should not impact households. “These will not have impact on the price of the good on the shelf,” the official insisted.
U.S. consumers are on course for record fuel prices at the pumps just ahead of the country’s peak summer travel season, market experts said on Thursday, after President Donald Trump’s used his address to the nation to vow more aggressive strikes on Iran.
Americans expected Trump’s speech on Wednesday to outline a plan to end the Iran war and reopen the Strait of Hormuz, as blockade of the global oil conduit has sent oil and fuel prices skyrocketing, pinching consumers’ wallets. But instead, Trump vowed to bomb Iran back into the “Stone Ages” and said the strait would just open “naturally” when the war ends.
The comments sent U.S. crude oil prices surging more than 10% on Thursday, and U.S. average retail gasoline prices are now set to climb to between $4.25 and $4.45 a gallon by next week after crossing $4 a gallon for the first time since 2022 at the start of this week, said Patrick De Haan.
The pain could worsen. If there is no viable plan to reopen the Strait of Hormuz, the U.S. average price of gasoline will likely cross $5 a gallon and hit record levels within a month, De Haan said.
Wholesale markets had begun moving higher on Thursday, with midmorning increases of 17 cents a gallon in the Great Lakes, Great Plains, Northeast and West Coast markets, and a 19-cent-a gallon hike in the Gulf Coast, said Tom Kloza, chief energy adviser to Gulf Oil on social media.
Meanwhile, diesel prices, less visible to consumers but arguably more impactful as they are directly tied to the cost of making and moving goods, could hit a record high within two weeks, De Haan said.
The national average retail diesel price is set to climb from $5.47 a gallon on Thursday to between $5.80 and over $6 a gallon within the next two weeks, De Haan said. The record U.S. average retail price was $5.83 a gallon in 2022.
The central bankers around the world may be attempting the impossible: to get into the psyche of business executives, labor unions and ordinary households in real time to try to understand how they are navigating their finances through what appears to be yet another major energy shock.
Policymakers are contemplating whether to jack up interest rates to combat rising inflation. But they will only pull the trigger if they think a surge in energy costs induced by the Iran war will filter into other prices, lifting inflation expectations across the entire economy.
The problem is that measuring such expectations is notoriously difficult. Central banks have a trove of surveys, gauges and indicators at their disposal, but all of them have blind spots if not outright faults.
Since the COVID-19 pandemic, they have developed new tools to fill gaps in data about behavior. But measuring expectations remains more of an art than an exact science.
That could raise the bar for rate hikes as policymakers are wary of gut-feeling decisions and usually prefer to wait for more evidence to narrow the risk of a policy error.
Behaviors have changed
Policy-makers at the Bank of Canada acknowledged that global uncertainty meant they “would need to rely on judgment more heavily than usual” to plot the path of the economy, according to minutes of its March 18 meeting at which it kept rates on hold.
Others describe the effort involved in the process.
“I try hard to get into the thoughts of price-setters and how they are seeing it – trying to calibrate their confidence in pricing power,” Richmond Federal Reserve Bank President Tom Barkin told Reuters.
“The ‘hike’ case would be around inflation expectations starting to finally move,” he said. “I don’t have a sense that they’ve broken out at this point.”
One complication is that behaviors change.
In 2022, consumers and firms had little experience with rapid inflation, making price- and wage-setting a rather rigid exercise.
“But now people have lived through a painful episode of inflation, and this may mean that inflation expectations are more fragile, and so they could be more sensitive to such an energy price shock,” European Central Bank (ECB) board member Isabel Schnabel said in a university lecture on Friday.
For companies, changing their selling prices was a cumbersome process before the pandemic and so they limited adjustments, often to once a year. This became untenable and the frequency of changes skyrocketed, Schnabel argued.
This makes the frequency and not just the magnitude of such changes a good indicator that expectations are shifting.
Traditionally, central banks relied on surveys and market indicators to assess expectations. But surveys are not done frequently enough to capture rapid changes and their time horizon is often out of sync with that of policymakers.
Market indicators of expected inflation are also imperfect because they include the extra return, or risk premium, that investors demand for holding a particular financial instrument. This changes with market sentiment, blurring shifts in actual price expectations.
The stakes are high: investors now expect the ECB to raise rates two or three times this year, the Bank of England (BoE) twice, and have given up on any Fed rate cuts in 2026.
Innovating to cover knowledge gaps
To compensate for such information gaps, central banks have developed an array of new tools. They track expected wage changes, including via major pay deals announced by unions, which may be a signal to others negotiating their own pay.
They survey firms directly and speak to executives to gauge expected behavior, and they take on board ever-larger numbers of external surveys with forward-looking indicators.
Central bank staff track the frequency of price changes, correct existing surveys to fill data gaps and have revised their own projection models to address shortcomings that missed 2022’s inflation surge caused by the pandemic and Ukraine war.
Also key to their judgment call is trying to understand how this inflation shock differs from four years ago.
The consensus on this seems firm: conditions are fundamentally different.
Interest rates are already higher, government purses are tighter, there is growing slack in the labor market, and – unlike during the pandemic, when they were unable to spend – households are not sitting on piles of cash.
“We’re coming into this situation with the gradual disinflation that we were having, the labor market is softening (and) growth is a little bit below potential,” Bank of England Governor Andrew Bailey told Reuters.
“And one of the consistent messages we get from businesses is, for most sectors of the economy, a real lack of pricing power.”
Using their enhanced insight, central banks are, for now, confident that longer-term inflation expectations are holding firm around their targets.
But the longer the war drags on, the longer energy prices will stay high, and as consumers see everyday costs like fueling their cars rise, the more likely it is that inflation expectations will move upwards. When exactly this happens will not be clear, leaving policymakers to judge for themselves.
“Economics itself is not an exact science,” ECB policymaker Primoz Dolenc said.
“It’s of course based on analytics, but by definition, there is also a perception and judgment element.”
Turkish exports declined 6.4% in March, while imports surged 8.4% compared to a year earlier, a top official said Thursday, announcing the preliminary trade data, which thus indicated that the country’s trade gap widened over the same time.
Exports totaled $21.9 billion (TL 974.49 billion) in March, down 6.4% from a year earlier, Trade Minister Ömer Bolat said at a gathering organized in the eastern province of Van. Imports stood at $33.2 billion, according to the minister.
Consequently, the country’s foreign trade deficit widened 56.6% year-over-year to $11.3 billion in March, while the exports-to-imports coverage ratio stood at 66.1%, he added.
In the January-March period, exports fell 3.1% annually to nearly $63.3 billion, while imports increased 4.7% to $92 billion, he also said.
The foreign trade deficit in the first three months of the year rose 27.5% from a year ago to $28.7 billion, with the exports-to-imports coverage ratio at 68.8%.
Elaborating on the data, Bolat attributed the decline in exports to the war conditions, the long holiday period, and the calendar effect, referring to the Eid al-Fitr holiday and shipments varying according to the days of the week.
“When this happens, it negatively affects exports in particular. There is also a $350 million decrease in gold exports as processed products,” he said.
Bolat also stated that there is “a fluctuating trend” in exports this year when looking at the first three months, adding that it is likely to continue this way. “We will close this gap in April, but again in May there is a long holiday, and in June we will compensate. It will continue like this,” he added.
Moreover, he informed that on a 12-month rolling basis covering April 2025 to March 2026, exports rose 3% to $271.3 billion and imports climbed 6.3% to $369.6 billion. The foreign trade gap in the period increased 16.4% to $98.3 billion, while the coverage ratio was 73.4%.
EU top trade partner
According to the data, Germany was Türkiye’s top export destination in March with $1.8 billion, followed by the U.S. with $1.4 billion and Italy with $1.3 billion.
On this, Bolat said that the European Union “once again stood out as Türkiye’s strongest foreign trade partner.”
“Our exports reached $28.3 billion in the first three months. Türkiye gained a trade surplus of $1.4 billion with the EU,” he furthered.
By sectors, manufacturing accounted for the largest share of exports in March at $20.5 billion, while agriculture, forestry, and fishing contributed $800 million and mining and quarrying $400 million.
By broad economic categories, intermediate goods made up the largest portion of exports at $11.6 billion, followed by consumer goods at $6.7 billion and investment goods at $3.1 billion.
Sector-wise, the automotive industry was the top exporting sector in March, with exports reaching $3.3 billion. Chemicals and chemical products ranked second with $3 billion, while the steel sector came in third with $1.6 billion.
Excluding energy and gold, Türkiye’s exports-to-imports coverage ratio came in at 78.9% in March, while the top 10 export markets accounted for 46% of total exports.
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