Economy
What mortgage limit overhaul means for Turkish housing market
Türkiye’s banking watchdog has revised mortgage lending limits, a move sector experts say is a bid to make housing more accessible for middle-income households and revive demand in the lower and mid-tier residential property market.
The Banking Regulation and Supervision Agency (BDDK) said over the weekend that it had updated loan-to-value (LTV) ratios for housing loans, removing the distinction between new and second hand homes and raising borrowing limits, particularly for properties priced below TL 7 million ($160,000).
The changes also eliminate a long-standing disadvantage faced by buyers of second hand homes, where permitted mortgage ratios had been set lower than for newly built properties.
Industry representatives described the decision as a “loosening step” aimed at easing access to housing amid high prices and elevated borrowing costs.
Higher loan ratios for second hand homes
Under the new rules, mortgage limits for second hand homes have been significantly relaxed, allowing borrowers to finance a larger share of the purchase price.
Previously, buyers of second hand homes priced between TL 2 million and TL 5 million could borrow up to 60% of the property’s value. Under the revised regulation, this ratio has been raised to 90%.
“For a long time, high housing prices and high mortgage rates have made access to housing extremely difficult,” said Makbule Yönel Maya, general manager of TSKB Real Estate Valuation.
“With this regulation, we can say that the authorities are trying to make home ownership somewhat easier, especially for the middle-income group,” she said.
Maya added that the changes are “a sign of easing.”
“Previously, it was almost impossible to obtain a mortgage for second hand homes priced above TL 10 million,” she said. “Now, buyers will be able to borrow up to 50% of the value for homes priced between TL 10 and TL 20 million. In this sense, we can speak of a relaxation.”
Tighter limits for luxury segment
While borrowing conditions have been loosened for lower- and mid-priced homes, restrictions were tightened for higher-end properties.
For newly built homes valued at TL 20 million and above, the maximum mortgage ratio was cut to 40% from 60%.
The BDDK said the changes were introduced to ensure the “efficient use of financial resources in a way that supports lower-income groups.”
Mortgage sales remain subdued
Rising interest rates, regulatory tightening and broader efforts by economic policymakers since mid-2023 to cool domestic demand have led to a sharp decline in mortgage home sales in recent years.
According to data from the Turkish Statistical Institute (TurkStat), the share of mortgage-backed home sales in total housing transactions fell to 14% by the end of 2025, down from 19% at the end of 2022.
Impact depends on interest rates
Maya said the latest easing could stimulate demand, particularly in large metropolitan areas where affordability remains a key challenge.
“House prices are currently rising below inflation,” she said. “In a period where prices are relatively stable, improving loan-to-value ratios can find a response on the buyer side. Rents are high, and many people prefer to buy a home to live in rather than continue renting.”
However, she cautioned that the effectiveness of the measure would largely depend on borrowing costs.
“The next critical phase is mortgage interest rates,” she said. “The central is lowering policy rates. If those cuts are reflected in loan rates, the regulation will have a much stronger impact.”
The Central Bank of the Republic of Türkiye (CBRT) slashed its policy rate by 100 basis points in January to 37%, extending its easing cycle.
Maya noted that when interest rates were lower, mortgage sales accounted for around 30% of total housing transactions.
“With this regulation, the current 14% share will increase, but it won’t return to 30%. At best, it may rise toward 20%. Because interest rates remain high,” she said.
According to the TurkStat data, mortgaged home sales peaked in 2013, when they accounted for 40% of total transactions.
Savings could shift toward property
Average monthly interest rates on 10-year housing loans currently stand at around 2.69%-2.79%, according to market data.
According to Maya, recent gains from gold and deposit interest could support housing demand.
“When you look at the underlying motivation, people want to own homes,” she said. “Housing prices are currently not rising as fast as inflation, so households may prefer to realize their gains from gold or deposits in real estate.”
Under the BDDK regulation, the rule that reduces mortgage limits by 75% for borrowers who already own at least one home, either personally, through a spouse, or via children under 18, will remain in place.
Japan’s inflation slowed down in February, government data showed Tuesday, providing some relief, although it could soon pick up again as the Middle East war sparked a sharp rise in oil prices.
Prime Minister Sanae Takaichi – who was appointed leader in October – has promised to fight inflation as a major priority, with public discontent over rising prices a contributor to the downfall of her two predecessors.
Excluding fresh food, “core” consumer prices rose 1.6% year-over-year, the slowest rise since March 2022, down from 2% in January.
It was a bigger drop than expected, partly thanks to government energy subsidies.
Rice prices rose again in February, but at 16.6%, a far lower pace than in previous months.
Overall, consumer price growth, including fresh food, eased to 1.3% in February from 1.5% in January, with market consensus pegged at 1.5%.
However, Japan’s central bank said last week that it expected inflation to increase because of the “recent rise in crude oil prices” caused by the Middle East war.
Stefan Angrick of Moody’s Analytics also warned Tuesday that “the relief likely won’t last.”
“Government support was a key factor in February’s dip,” he wrote in a note.
“But with the conflict in the Middle East scrambling the outlook for commodity prices and growth, a fresh jump in consumer price inflation is a significant risk,” he said.
Worried residents
Some Tokyo residents said they were very worried about rising prices.
“I keep seeing in the news how oil is used in all sorts of things, everywhere,” said 45-year-old Manami Kinoshita.
And “when I look at things like egg prices, for example, I get the feeling that prices are gradually going up across the board,” she said.
“That part really concerns me.”
Japan depends on the Middle East for 95% of its oil imports. The government on Thursday began an emergency subsidy program to drive down the cost of gasoline.
It is hoped the gasoline subsidies will help bring petrol prices to around 170 yen ($1.06) per liter, Chief Cabinet Secretary and top government spokesperson Minoru Kihara has said.
The average gasoline price in Japan was hovering just below 160 yen per liter before the war began, according to the Oil Information Center, a Japanese industry research body.
Government officials expect it could take up to two weeks for the gas prices to come down to the target level.
Takaichi said Tuesday Japan would release another part of its strategic oil reserves from Thursday and would tap into joint stockpiles held by producing nations in the country as soon as this month.
The announcement came after Tokyo last week started releasing 15 days’ worth of private-sector petroleum reserves.
A joint reserve is held in Japan by Saudi Arabia, the United Arab Emirates (UAE) and Kuwait, according to the Petroleum Association of Japan.
The European Union announced on Monday that a free trade agreement (FTA) signed with the South American bloc of nations (Mercosur) will provisionally enter into force on May 1, despite a pending court ruling on its legality.
The mammoth deal to eliminate tariffs on more than 90% of trade between the two blocs has proven divisive in Europe, with France leading opposition over concerns some of its farmers will be worse off because of it.
But, backed by a majority of EU countries, Brussels has ploughed ahead as it pushes to diversify trade in the face of challenges from the United States and China.
“Today is an important step in demonstrating our credibility as a major trading partner,” EU trade chief Maros Sefcovic said.
“The priority now is turning this EU-Mercosur agreement into concrete outcomes, giving EU exporters the platform they need to seize new opportunities for trade, growth and jobs.”
The move comes as Paraguay ratified the deal last week, becoming the last Mercosur member to do so after Argentina, Brazil and Uruguay.
“Provisional application ensures the removal of tariffs on certain products as of day one, creating predictable rules for trade and investment,” the European Commission, in charge of EU trade policy, said Monday.
It added that it had notified Mercosur partners.
“EU businesses, consumers and farmers can thus start reaping the benefits of the deal immediately.”
The EU had already signalled in February that it would provisionally implement the deal, prompting a public split between its two largest member states, France and Germany.
The pact still needs a green light from lawmakers in the European Parliament, which referred it to the EU’s top court within days of being inked in January.
France unsuccessfully attempted to block the deal over worries for its farmers, who fear being undercut by cheaper goods from Brazil and its neighbours.
The accord creates one of the world’s biggest free trade zones. Together, the EU and Mercosur account for 30% of global gross domestic product (GDP) and more than 700 million consumers.
It favors European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soybeans to enter Europe.
Gold and silver prices continued to see sharp losses on Monday, with bullion failing to act as a traditional safe haven amid the Iran conflict, as rate cut hopes fade and markets are instead pricing higher borrowing costs to tame the potential rise in global consumer prices.
Gold slid more than 8% on Monday to hit its lowest level in four months, after logging its biggest weekly loss in about 43 years last week, as an escalating Middle East conflict stoked inflation concerns and raised expectations of higher global interest rates.
Spot gold declined 6.3% to $4,203.21 per ounce by 07:57 a.m. GMT, extending losses into a ninth straight session. It had shed more than 8% to $4,097.99 earlier in the session to its lowest level since Nov. 24.
The metal dropped more than 10% last week, its steepest weekly loss since February 1983, and has also retreated about 25% from its record peak of $5,594.82 an ounce reached on Jan. 29.
Silver has seen even steeper losses. Prices have dropped by nearly half from a record high of around $122 per ounce at the end of January. On Monday, silver fell a further 5% to around $64.25, leaving it down more than 30% since the Iran conflict began just over three weeks ago.
Later during the day, it slipped below $64.
Rising oil prices have increased inflation risks and reduced expectations for near-term interest rate cuts by the U.S. Federal Reserve (Fed) and other central banks. Higher interest rates typically weigh on non-yielding assets such as gold.
Monday’s decline wiped out all gains made since the start of the year. Gold has fallen nearly $1,300, or about 23%, from its record high of close to $5,600 in late January.
“With the Iranian conflict into its fourth week, and oil prices hanging around the $100 level, expectations have pivoted from rate cuts to potential rate hikes, which have tarnished gold’s appeal from a yield point of view,” said Tim Waterer, chief market analyst, KCM Trade.
Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours in retaliation if U.S. President Donald Trump followed through with his threat to hit Iran’s electricity grid.
Asian shares fell, and oil prices stayed above $110 a barrel.
“Gold’s high liquidity appears to be hurting it during this risk-off period. Downturns in stock markets are leading to gold portions being closed to cover margin calls on other assets,” Waterer said.
The closure of the Strait of Hormuz has kept crude elevated, stoking inflation fears by pushing up transport and manufacturing costs. While rising inflation typically boosts gold’s appeal as a hedge, high rates curb demand for the non-yielding asset.
“A reinforced shift from safe-haven allocation towards macro-driven positioning could skew risks further to the downside, as a firmer U.S. dollar and the receding probability of the Fed easing dominate the narrative,” said BMI, a unit of Fitch Solutions.
Market pricing for a U.S. Federal Reserve rate hike this year has shot up, with rate futures showing the U.S. central bank is more likely to raise interest rates than cut them by the end of 2026, according to CME’s FedWatch tool.
Other precious metals also declined sharply, including platinum, which was down 6.4% to $1,799.25.
A top Turkish industrial group, Eczacıbaşı Holding, having operations in pharmaceuticals and personal hygiene consumer products sectors, said on Monday it agreed on the sale of its Sanipak unit to Malaysia-based Arch Peninsula Sdn Bhd in a deal valuing the firm at $600 million.
In a statement shared to the Public Disclosure Platform (KAP), Eczacıbaşı said that the share purchase agreement was signed on March 20.
“Pursuant to the terms set forth in the agreement, based on a total enterprise value of Sanipak determined as $600 million, the consideration to be paid to Eczacıbaşı Holding at closing shall be determined by applying adjustments for financial debt, cash and working capital based on the financials as of the closing date, and will be subject to post-closing adjustments,” the company said.
Sanipak is a maker of popular tissue and cleaning papers in Türkiye under the brands Selpak and Solo, respectively.
The transfer, which will be completed after approval from regulatory bodies in the relevant countries, including the Competition Authority, “will create a significant resource for Eczacıbaşı’s dynamic portfolio management and sustainable growth objectives, while strengthening the global market presence of Sanipak’s brands,” Eczacıbaşı separately said on its website.
“In the personal hygiene products sector, where we started operating in 1969 under the name Ipek Kağıt, we created Türkiye’s most beloved and pioneering brands. We transformed our country’s hygiene and personal cleaning habits. Today, we believe that Sanipak is stepping into a new era with a strong international player that can best utilize its global growth potential. This step will enable Sanipak brands, which originated in Türkiye, to expand even more strongly into world markets and reach millions of new households,” said Eczacıbaşı Group CEO Burak Sevilengül.
Founded in 1969 by the Eczacıbaşı Group to be the first company in Türkiye to produce branded tissue paper, Sanipak operates three production facilities in Türkiye and two in Morocco, exporting to over 60 countries and employing more than 2,000 people, according to the company.
Arch Peninsula Sdn Bhd is a global tissue paper and hygiene products investment platform focused on building market-leading consumer brands in geographies with high growth potential. Its portfolio includes established tissue paper and personal care companies serving consumers in Asia-Pacific, the Middle East, Europe and North Africa.
The energy crisis triggered by the war between the U.S., Israel and Iran is expected to fuel inflationary pressures in the global economy, while the economies of Gulf countries – key logistics hubs in global trade – are suffering serious damage from the conflict, according to an Anadolu Agency (AA) report released on Sunday.
This section of AA’s special report series titled “The Toll of War in the Gulf” examines the impact of developments following U.S. and Israeli attacks on Iran, not only on regional economies but also on the global economy.
Asian countries stand out as the main export markets for Gulf nations such as the United Arab Emirates (UAE), Qatar, Bahrain, Kuwait, Saudi Arabia and Oman. Accordingly, the closure of the Strait of Hormuz poses a risk not only to the entire world but especially to Asia.
While this situation leads to significant revenue losses for Gulf countries, it also puts pressure on their production models, which rely heavily on foreign labor.
Since the war began, Dubai’s real estate index has plunged by around 26%, while Qatar’s has declined by about 7%. Meanwhile, Dubai’s financial market index has dropped by roughly 15%.
Similarly, Saudi Arabia’s stock market was down sharply at the onset of the war, and, although it has since partially recovered, it remains at lower levels. Significant declines have also been observed in the UAE and Qatar stock markets.
The region-driven energy crisis also poses risks for global inflation.
Gulf oil
Erhan Akkaş, an associate professor at the Economics Department of Ankara Social Sciences University, stated that the sharp decline in Dubai’s real estate index indicates how negatively the city’s economy will be affected by this process.
Noting that Kuwait, Oman and Bahrain have been similarly impacted, Akkaş said: “There are declines in the stock markets of Gulf countries. However, the UAE and Qatar appear to be much more affected.”
“The UAE, in particular, is impacted by factors such as tourism, financial markets, trade and workers returning to their home countries,” he added.
Akkaş emphasized that the Gulf is an energy-rich region dominated by oil and its derivatives, warning that the closure of the Strait of Hormuz or damage to energy infrastructure would expose countries to serious risks.
He added that problems in the energy sector have a “spillover effect,” impacting even sectors not directly related to oil.
“Since the global economy is largely dependent on Gulf oil and natural gas, production costs rise across nearly all sectors, creating inflationary pressure worldwide,” he noted.
Akkaş also recalled that before the oil era, Gulf exports were largely based on fishing, pearl diving and related economic activities, while imports were dominated by high-value-added industrial goods and consumer products.
He explained that precious stones and metals, such as gold, diamonds and jewelry, are among the most significant goods, especially in imports. These are followed by machinery and mechanical equipment, including industrial machines, turbines and production tools. Electrical equipment ranks third, with computers, phones, and other electronic devices leading this category. Finally, motor vehicles and spare parts are also among the most imported goods in Gulf countries.
Impact on Dubai
At the same time, Akkaş suggested that Dubai will be among the most affected locations, as re-exported goods are directly exposed to the crisis.
“The UAE, especially through Dubai Port, is a re-export hub. Dubai, one of the key centers of global maritime trade and logistics networks, faces the risk of losing this position,” he said.
“Therefore, it is among the places that will be most directly affected.”
“Re-export activities, maritime trade, and port-based sectors are facing serious challenges. Since oil and natural gas are fundamental inputs for nearly all sectors, any decline in production or disruption in logistics leads to interruptions across a wide range of industries, from automotive to packaging,” he maintained.
Furthermore, Akkaş opined that significant issues arise in production processes where plastics and petroleum derivatives serve as raw materials, driving price increases and inflationary pressures.
“This is because oil and its derivatives are essential components in the production of many goods used today,” he said.
White-collar workers may leave
Akkaş noted that such crises can affect nearly all sectors through spillover effects, emphasizing that Gulf economies rely heavily on foreign labor.
He explained that white-collar workers, especially in fields requiring expertise, management, and technical knowledge, such as engineering, are largely recruited from Western countries.
“They may return to their home countries or move to safer regions of the world to find work,” he pointed out.
Higher prices
At the same time, analysts and executives at many financial institutions warn that prolonged war in the Middle East risks higher energy prices, which directly translate into higher consumer prices as oil and gas are key commodities widely used in production processes across industries.
First concerns related to higher prices and inflation came from leading global central banks, which in recent days decided to keep borrowing costs unchanged, or in some cases, like Australia, even deliver a small hike.
In a statement, the Reserve Bank of Australia (RBA) board said the conflict in the Middle East had resulted in “sharply higher fuel prices, which, if sustained, will add to inflation.”
As Washington and Beijing mull a new mechanism to manage bilateral trade between the world’s two largest economies, some analysts are concerned that it could interfere with market forces, while others consider it to be a path toward smoother coexistence.
What is the managed approach to trade that Donald Trump’s administration is seeking with China, as both sides work towards the U.S. president’s potential meeting with Chinese leader Xi Jinping in the coming weeks?
What is a ‘Board of Trade’?
After top U.S. economic officials held talks with their Chinese counterparts in Paris last weekend, U.S. trade envoy Jamieson Greer said both sides discussed creating a “U.S.-China Board of Trade.”
The mechanism would help to formalize and identify what kinds of goods the United States should be exporting to and importing from China, he said.
The board could look into opportunities for expanding trade in non-sensitive products, or discuss mutual tariff reduction in non-strategic sectors, said Wendy Cutler of the Asia Society Policy Institute.
For now, officials appear to have made progress towards Chinese purchase commitments for agriculture, energy and planes from the United States, added Cutler, a former U.S. trade official.
Is this new to U.S.-China ties?
The talks come as Washington looks towards “managed trade,” which Chad Bown of the Peterson Institute for International Economics said focuses on outcomes rather than policies.
This could mean import commitments or voluntary export restraints, as in the case of Japan in the 1980s to manage the flow of autos into the United States, he said.
A more recent example is the “Phase One” deal that Washington signed with Beijing during Trump’s first presidency, marking a truce in their trade war, Bown added.
The agreement saw China agree to import an added $200 billion in U.S. products over two years, although China did not meet the commitment.
Why has this sparked worry?
“Instead of taking regulations out, tariffs down, and making it easier for customers and companies to decide what they sell at what prices, it (would be) more mechanized,” said Joerg Wuttke, a partner at advisory firm DGA-Albright Stonebridge Group.
“That’s not a good sign,” he told Agence France-Presse (AFP). “Where are the market forces?”
Such an approach is also not good for competitiveness, and could fuel concern among other trading partners, Wuttke warned.
A U.S.-based business leader, speaking on condition of anonymity, said that managing trade raises concerns over how Washington will decide which industries to prioritize, and which sectors will benefit.
Does it help the relationship?
Bown of PIIE believes a managed trade agreement between the United States and China could be more successful than previous attempts to solve economic conflicts.
The question is whether this leads to “a more sustainable, longer-term relationship” that is better than a “constant back and forth of conflict,” he said.
“It’s clear the old system didn’t work. Could we try a new system that might work?”
But any trade agreement would have to be realistic and acceptable to both parties.
“You’d have to have a sincere commitment by both sides to make this work,” he added. “Even then, it’s going to be really, really hard.”
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