GIGDER, in collaboration with the brand and market research company AGS Global, presented the second edition of the foreign housing sales index 'GIGDEKS' to the real estate sector, covering the quarters. GIGDEKS 2, examining the third quarter of 2021, which includes July, August, and September, revealed that the average housing sales price decreased from $196,602 in GIGDEKS 1 to $196,037.
The GIGDER Foreign Real Estate Promotion Association, in partnership with the brand and market research company AGS Global, publishes the foreign housing sales index 'GIGDEKS' every three months. The second edition of GIGDEKS was released in October 2021, covering the third quarter of the year, including July, August, and September. In GIGDEKS 2, the average foreign housing sales price was $196,037, with a score of 121.4 basis points.
Decline in the Use of Bank Loans for Sales
According to GIGDEKS data, there is a significant decrease in the proportion of those using bank loans for foreign housing sales in the July-August-September period. While the ratio of those using loans in the previous quarter, April-May-June, was 30%, it has now decreased to 10% in the summer months. In other words, the proportion of those stating that they did not use loans for sales is at a high level of 90%. These ratios indicate that there is still a long way to go compared to developed real estate markets like the UK, where almost one out of every two sales is financed with loans.
Although the positive sector expectations from the April-May-June period were realized with positive data in the July-August-September period, the negative impacts of the automatic valuation system implemented during this period on foreign real estate sales created skepticism in expectations for the last quarter of the year.
Automatic Valuation Agenda Negatively Affects Expectations
According to the quarterly data of GIGDEKS covering the July-August-September months, nearly all GIGDER member industry stakeholders (93.3%) expressed that the practice of assigning an automatic valuation firm had a negative impact on sales. According to GIGDEKS results, due to the change in the valuation method, GIGDER members incurred a loss of 478 million TL in just 15 days, with losses reaching up to 18 million TL per firm. The breakdown of trust among foreign buyers was effective due to differences in values ranging from an average of 30% to 45% between values in reports prepared for collateral purposes and the market price of real estate.
