Mustafa Baygan, the Coordinator for Turkey of ERA Real Estate, who evaluated the decision of the Central Bank to reduce interest rates said that the reduction expected by the markets had occurred. Baygan said, “This will lead to a fall in bank interest rates, and that, in turn, will liven up the demand for residential properties.”
Mustafa Baygan, the Coordinator for Turkey of ERA Real Estate, who evaluated the decision of the Central Bank to reduce interest rates, said that the decision of the Central Bank was an expected one, and that they expected to see the positive effects of it on the market immediately. Baygan said that the next step would be the banks endeavoring to reduce their deposit and credit interest rates, and that this endeavor and reductions would liven up the demand for residential properties.
Baygan made the following assessment concerning the reduction in interest rates:
It was an expected reduction and had been purchased as 50 base points. Despite this, there was an instantaneous fall in the dollar from 2.85 to 2.81. Now the banks will endeavor to reduce their deposit rates of interest on the one hand, while on the other hand trying to reduce mortgage rates, which is a demand that has been waiting. This decision will most definitely benefit the demand for properties.
The waiting demand will be realized
“The waiting demand will be realized within a short time. Of course, while interest rates vary between 1 and 1.25 percent, they should actually be around 0.70 percent, but it will take a little time for this to happen. However, we should see today as a starting point.
The way things are going in terms of the economy throughout the world in general is not bad. Even if it is not at the expected levels, inflation is showing a tendency to fall in Turkey. If there is no important change in the other factors as well, the circumstances and the tendencies will reduce interest rates step by step. Even though the expectation in some circles that interest rates would fall to less than 1 percent at the beginning of 2016 has not been realized, this is an indicator that rates will come to where they need to be towards the end of this year.”