In the midst of an economic inflation crisis that affected the purchasing power of citizens, and in light of successive global crises that cast a shadow on local economies, Turkish President Recep Tayyip Erdogan announced on September 13, 2022, the "largest social housing project" in the history of the republic, as described by the government, in a step The latter is expected to contribute to reducing inflation, especially in the real estate and housing sector.

The ambitious project, after the completion of all its phases, aims to acquire the most vulnerable social groups, about 500,000 housing units, 50,000 workplaces, and 250,000 plots of land suitable for construction.

In Turkey, real estate projects implemented by Toki, an abbreviation of its name (Turkish Housing Administration), are called "social housing", because it aims to sell residential properties with economic specifications and minimal costs, to suit low-income citizens, in terms of prices and facilities. Finance.

Turkish citizens usually apply to own these projects by participating in a lottery and under qualified conditions that ensure that the higher-income people are not crowded out for relatively cheap real estate.

Toki's project aims to owned the most vulnerable groups about 500,000 housing units and 50,000 workplaces (Turkish press)

Sharp price hike

Data published by specialized agencies during October 2022 showed that real estate prices throughout Turkey increased by 150-200% within a year.

While the Turkish Central Bank estimates that house prices have risen by 145.5% within a year, the website (endeksa.com), which specializes in the Turkish housing sector, indicated that prices rose in the same period in Istanbul by 173% and in Antalya by about 183%.

Thus, the prices of residential real estate in most major cities often range between two million and 6 million Turkish liras, or the equivalent of 100 and 250 thousand US dollars, depending on the size of the apartment, the region and the specifications.

However, the campaign announced by the government under the slogan "My first home... my first place of work", will provide homes of the type of two rooms and a hall for the targeted groups with a monthly installment starting at 2,280 Turkish liras over a period of 240 months, after paying 10% of the value of the housing as a down payment, which means that The value of the cheapest apartment of this type will not exceed 608,000 Turkish liras, according to a poster published by the Turkish president in a tweet on his Twitter account.

As for the 3-room apartments, the monthly installment will start at 3,187 Turkish liras over a period of 240 months as well. In its first two-year phase, the project will deliver 250,000 apartments, 10,000 workplaces and 100,000 plots of land.

Anticipating the expected recession?

Analysts believe that the project may constitute an effective preventive move to confront a wave of global recession expected by economic experts around the world. Ibrahim Arslan, professor of economics at the Turkish University of Gaziantep, believes that the project is a "right choice" at this time, in light of the expectations of economic stagnation and downturn that may arise as a result.

Arslan adds to "Al Jazeera Net", that focusing on the construction sector will lead to maintaining economic growth and achieving faster and more positive results, considering that this sector is "a vital option for employment, production and growth in the short term."

In general, the construction sector is a large and important sector that includes nearly 200 sub-sectors of various fields, according to the Turkish academic, who pointed out that in this sector nearly 1.5 million people find job opportunities, while its share ranges between 4.5 and 5% of the economy, Specifically, according to the GDP criterion.

Ibrahim Arslan believes that focusing on the construction sector will lead to maintaining economic growth (Al-Jazeera)

What are the target groups?

The government divides the target groups for this project into 5 categories:

  • Families of martyrs and veterans.

  • People with special needs.

  • retirees.

  • Young people between the ages of 18 and 30 years.

  • A category that the authorities later determine who is entitled to run for it.

Applicants to benefit from this project require a series of conditions, the most important of which is that the applicant or any member of his small family does not own any home registered in the Tabu, and that he or any of his family members did not obtain a home from the “Toki” company, in the past, and that his family income does not exceed 16 thousand pounds Turkish citizens or 18,000 in Istanbul, and to be a Turkish citizen who has completed his eighteenth year, with exceptions for the families of martyrs, veterans and war casualties.

Toki company began receiving applications from Turkish citizens on September 14, and will continue until October 31, and the application is submitted in one of the company's branches or through the e-government portal (E Devlet) with the payment of a subscription fee of 500 liras. Turkish, refundable in case the applicant does not win the lottery that will take place at a later time.

According to the latest statement by government officials, the number of applicants for the project exceeded 7 million, which caused temporary technical problems on the e-government portal website.

Project time period

The Minister of Environment, Urbanism and Climate Change, Murat Kurum, announced in early October that the foundation stone for the first 5,000 housing units will be laid on the 25th of the same month, reiterating that the first phase of this project, which includes 17 states, including Istanbul, will be completed within two years.

Will the project curb inflation?

While Arslan asserts that the social housing project "will have positive effects in relieving long-term inflationary pressures, as it includes an impact on increasing savings, increasing the supply of housing and reducing pressure on housing and rental prices," believes Jalal Bakar, an expert residing in Turkey and an advisor in economics and investment. The project's impact on inflation indicators "will not be appreciable."

Bakr attributed this, according to Al-Jazeera Net, to the fact that the project, which he described as a positive move by the government, comes "at a very difficult time in terms of global economic conditions", recalling the wave of stagflation that swept the world and still is, and the fears of recession.

Bakkar pointed out that construction costs and the prices of building materials have risen at the international level by more than 270 percent, which will affect the government's budget, warning of "economic uncertainty" surrounding the project given the circumstances.

Despite this, the economic expert stressed that this project remains "very important, because Turkish citizens' access to homes with simple payments that do not affect their incomes may constitute a temporary solution in light of the current crises, and will also reflect positively on the government's reputation internally."