While talking about the social housing project, which the government announced as the largest housing project in history, the TOBB data announced showed that the construction industry was about to throw in the towel. According to TOBB’s data, 3 thousand 32 companies that built residential or non-residential buildings were closed in the first 8 months of the year. Thus, the electricity producers, which ranked first among the companies that locked their doors the most, left the summit to the contractors.
The loss of blood continues to increase in construction, which is one of the sectors most affected by the economic crisis that continues to aggravate. The number of businesses closing in the sector, which has grown in recent years mainly through large-scale infrastructure projects of the public, is increasing rapidly.
While projects such as airports, road-bridges-tunnels and health facilities, implemented with the public-private partnership model, accelerate the sector, the slowdown in commercial life negatively affects small and medium-sized enterprises.
SHALL CLOSED CONTRACTORS PLACED THE FIRST RANK
The effects of the increase in construction costs and the deterioration of expectations with each passing day are also reflected in the data on company closures shared by the Union of Chambers and Commodity Exchanges of Turkey. In the 8-month period covering January – August 2022, a total of 3 thousand 32 companies operating in the field of building construction in the construction sector, 151 of which are joint stock, 977 limited and 1,904 individuals, locked their doors.
Thus, the electricity producers, which ranked first among the companies that locked their doors the most, left the summit to the contractors. Contractors are in the first place among the sectors that terminated their activities in the last year.
CASH STRESS IN THE SECTOR HAS STARTED
While the high course of exchange rates and the developments on the interest side increase the costs in the sector, companies that have difficulty in cash flow choose to end their activities.
The fact that small-scale companies with limited technical knowledge and deficiencies in terms of professionalism operate in the construction sector, which is one of the sectors with the highest number of entries and exits, also limits the development and added value potential in the sector.
While the increasing housing stock reveals the imbalance between supply and demand, the decrease in sales causes a decrease in the number of companies engaged in real estate trade and intermediation.
WE ARE AT THE TOP OF THE WORLD IN HOUSING PRICE INCREASE
On the other hand, while the sector was losing blood, according to the research covering 150 cities in the world, Istanbul, Ankara and Izmir topped the list of housing price increases.
UK-based global real estate consultancy company Knight Frank has published the results of the global housing price index for the second quarter of 2022. According to the report covering 150 cities in the world, Turkey’s three largest cities left their mark on the list. Looking at the price increase in the last year, Istanbul was the place where the houses gained the most value with 184.9 percent. Ankara was the second with 165.4 percent, Izmir was the third with 150.9 percent, and Miami was the fourth with 34 percent.
In the report, the fact that Turkish cities were at the top of the list was attributed to the fact that inflation reached 80 percent, increased construction costs and lack of supply. While 9 cities from the USA are among the top 20 cities with the highest increase in housing, the market is expected to weaken in the second half of the year. According to the Knight Frank index, housing prices decreased in 12 of 150 cities.