Housing prices expected to drop sharply in 2023

The decline in housing prices in the world, especially in Turkey, is expected to continue. Economists expect UK house prices to fall by 10% or more in 2023.

UK house prices could drop by as much as 10% next year as rising interest rates and a deepening recession weigh on a burgeoning market. That's the result of a survey of economists and real estate market forecasters, all expecting the first annual declines in a decade. No one expects a recession as sharply as the 16% drop that came with the financial crisis in 2008. Paul Hollingsworth, Chief Economist at BNP Paribas Markets 360 Europe, said the outlook was simply bleak. "The cost of borrowing has increased significantly in recent quarters, confidence has plummeted, and consumers' real incomes are deteriorating. Put it all together and are likely prepared for further price drops," Hollingsworth said.

THE FAST FALL HAS HAPPENED FOR 4 MONTHS According to data compiled by Halifax, house prices in the UK have fallen for the third time in the last 4 months due to rising interest rates and the pessimistic economic outlook. In October, housing prices experienced the sharpest drop in almost the last 2 years. Prices decreased by 0.4 percent compared to the previous month. The annual increase in housing prices also decreased from 9.8 percent in September to 8.3 percent. "The combination of rising living costs combined with tightening mortgage availability is expected to continue to put pressure on the housing market," said Kim Kinnaird, director of Halifax Mortgages. Data released by the Nationwide Society last week also showed that prices fell 0.9 percent in October.

PRICES WILL CONTINUE TO DECREASE

Last month, the London-based The Economist magazine also covered the decline in housing prices. In the analysis of the magazine, it was stated that house prices have risen steadily for many years and even reached record levels with the pandemic .

HARD FALL OF 7 YEARS IN CHINA New house prices in China experienced the biggest drop in the last 7 years in September. In September, home prices for sale in the country's four largest cities, including Beijing, Shanghai, Guangzhou and Shenzhen, decreased by 0.1 percent compared to the previous month, according to data released by China's National Statistics Administration. In September, house prices for sale in 30 major cities, including Xiamen, Wuxi, Hangzhou and Nanjing, decreased by 0.2 percent compared to the previous month. House prices for sale in 36 joint-scale cities, including Sanya, Xianyang and Yueyang, decreased by 0.4 percent compared to the previous month.

DECREASE 25 PERCENT IN TURKEY On the other hand, with the research dated November 17, it was announced that the housing prices in Turkey decreased by 25 percent. The decline in house sales that started in July continues. In October, sales across the country decreased by 25.3 percent compared to the same month of the previous year and became 102 thousand 660, thus the lowest October sales of the last 8 years. According to the September housing price index data announced by the CBRT, the record price increase was renewed. While the housing price increased by 189.2 percent annually throughout the country, the average square meter sales price increased to 15 thousand 863 liras. While the housing price in Istanbul increased by 212.1 percent, the average square meter price increased to 25 thousand 714 liras. In İzmir, the average square meter price increased by 185.8 percent, and the average square meter price was 18 thousand 761 liras, while the average square meter price in Ankara increased by 196 percent was 11 thousand 323 liras.

5 REASONS TO DECLINE IN HOUSING SALES 1- With the increase in housing prices, the buyer group shrank. 2- The volatility in the exchange rate and the search for safe investments had a positive impact on sales in the first half of the year. Those with high purchasing power completed their transactions in this period. 3- Limitation on housing loan rates played an important role in the decline. In particular, the decrease in loan rates for second-hand housing and the lack of positive feedback on loan demands forced the consumer. 4- Those who participated in the social housing lot postponed their purchasing decision to try their luck in this field. 5- When it was announced that there would be a campaign for the middle and upper-middle income groups, the opinion of 'let's see the campaign first' prevailed.