Turkish President Recep Tayyip Erdoğan on Tuesday announced a $50 billion home-ownership plan, which will create 500,000 new homes and 50,000 offices in the country, Medyascope TV reported.
The programme will see the construction of 500,000 homes and sale of 250,000 land plots to qualifying applicants by Turkey’s Public Housing Development Administration (TOKİ), with the government extending repayment period to 20 years to keep monthly payments at as low as 2,800 liras ($125).
The housing plan arrives as Erdoğan is seeing a decline in support as Turkey counts down to the parliamentary and presidential elections scheduled for 2023 against the backdrop of an ailing economy marked by runaway inflation that has caused a spike in housing prices and rents.
Prices and rents in Turkey’s largest cities like Istanbul have doubled in less than a year, while salary increases in the country, where monthly minimum wage is around $300, have dragged far behind.
The project is set to be implemented over the next five years, Erdoğan said.
“We plan on completing 250,000 houses in two years,” he said, adding that 50,000 would be in Istanbul, 18,000 in Ankara, 12,500 in Izmir, among other cities.
Interest rate cuts by the central bank, ordered by Erdoğan, mean mortgage costs, net of inflation, are deeply negative in Turkey, adding to demand for property.
Erdoğan has long maintained that cheaper borrowing costs can slow inflation instead of pushing it higher and has sought to turbocharge growth by focusing on exports and employment as part of his “new economic model.”
After two decades in power, Erdoğan is seeing lower and lower poll numbers, with his approval ratings at a record low.