Turkish mortgage law could boost domestic housing demand
A new mortgage law has been adopted in Turkey that will transform the borrowing power of the domestic market and could boost the country's growing property market even further.
In the past, Turkish people have had to rely on family investment or short-term, fixed-rate bank loans to help cover the costs of property. But a new law passed by the country's parliament last week means potential homeowners will be able to take out long-term fixed or variable rate mortgages.
As well as offering borrowers more choice in the financing of property investment, the law is also expected to lead to a drop in interest rates thanks to the emergence of secondary markets, the Anatolia news agency reports.
Those factors are positive news for the real estate sector, and the increased liquidity available to borrowers could drive housing demand and push up prices.
Currently, only 3% of Turkey's housing construction is financed by mortgage credit, the Financial Times reports, but the new law could transform the housing market in the long term.
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