Turkey to complete 64,000 affordable new homes this year worth $2.5bn

Turkey’s government-backed housing agency Toki will build a record number of residential units worth US$2.5 billion by the end of this year, its president said.

Toki will complete construction of 64,000 units this year, equal to 10 per cent of residential units built in Turkey annually, Ergun Turan said at his office in Ankara.

Almost all of this year’s portfolio consists of housing for middle and lower-income groups, according to Mr Turan. Building cheaper housing is core business for Toki, which was founded more than three decades ago but became a real driver of the Turkish economy after the ruling AK Party came to power in 2002.

Mr Turan’s comments on the value of Toki’s activities provide a glimpse into its finances before the top state auditing body Sayistay produces an annual report on the agency. While the agency’s role in Turkey’s high-paced growth years is often praised by the government, political opponents have criticised its oversight of spending.

Toki owns nearly half of the country’s biggest developer, Emlak Konut, and together they led a campaign to boost sales after a failed coup attempt in July hurt domestic economic activity. Lower down-payments and better mortgage rates encouraged homebuying worth about 3 billion Turkish lira (Dh3.67bn) in a month, Mr Turan said.

Toki collected 425 million lira thanks to a programme that allows Toki customers to save 20 per cent if they repay all of their outstanding debt to the agency, Mr Turan said. The total debt repaid as part of the campaign that lasts until the end of September is expected to be between 800m and 1bn liras, he said.

The agency will build 70,000 residential units to take a lead role in government plans to rebuild south-eastern cities including those damaged by last year’s urban fighting against Kurdish separatists. It will also build projects for the central bank, the banking regulator BDDK and the capital markets board SPK in Istanbul, with completion projected by early 2019, Mr Turan said.

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