Danger Signs in the World's Top Housing Market
- Builders' borrowing, loan defaults on the increase in Turkey
- Developers provide buyers inducements to keep sales strong
Construction cranes operate around a building project as part of the Venedik Saraylari residential and business area beside the Trans Europe Motorway (TEM) in Istanbul, Turkey, on Wednesday, Aug. 6, 2014. A victory for Turkish Prime Minister Recep Tayyip Erdogan as the first directly elected president in Turkey's history on Aug. 10 would allow him to control the National Security Council and decide on the use of military power while keeping a grip on the government run by his party.
Photographer: Kerem Uzel/BloombergAt first glance, the world’s best-performing housing market bears few of the usual hallmarks of a bubble about to pop.
Reliance on mortgages is low, and Turkish homeowners reliably repay their loans, helped by house prices that rose faster than in any other country last year. The risk, at a time when construction has grown to make up a bigger share of the country’s investments than in China, is with the builders rather than the buyers.