Construction in Turkey – Key Trends and Opportunities to 2019

Date: 2015-12

“• According to CBRT, residential housing prices remained buoyant in the first eight months of 2015. The country’s average housing price index (HPI) grew by 14.5% from 2013 to 2014. This was preceded by annual growth of 12.7%, 11.7% and 10.2% in 2013, 2012 and 2011 respectively. The largest increase in house prices was recorded in Istanbul, the largest city in Turkey, where the average HPI grew by 22.3%, in 2013 to 2014, while house prices in Izmir and Ankara rose by 13.2% and 11.2% respectively. Prices are expected to remain buoyant over the forecast period, backed by an increase in demand due to the growing number of overseas property buyers, mainly from the Middle East and Russia. According to TurkStats, the total number of international property buyers in the country increased by 41.0% in 2014, as compared to 2013.

• Under the social housing program, to meet the rising housing demand coming from the country’s lower- and middle-income groups, the Toplu Konut İdaresi Başkanlığı (TOKİ), Turkey’s housing development administration, is developing affordable housing projects across the country. In a bid to ensure housing for all residents by 2023, the TOKİ plans to build 1.0 million homes with a coordination of the Ministry of Family and Social Policies-General Directorate of Social Benefits (SYGM) by 2023. Accordingly, various affordable housing projects were launched under the urban regeneration and slum transformation projects and social housing projects. The TOKİ plans to develop affordable housing projects in highly populated cities such as Ankara, Istanbul, Bursa, İzmir, Erzincan, Denizli, Erzurum, Trabzon and Gaziantep. In January 2015, under the slum transformation project, the government issued a tender for the transformation of 104,896 houses in the country. Consequently, various affordable housing projects will support the growth of the residential construction market over the forecast period.

• As robust and modern transport infrastructure is vital for the growth and competitiveness of an economy, the government is focusing more on infrastructure development. Accordingly, TRY226.4 billion (US$100.0 billion) is planned to be spent under the Vision 2023 to develop the country’s roads, highways, rail and airport infrastructure. The government plans to achieve these objectives through the PPP model as it lacks financial resources. Some of the major projects being developed through the PPP model include: the Marmaray project; Zafer airport in Kutahya; and the Gebze-Orhangazi-Izmir motorway. Efforts to develop the country’s transport network will support the growth of the infrastructure construction market over the forecast period.

• Rapid urbanization and the growing working population have elevated the demand for a fast and convenient transport system. Consequently, the government is investing heavily in the expansion of the country’s rail network and high-speed railways. Accordingly, to improve the country’s rail infrastructure and make it more effective for transport and logistics, the government plans to increase the length of the rail network from 12,000km in 2014 to 26,000km in 2025. Furthermore, the government also plans to connect major cities of Turkey through high-speed rail networks by 2023. Accordingly, the length of high- speed rail lines is expected to increase from 888km in 2014 to 10,000km in 2023. Ongoing high-speed rail projects include the Istanbul–Ankara, Ankara–Sivas, Bursa–Osmaneli and Sivas-Erzincan high-speed train projects. This will spur growth in transport infrastructure over the forecast period.

• The government plans to build 35 health campuses and city hospitals across the country to increase access to quality and affordable healthcare. The government aims to achieve this target through the build-lease-transfer model. This will further add 40,000–50,000 beds to the Turkish hospital network. The Ministry of Health also plans to build Free Health Zones in major cities such as Istanbul and Ankara, which includes hospitals, thermal tourism facilities, nursing homes, rehabilitation centers, health techno-cities and research and development (R&D) centers.”

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