Turkish tycoon warns developers about the «mania of low-cost housing»

09.02.2011 17:49
Turkish billionaire Ali Agaoglu supported moves to curb loan growth in 2011. He warned the public about the "mania of cheap housing," saying that prices of essential commodities may rise.

With regard to the recent decision of the Agency Banking Regulation and Supervision (BRSA) to limit the mortgage loans, 75 percent of the home's value, then people, according to Agaoglu, "must take more responsibility" when buying a home.

A? Ao? Lu Group, headed by Agaoglu - one of the largest companies in the construction industry, as well as tourism and hospitality industries. Scheduled for 2011, doubling the company's revenues up to 2 billion Turkish liras is consistent with the policy of restraint of credit expansion. "The brakes have a positive impact on the healthy growth of the market" - said Agaoglu reporters Jan. 15 at the ski resort of Uludag.

"It must be remembered that the Turkish people attached great importance to buying a home. A? Ao? Lu Group helped obtain more than 10 thousand credits for housing construction. Of these, only a small fraction of expired, whereas in the West these are about 2% of mortgage loans. "

Responding to questions H? Rriyet Daily News & Economic Review, Agaoglu, who founded his construction company in 1981, said that in Turkey there is no "real estate bubble, but it is worth to monitor the companies selling cheap homes.

"They have great sales - said the businessman. - But, meanwhile, iron prices rose to 1,400 liras per ton, while a few months ago tonne sold for 800 lire. Cement prices have increased by 30% during the same period. Due to the increasing cost me watching these companies, because they may not be able to sell the property at prices that were promised. " Such developments can destroy people with low incomes.

However, Agaoglu does not believe in the emergence of a bubble in real estate. "Turkey needs a new, quality accommodation, - he said .- If we're going to correct the situation with housing only in Istanbul, we must build more than 300 thousand houses per year for two decades. But today all over the country to build fewer than 400 thousand houses per year. "

The sum of all mortgage loans amounted to 55 billion Turkish liras - is 4% of GDP in Turkey. "In western countries this ratio exceeds 80% - said Agaoglu. - No non-performing loans, there are no problems in the credit market, no fuss in the industry. Where is the bubble? I'll tell you: he is in the minds of some economists. "

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Content tags: Overseas property Housing
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