Mortgage Banking - The New Hope

Housing problems in Turkey have been thriving as a result of overpopulation, migration from the rural side of the country to cities, and high rental rates when combined with unlicensed settlements. Turkey has been struggling with unplanned urbanization in addition to the need for approximately 300,000 new residences each year. However, business in general is expected to expand in an environment with the decrease of inflation and interest rates, the support of the recent economic developments, the housing financing by banks and the mortgage banking system.

Statistics show that although the total volume of housing financing provided by banks in Turkey increased by 300% through 2002 to 2004, only 3% of the housing financing is obtained from banks in Turkey. While the size of the American housing financing market is around 53% of the GNP, 40% in Europe and 5-15% in developing countries, the ratio still remains close to 0% in Turkey.