The Engine Of The Turkish Economy Is In Serious, Serious Trouble

Once seen as a magnet for domestic and foreign demands, Turkey's housing market is showing rapidly worsening conditions, leading to experts predicting that its collapse is near.

Figures of the Turkish Central Bank point in that direction, as concerns over a contagious bubble burst grow. ''Price growth of an annual 9.6 percent in lira terms, excluding inflation of 11.2 percent that month, was the lowest since 2013,'' it said.

At the centre of the decline is Istanbul. Many newly built properties in the city’s outlying neighbourhoods remain unsold, creating a glut in the market. And bargains can be had for foreigners wishing to pick up properties in the country’s holiday resorts, as developers struggle to find local buyers.

Turkish construction companies have been purchasing large swaths of land, in particular around the northern edges of the city, where a huge airport is being built, near the Black Sea coast. But the sharp fall of the lira and escalating political tension have had an enormous negative impact lately.

The picture for most of the country becomes even more bleak when taking account of losses for the lira, which amounted to 19 percent in the 12 months to September. A home in Istanbul valued at 500,000 lira ($167,000) in September last year was worth 529,000 lira ($148,000) 12 months later.

''Troubles in Turkish industry, particularly the construction sector, could lead to serial bankruptcies unless the government restores confidence and companies gain better access to loans,''  say experts.

Here is an in-depth account of the developments.