Expectations of an interest rate cut were in vain: High interest rates are delaying home dreams.

The Central Bank's (CBRT) postponement of the anticipated interest rate cut has put a damper on many citizens' dreams of home ownership. Home ownership in Turkey is steadily declining due to high interest rates and low incomes. According to TurkStat data, the home ownership rate has fallen to 56.1 percent, while homebuyers continue to anticipate a decline in interest rates.

Experts say the Central Bank will follow a cautious path in reducing interest rates.

It was anticipated that mortgage interest rates would decline in the second half of the year, potentially revitalizing the construction sector. However, this expectation was not realized. The economic repercussions of the arrests of Ekrem İmamoğlu and many other mayors in March led not to a rate cut, but rather to an increase.

In April, the Central Bank was forced to raise interest rates again from 42.5 percent to 46 percent. According to a report by Yurdagül Uygun in Nefes newspaper, the Central Bank, which had postponed interest rate cuts until July, began cutting them again in July. The subsequent reduction to 43 percent in July revived hopes. While a recovery was anticipated, the new process that began with the dismissal of the CHP Istanbul provincial administration at the beginning of this month and the higher-than-expected August inflation figures have led to a downward revision of interest rate cut forecasts. Experts indicate that the Central Bank will pursue a cautious approach in reducing interest rates.

Housing sales remained limited

It's being reported that citizens will only see lower interest rates in the second half of next year. According to Central Bank data, the average annual mortgage interest rate is still 39.56%. Someone seeking a mortgage today is forced to pay nearly three times the interest they would have used in 10 years. This, in turn, limits housing sales.

Interest is 3 times the amount of the loan used

Someone taking out a 10-year 2 million lira mortgage has an annual cost of 46.4 percent. With 3.19 percent interest, the monthly installment would be 65,308 lira. Thus, the total repayment for the 2 million lira over 10 years would be 7,836,964 lira, while the total interest would reach 5,836,964 lira. In other words, a person looking to take out a mortgage would have to pay approximately three times the interest rate of the loan. This situation discourages people from buying a home.